By Mark DeCambre, MarketWatch , Sunny Oh
A quartet of Dow components reported quarterly results on
Tuesday, including McDonald's, P&G, United Tech and
Travelers
U.S. stocks were mixed Tuesday as consumer spending stocks
pulled the Nasdaq lower amid a torrent of corporate earnings
reports that included McDonald's and Travelers Cos. posting
weaker-than-expected earnings.
How are major indexes performing?
The S&P 500 index was up 5 points, or 0.2%, to 3,012. The
Nasdaq Composite Index shed 10 points, or 0.1%, to 8,152. The Dow
Jones Industrial Average gained 90 points, or 0.3%, to 26,917,
despite worse-than-expected third-quarter results from McDonald's
and Traveler Cos
(http://www.marketwatch.com/story/dow-components-mcdonalds-and-travelers-disappoint-on-earnings-offsetting-pg-and-united-techs-gains-2019-10-22).
On Monday, the Dow ended the day 57.44 points, or 0.2%, higher
at 26,827.64, weighed by a decline in shares of Boeing Co.'s stock
(BA), following a report on Friday that said the company may have
misled federal aviation authorities
(http://www.marketwatch.com/story/boeing-stock-at-its-lowest-in-two-months-after-report-jet-maker-may-have-misled-faa-2019-10-18)
about the safety of the 737 Max jet.
The S&P 500 index rose 20.52 points, or 0.7%, to end at
3,006.72, leaving it 0.6% away from its record closing high of
3,025.86 set on July 26. The Nasdaq Composite Index climbed 73.44
points, or 0.9%, to finish at 8,162.99, about 2% from its July
peak.
What's driving the market?
Investors were keeping a close eye on Tuesday's deluge of
corporate results, including nearly one-fourth of the S&P 500
index components this week and four Dow components that reported
early Tuesday.
For the third quarter, S&P 500 index companies are likely to
report a year-over-year decline in earnings of 4.7%, but
year-over-year growth in revenues of 2.6%, with a possible net
profit margin of 11.3%, which would be the first time index
companies have reported three straight quarters of year-over-year
declines in net profit margin since Q1 2009 through Q3 2009,
FactSet analyst John Butters said.
Against the backdrop of slowing economic growth, analysts have
cut projections for 2020 earnings for S&P 500 corporations by
0.5%, according to Bloomberg News, citing its proprietary data
provider
(https://www.bloomberg.com/news/articles/2019-10-21/knife-hits-2020-profit-estimate-in-replay-of-pre-plunge-revision),
despite results that have mostly come in better than expected so
far in the third-quarter.
But "so far, earnings season has been much better than most
initially feared, as the banks painted a healthy picture of the
U.S. consumer," wrote Edward Moya, senior market analyst at
brokerage Oanda, in a Tuesday note. "This week, we will see how
consumer staples and discretionary companies soften their
outlooks."
In economic data, investors received an update on the health of
the U.S. housing market with existing-home sales for September
falling by 2.2%
(http://www.marketwatch.com/story/existing-home-sales-dip-22-in-september-as-buyers-face-limited-inventory-2019-10-22)
to an annualized pace of 5.38 million.
On the international trade front, President Donald Trump said
Monday that talks between Washington and Beijing are going "very
well
(http://www.marketwatch.com/story/trump-says-us-china-trade-deal-coming-along-very-well-2019-10-21)."
Top trade negotiator Robert Lighthizer also said that the U.S. aims
to finish the first phase of talks by mid-November when the two
countries meet in Chile.
Elsewhere, U.K. Prime Minister Boris Johnson was preparing to
see his Brexit plan put up for another vote, with lawmakers being
asked to approve the plan in principle, followed by a vote on the
government's schedule for debate and possible amendments.
Which stocks are in focus?
Tile Shop Holdings(TTS) shares plunged after the company said it
would voluntarily delist its shares from the Nasdaq. The cost of
home-improvement materials have soared as a result of the
U.S.-China trade war. Tile's shares were down almost 80%
year-to-date.
Procter & Gamble Co. shares (PG) were gaining after the
company delivered its third-quarter results and dialed up its
expectation for 2020 sales growth, up 3% to 5% from previous
guidance of 3% to 4% growth.
McDonald's Corp. stock (MCD) fell after earnings fell short of
Wall Street estimates.
Shares of Dow-component United Technologies Corp.(UTX) rose
after the company beat earnings' expectations, and raised its
earnings outlook for 2019.
Travelers Cos. stock (TRV) fell sharply
(http://www.marketwatch.com/story/travelers-stock-falls-after-earnings-miss-2019-10-22)
after the insurer saw earnings decline and fall short of
expectations.
United Parcel Service Inc. stock (UPS) slipped despite the
package-shipping company delivering third-quarter results that
outperformed analysts' consensus estimates.
Shares of Hasbro Inc. (HAS) sank Tuesday, after the toy maker
reported third-quarter profit and revenue that missed expectations,
as weakness in franchise brands and trade uncertainty offset
strength in partner brands.
Biogen Inc. shares (BIIB) were on track for their biggest gain
in 20 years Tuesday after the company filed for regulatory approval
for an Alzheimer drug called aducanumab
(http://www.marketwatch.com/story/biogens-stock-blasts-off-after-surprise-reversal-on-alzheimers-drug-earnings-beat-2019-10-22)
and the biotechnology company surprised investors by saying its
treatment was ready to start the regulatory approval process.
Under Armour Inc. (UAA)
(http://www.marketwatch.com/story/under-armour-names-patrik-frisk-ceo-succeeding-ceo-and-founder-kevin-plank-2019-10-22)(UAA)
stock rose after the sportswear brand announced CEO Kevin Plank was
stepping down
(http://www.marketwatch.com/story/under-armour-names-patrik-frisk-ceo-succeeding-ceo-and-founder-kevin-plank-2019-10-22)and
named Patrik Frisk its new chief effective as of Jan. 1, 2020.
JetBlue Airways Corp. (JBLU) said Tuesday it had a net income of
$187 million
(http://www.marketwatch.com/story/jetblue-shares-fall-premarket-as-earnings-beat-but-airline-offers-soft-guidance-2019-10-22),
or 63 cents a share, in the third quarter, up from $50 million, or
16 cents a share, in the year-earlier period.
Shares of Lockheed Martin Corp. (LMT) were slightly down after
the defense contractor reported third-quarter results, with sales
$15.17 billion, versus $14.32 billion a year ago, above the FactSet
consensus $14.87 billion.
How are other markets performing?
The 10-year Treasury note yield was nearly flat at 1.793% on
Tuesday.
West Texas Intermediate crude for November delivery was
(http://www.marketwatch.com/story/oil-prices-set-for-second-skid-in-a-row-as-investors-fret-about-crude-demand-2019-10-21)up
73 cents, or 1.4%, to trade at $54.04 a barrel on the New York
Mercantile Exchange.
Gold for December delivery on Comex fell $1.20, or 0.1%, at
$1,481.20 an ounce, after slipping 0.4% to settle at $1,488.10 an
ounce on Monday.
The ICE U.S. Dollar Index , which tracks the performance of the
greenback against six major rivals, rose about 0.06% to 97.39.
Global equities saw gains. The Stoxx Europe 600 rose 0.2%. In
Asia, China's CSI 300 index finished up 0.4% and the Shanghai
Composite Index gained 0.5%, while Hong Kong's Hang Seng Index
advanced 0.2%.
(END) Dow Jones Newswires
October 22, 2019 13:33 ET (17:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.