Stocks Mixed as Earnings Season Kicks Off

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U.S. equities moved lower on Friday as Wall Street banks kicked off the fourth-quarter earnings season by reporting results before the bell.

In the end, the Dow Jones Industrial Average lost a fraction, the S&P 500 gained 0.2%, the Nasdaq Composite wafted up 0.5% and the Russell 2000 gained 0.8%. Treasury bonds were weaker, the dollar fell for the third straight session, gold was weaker and oil fell to end a two-day rally down 1.2% despite a drop in U.S. drilling rig counts.

011317-Dow-JonesBank of America Corp (NYSE:BAC) gained 0.4% after reporting weaker-than-expected core earnings on soft net interest income and fees. Fixed income, currency and commodities trading was also light, but offset somewhat by lower expenses. JPMorgan Chase & Co. (NYSE:JPM) gained 0.5% on an earnings beat from lower taxes despite light net interest income. Wells Fargo & Co (NYSE:WFC) gained 1.5% despite missing expectations on lower free income and weak mortgage business.

Overall, financial stocks led the way with a 0.6% gain while REITs were the laggards, down 0.3%.

Pandora Media Inc (NYSE:P) gained 6.3% after announcing it expects fourth-quarter revenue and earnings to exceed guidance thanks to strong ad sales. GrubHub Inc (NYSE:GRUB) gained 4.5% on an upgrade to overweight by Morgan Stanley on accelerating restaurant adds. Monster Beverage Corporation (NASDAQ:MNST) gained 3.3% on positive management comments on Q4 sales. And Facebook Inc (NASDAQ:FB) gained 1.4% on an upgrade from Raymond James citing attractive valuation.

On the downside, GameStop Corp. (NYSE:GME) lost 8.1% after reporting a 18.7% drop in holiday comp-store sales citing aggressive console promotions at other retailers.

Retail sales came in at a weaker than expected 0.6% month-over-month growth in December, just below the 0.7% gain expected. Overall, sales were up 3.3% for 2016 vs. a 2.3% advance in 2015. Separately, the National Retail Federation said holiday shopping sales were up 4.3% from last year — ahead of the 3.6% expected. Online sales were up nearly 13%.

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Producer price inflation rose 0.3% in December following a 0.4% gain in November. That pushed the year-over-year rate to 1.6%, the highest since September. And finally, the University of Michigan consumer sentiment readers was largely unchanged from the cyclical peak hit in December.

Overall, the Dow failed once again to take the 20,000 threshold — despite five weeks of trying — as technical indicators continue to flash overbought warnings signals amid narrowing breadth. I continue to recommend defensive positions such as the Jan $11 puts against the U.S. Oil Fund (NYSEARCA:USO) to Edge Pro subscribers.

Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/stock-market-today-nyse-dow-jones-industrial-average-investing-news-17/.

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