Stocks Hold Gains Despite Disappointing Earnings

Stocks hold gains Friday afternoon as investors overlook a series of disappointing earnings.
By Keris Alison Lahiff ,

Stocks held gains Friday afternoon as investors overlooked a series of disappointing earnings.

The S&P 500 was up 0.38%, the Dow Jones Industrial Average rose 0.2%, and the Nasdaq added 0.52%.

Wall Street capped off Friday with another flood of earnings releases in a week jam-packed with them. The earnings season is nearly a quarter of the way through. Many analysts expect the second quarter to act as a bottom following quarter after quarter of receding earnings, the worst streak since the financial crisis.

Starbucks (SBUX) - Get Report   traded slightly higher Friday despite missing sales estimates in its recent quarter on slowing growth in the domestic market. The coffee chain reported revenue of $5.24 billion, $100 million lower than estimated. Guidance also failed to surpass estimates. Starbucks anticipates fourth-quarter profit between 54 cents and 55 cents a share, while analysts expected 55 cents.

Starbucks is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells SBUX? Learn more now.

Pandora (P)  added 4%, shaking off an unexpected dip in the number of listeners over its recent quarter. The music-streaming site reported 78.1 million active listeners by the end of the quarter, down from 79.4 million a year earlier. Total listener hours rose 7%. Analysts had expected the number of active listeners to increase to 80.3 million.

Chipotle (CMG) - Get Report was up 5% despite the fallout from a months-long health scare that continued to affect its bottom line. The burrito chain earned 87 cents a share, a sharp decline from $4.45 a share in the year-ago quarter. Analysts expected earnings of 91 cents. Same-restaurant sales slumped 23.6%.

AT&T (T) - Get Report climbed 1.5% despite reporting a mixed quarter with in-line earnings and disappointing revenue. The telecom giant earned an adjusted 72 cents a share in its June quarter, as expected, while sales of $40.52 billion missed forecasts of $40.61 billion.

General Electric (GE) - Get Report posted adjusted earnings of 51 cents a share in the second quarter, topping analysts' forecasts of 46 cents. Revenue rose 15% to $33.5 billion. Analysts expected revenue of $31.9 billion. Shares fell 2% in trading Friday.

General Electric is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GE? Learn more now.

Honeywell fell 3.3% Friday after saying it earned $1.66 a share in the second quarter, beating forecasts by 2 cents. The company said it was raising the low-end of its full-year earnings guidance range to $6.60 to $6.70 a share.

PayPal (PYPL) - Get Report announced a partnership agreement with Visa (V) - Get Report , wherein a greater number of stores will be able to accept payment through the online company. PayPal also beat analysts' estimates after reporting its second-quarter results.

"The new agreement will allow PayPal to gain access to Visa tokenization services, beginning in the United States," wrote Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio, and research manager Jack Mohr. Action Alerts PLUS owns shares of both PayPal and Visa in its portfolio.

The Dow snapped a seven-day streak of record closes on Thursday on a mix of earnings from the likes of Southwest (LUV) - Get Report and Intel (INTC) - Get Report . The S&P 500 and Nasdaq also closed lower.

Crude oil prices declined on Friday after an increase in the number of active oil rigs drilling for crude in the U.S. The number of active rigs increased by 14 to 371, according to Baker Hughes data. Surging global production and building inventories have pressured crude recently. 

West Texas Intermediate crude oil was down 3.8% for the session, closing at $44.19 a barrel on Friday. Crude was down 3.8% for the week. 

German police were on the hunt for shooters tied to a Munich mall shooting on Friday afternoon. Reports indicated several people were dead or injured after the attack, though police have yet to confirm numbers. 

Boeing weighed heavily on the Dow after warning of a $2 billion second-quarter charge tied to its 787, 747 and KC-46 aircraft. The aerospace company has suffered weaker demand for its large planes, an industry-wide problem that has also hurt peers such as Honeywell (HON) - Get Report and Airbus. The write-offs will be detailed further when it releases second-quarter earnings on Wednesday. Shares were down 2%.

A flash reading on manufacturing activity in July rose, a sign the headwinds of a stronger U.S. dollar and weaker demand were beginning to ease. The U.S. Markit flash PMI increased to 52.9 from 51.3.

Fox News CEO Roger Ailes has resigned from his post, effective immediately, after a string of sexual harassment allegations led by former anchor Gretchen Carlson. Rupert Murdoch, executive chairman of parent company 21st Century Fox (FOXA) - Get Report , will assume the position as acting CEO.

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