Broadgate: Market News 31/7
31 July 2013
The S&P 500 and Nasdaq ended higher on Tuesday, lifted by gains in the technology sector, while potash shares were the day’s big losers.
The tech sector index rose 0.7 percent, leading the S&P 500’s advance. Facebook’s stock jumped 6.2 percent to close at $37.63, within striking distance of its $38 IPO price. The stock – the most actively traded on Nasdaq – rose as much as 7 percent to a session high of $37.96. Facebook’s stock has gained 42 percent since the company reported blowout quarterly results last Wednesday.
Pfizer, a Dow component, gained 0.4 percent to $29.67 after the largest U.S. drugmaker reported earnings that slightly exceeded expectations. Cost controls helped Pfizer’s bottom line. The company also has lined up a business split that could lead to the spinoff of its generics division.
At the same time, Mosaic Co’s stock was among the biggest drags on the S&P 500, sinking 17.3 percent to $43.81 after Russia’s Uralkali dismantled one of the world’s largest potash partnerships by pulling out of a venture with its partner in Belarus, a move it expects will drive global prices down 25 percent.
The shakeup in the potash sector pushed shares of Intrepid Potash down 28.6 percent to $13.89. U.S-traded shares of Potash Corp slid 16.5 percent to $31.63 and Agrium fell 5.4 percent to $86.50.
Investors also were cautious ahead of the Wednesday statement from the Federal Reserve, which is expected at the end of a two-day policy meeting of the Federal Open Market Committee. Investors will scrutinize the statement for any additional hints of when the central bank may begin to pare its $85 billion a month in bond purchases.
“I think the markets are hoping (Fed Chairman Ben) Bernanke doesn’t rock the boat with comments that are different than he’s given over the last month or so,” said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
The Dow Jones industrial average dipped 1.38 points, or 0.01 percent, to end at 15,520.59. The Standard & Poor’s 500 Indexeked out a gain of just 0.63 of a point, or 0.04 percent, to finish at 1,685.96. The Nasdaq Composite Index rose 17.33 points, or 0.48 percent, to 3,616.47.
Shares of Verizon Communications, down 2.1 percent at $50.42, were the biggest drag on the Dow.
After the bell, shares of Symantec gained 4.5 percent to $25.45. The company, which makes Norton anti-virus software, posted better-than-expected quarterly results. An increase in hacking attacks led businesses to spend more on Symantec’s security and data storage products.
The day’s earnings news was mixed overall. Occidental Petroleum Corp shares fell 2.4 percent to $88.32 after the company reported a smaller-than-expected quarterly profit, hurt by lower oil prices in the Middle East and North Africa.
Coach Inc shares dropped 7.9 percent to $53.30 after the leather goods maker reported soft sales at its North American stores and disclosed the departures of two more executives amid a flurry of recent changes in top management.
In contrast, Goodyear Tire & Rubber’s stock stock rose 8.9 percent to $18.56 after setting a nearly five-year high of $19.60. The company reported that its quarterly profit more than doubled, citing lower raw material costs and stabilizing sales in Europe as major reasons for its jump in net income.
Mobile service provider Sprint Corp posted a wider quarterly loss on costs from shutting down its Nextel network, but revenue grew as customers spent more on wireless services. Sprint’s stock leaped 7.3 percent to $6.16.
More companies continued to beat earnings expectations compared with revenue forecasts. With results in from 60 percent of the S&P 500 companies, 67.4 percent have exceeded earnings expectations – in line with the average beat over the last four quarters. About 55 percent of companies have topped revenue expectations, more than the 48 percent of revenue beats in the past four earnings seasons but below the historical average, Thomson Reuters data showed.
Volume was roughly 5.89 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.4 billion this year.
Advancers were about even with decliners on the NYSE, with about 15 stocks rising for every 14 that fell. On the Nasdaq, about 13 stocks advanced for every 12 that declined.
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