Another busy day on the earnings calendar kept trading erratic again on Thursday, though the S&P 500 and Nasdaq managed to clinch slight gains by the end of the session.
The S&P 500 was up 0.16%, and the Nasdaq was rose 0.30%. The Dow Jones Industrial Average fell 0.02%,
The earnings season charged ahead with a rush of reports out overnight and Thursday morning that captured investors' attention. The second-quarter season is just over halfway done. Blended quarterly earnings are expected to decline 3% this quarter. So far, 72% of those companies which have reported have exceeded earnings estimates.
"Second-quarter earnings releases continue to support and drive equity prices while swaying investor sentiment, with results, on average, exceeding estimates," said Terry Sandven, chief equity strategist at U.S. Bank. "Clearly the remainder of second quarter earnings releases will be a driver of equity prices into mid-August."
Facebook (FB) - Get Report jumped after breezing past second-quarter estimates. Ad sales at Facebook rose 63% to $6.24 billion, accelerating from a 57% rise in the first quarter and fourth quarter. Around 84% of second-quarter ad revenue came from mobile. Facebook warned that ad growth will slow in the third and fourth quarter as it deals with tougher annual comparisons.
"Bottom line: Facebook has mastered how to advertise on mobile and social effectively and profitably while maintaining the incredible user experience," wrote TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust Portfolio, and research director Jack Mohr. (AAP holds Facebook in its portfolio). "The balance is key in this business in order to keep both users and advertisers happy. Facebook has put together a team that can cater to both sides of the spectrum. What a glorious time to be a Facebook shareholder, indeed."
Groupon (GRPN) - Get Report surged despite swinging to a quarterly loss. The coupon site reported a net loss of 10 cents a share, down from 16 cents a share in profit a year earlier. Revenue rose just over 2% to $756 million. Groupon raised its full-year sales forecast to $3 billion to $3.1 billion, up from a previous range of $2.75 billion to $3.05 billion.
Dow Chemical (DOW) - Get Report posted a slightly narrower drop in revenue than expected even as currency exchange continued to pressure the quarter. Revenue slid 7.4% to $11.95 billion, dragged on by lower raw material prices. Analysts had expected revenue of $11.24 billion. The company, which is currently working to have a deal with DuPont (DD) - Get Report approved, said it achieved its 15th straight quarter of earnings growth.
Ford (F) - Get Report was among Thursday's earnings disappointments. The automaker earned an adjusted 52 cents a share, 8 cents short of expectations. Sales rose to $39.49 billion compared with $36.2 billion consensus. Weak North American sales were countered by strength in Europe, the Asia Pacific, South America and Middle East and Africa.
Crude oil prices plumbed fresh three-month lows on Thursday, extending Wednesday's slide. Weekly data from the Energy Information Administration on Wednesday showed an increase in inventories, exacerbating worries over a supply glut.
West Texas Intermediate crude oil closed 1.9% lower at $41.14 a barrel on Thursday, its sixth straight day of declines.
"The combination of strong crude and product inventories will likely keep pressure on prices in the near-term, especially as peak driving season comes to a close and producers continue to add to the weekly rig count," said Joseph George, commodity analyst at Schneider Electric.
Boeing (BA) - Get Report could end production of its 747, the iconic jet it has produced for half a century. The aerospace manufacturer has delivered more than 1,500 units of the 747 since 1970. Boeing reported a quarterly loss Wednesday morning, its first in nearly seven years, as it faced weaker demand for larger aircraft. Shares were 2% lower, weighing heavily on the Dow.
Initial jobless claims in the U.S. for the week ended July 23 increased by 14,000 to 266,000, according to the Labor Department, remaining at historically low levels. The number of new claims for unemployment benefits has remained under 300,000 for 73 weeks in a row, its longest stretch since the 1970s.
The U.S. trade gap widened to $63.3 billion in June, the U.S. Census Bureau said on Thursday. The reading was wider than an expected increase to $61.1 billion from $60.6 billion in May. Exports declined 0.2%, while imports increased 1.6%.
The Federal Reserve opted to leave rates unchanged at its July meeting on Wednesday afternoon, as expected. The vote to hold rates as is was nearly unanimous, save for the sole vote from Kansas City Fed President Esther George who voted to raise rates. The likelihood of a move on interest rates in July was low heading into the meeting.
The Fed touted improvements to the economy in a statement following the conclusion of its two-day meeting. Increasing confidence in the economy was taken by some as a signal of the central bank's openness to a possible move on rates in September.