Wall Street ran at two speeds on Thursday with better-than-expected earnings from PayPal(PYPL) - Get Report driving the Nasdaq to new records, while a slump in crude oil kneecapped any big gains for the rest of the market.
The Nasdaq ended 0.39% higher at a new record close of 6,048. The tech-heavy index only crossed its 6,000 milestone on Tuesday. The S&P 500 was up 0.06%, the Dow Jones Industrial Average added 0.03%.
Nearly half of S&P 500 companies have reported results so far this earnings season. Of those that have reported, 75% have exceeded first-quarter earnings estimates, above the historical average of 64%. Companies have had generally weaker performances on the top-line with 64% topping consensus, beating out the historical average of 59% by a narrower margin.
Nasdaq component PayPal climbed 6% after surpassing quarterly targets and after its board authorized a $5 billion stock repurchase program. Adjusted profit of 44 cents a share exceeded consensus by 3 cents, while revenue of $2.98 billion topped estimates of $2.94 billion. Total payments volume grew 23% and neared a never-before-seen total of $100 billion. Its new share buyback program will go into effect once its current $2 billion plan has been exhausted.
Crude oil prices fell on Thursday, retreating further from the $50 mark after production in Libya began to return to full capacity. The country's Sharara and El Feel oilfields are operating once again after protests that blocked pipelines came to an end. Protests have been off and on since March. Separately, Organization of Petroleum Exporting Countries Secretary-General Mohammad Barkindo said on Thursday that global supplies were declining, though needed to continue to fall to address a glut.
West Texas Intermediate crude was down 1.3% to $48.97 a barrel on Thursday, its lowest settlement since March 28.
Energy stocks were the worst performers on Thursday. Exxon Mobil(XOM) - Get Report , Royal DutchShell (RDS.A) , Chevron(CVX) - Get Report , PetroChina(PTR) - Get Report , Total(TOT) - Get Report and BP(BP) - Get Report were lower, while the Energy Select Sector SPDR ETF (XLE) - Get Report fell 1.1%.
Also in earnings Thursday, Under Armour(UA) - Get Report reported a narrower loss than anticipated and better-than-expected revenue. The athletic wear company reported a loss of a penny a share compared to profit of 4 cents a year earlier. Analysts anticipated a loss of 4 cents a share. Sales of $1.12 billion edged past consensus of $1.11 billion.
Ford(F) - Get Report saw increased safety recall costs eat into profit over its first quarter. Net income declined by 35% to $1.6 billion. However, adjusted earnings of 39 cents a share beat estimates by 3 cents, while revenue rose by 4% to $39.1 billion.
Comcast(CMCSA) - Get Report climbed 2% after posting an increase in new video and high-speed internet customers and growth in its newer businesses, such as home automation. The company added 42,000 video customers over the quarter, slowing slightly from an addition of 53,000 in the same quarter a year earlier. The number of broadband customers rose by 429,000, while broadband revenue rose 10%. Quarterly net income of 53 cents a share came in a dime higher than a year earlier and better than analysts' estimates of 44 cents. Revenue increased 8.9% and topped expectations.
Bristol-Myers Squibb(BMY) - Get Report rose 3.5% on Thursday following a better-than-expected quarter. Net income increased to 94 cents a share from 71 cents a year earlier, while adjusted earnings of 84 cents a share topped consensus of 73 cents. Revenue of $4.93 billion came in higher than analysts' target of $4.75 billion.
Deutsche Bank(DB) - Get Report posted slightly better-than-expected first-quarter profit, although revenue slipped, as Germany's biggest lender attempts to put its litigation and capital raising risks behind it. Deutsche Bank said pretax profis for the first three months of the year were €878 million ($956.8 million), modestly ahead of the consensus forecast of €868 million but a significant swing from the €2.4 billion loss recorded over the same period last year. Revenue for the quarter grew 4.4% to €7.346 billion, the bank said, missing analysts' forecasts of €8.1 billion. Net income was €575 million, beating the €522 million estimate.
Amgen(AMGN) - Get Report fell 1.1% after a double-digit slump in sales of its rheumatoid arthritis drug Enbrel raised concerns over future performance. Enbrel sales declined by 15% as competition rose. Adjusted earnings did surpass estimates, though revenue fell short.
Buffalo Wild Wings (BWLD) fell short of earnings estimates, but reported in-line sales over its first quarter. Earnings of $1.44 a share came in 24 cents below estimates, while revenue climbed 5.2% to $534.76 million. The wings chain has recently been under pressure from activist investor Marcato Capital to shake up its management and board.
Pending home sales in the U.S. fell in March as tighter inventory in recent months constricted high demand. A measure from the National Association of Realtors dropped 0.8% to 111.4 in March, slightly steeper than an anticipated drop of 0.5%. Pending home sales measures sales where a contract has been signed but a deal not yet completed.
Stocks faltered on Wednesday after the White House revealed its highly anticipated tax plan this afternoon. A one-page release from the White House and a brief press conference didn't contain many surprises but raised many questions.
"There is still a lot unknown about the tax plan," said Matthew Peterson, chief wealth strategist at LPL Financial. "For example, we know the tax brackets, but not what income levels would trigger the rates. Cash held overseas being repatriated would be at a lower, but still unknown, level."
President Donald Trump's tax plan includes a reduction in the corporate tax rate to 15% from 35% and a top individual tax rate of 35% as widely expected. The plan reduces the number of individual tax brackets to three from seven. The plan also backs the repeal of the alternative minimum tax and the death tax. Trump called upon the simplification of the tax code on the campaign trail and over the past three months in office.
Congress continues to scramble to avoid a government shutdown this week by pushing through a continuing resolution. House Speaker Paul Ryan said on Thursday that he was confident Congress would pass a "short-term extension" to ensure the government avoids a shutdown. Negotiations likely will intensify on Friday ahead of the deadline at midnight, April 28.
The European Central Bank opted to leave rates unchanged at its meeting Thursday, as expected. In a statement, the central bank reaffirmed that it would keep rates at "present or lower levels" for a long period of time even as it tapers its quantitative easing. ECB President Mario Draghi said on Thursday that downside risks have "diminished," though stimulus was still needed.
Orders for long-lasting U.S. goods rose in March, though not at the pace analysts anticipated. Durable goods orders increased by 0.7% in March, according to the Census Bureau, falling short of consensus of 1.1% growth. Goods orders rose by an upwardly revised 2.1% in February. Core goods unexpectedly declined by 0.2%, well short of analysts' estimates for an increase of 0.4%.
Jobless claims rose in the past week, though held close to multi-year lows. The number of new claims for unemployment benefits rose by 14,000 to 257,000 in the past week. The less volatile, four-week average fell by 500 to 242,250.