Updated from 10:48 a.m. ET, Thursday, July 20.
Stocks fluctuated on Thursday, July 20, as the materials sector slumped and consumer names led.
The S&P 500 added 0.05%, the Dow Jones Industrial Average was down 0.07%, and the Nasdaq gained 0.03%.
Materials stocks were the largest losers Thursday with a disappointing quarterly performance from Sherwin-Williams Co. (SHW) leading the sector lower. The paint and coating company earned an adjusted $3.80 a share over the quarter, far less than an anticipated $4.56. The company also offered third-quarter earnings guidance of $3.70 to $4.10 a share, which includes a $1.10 a share charge tied to its acquisition of Valspar. Guidance was below consensus of $4.96.
Other materials stocks that were lower include BHP Billiton PLC (BHP) , Dow Chemical Co. (DOW) , Rio Tinto PLC (RIO) , and Vale SA (VALE) . The Materials Select Sector SPDR ETF (XLB) was down by 0.8%.
Unilever PLC (UL) posted solid earnings for the first six months of the year and said it sees margin improvement and accelerating growth into the second half of 2017. Unilever said earnings per share rose 14.4% from the same period last year to €1.13 for the six months ended in June, well ahead of the FactSet consensus of €0.84 a share. Sales for the period rose 5.5% to €27.7 billion ($31.9 billion). Underlying sales growth for the second quarter rose 3%, the company said, to €14.4 billion, just shy of the company-supplied consensus of 3.2%.
Unilever gains led stocks in the non-cyclical consumer goods sector higher. Other names on the rise included Procter & Gamble Co. (PG) , Anheuser Busch InBev NV (BUD) , PepsiCo Inc. (PEP) , British American Tobacco PLC (BTI) and Reynolds American Inc. (RAI) .
Sears Holdings Corp. (SHLD) rocketed 15.4% higher after sealing a deal to sell Kenmore appliances through Amazon.com Inc. (AMZN) . This marks the largest distribution network for Kenmore products outside of Sears stores. Sears' deal with Amazon sent home-improvement stocks lower. Dow component Home Depot Inc. (HD) dropped 4.4%, while Lowe's Cos. (LOW) fell nearly 5.5%. Both home-improvement retailers sell appliances.
Qualcomm Inc. (QCOM) was also weighing on markets after the chip giant issued a downbeat forecast for its fiscal fourth quarter, largely because of its ongoing legal dispute with Apple Inc. (AAPL) . For the fourth quarter, Qualcomm said it expects to report sales of between $5.4 billion and $6.2 billion, compared to Wall Street's projected $5.5 billion. Qualcomm forecast GAAP earnings of between 55 cents and 65 cents a share.
Qualcomm's licensing business continues to be impacted by its legal battle with Apple. The QTL licensing segment saw its sales fall quarter over quarter to $1.17 billion, which was below analysts' estimates of $1.47 billion.
Qualcomm has been ensnared in a legal dispute with Apple since January, when the tech giant sued the chipmaker for $1 billion, claiming that it collected royalties for technologies it wasn't involved with, including Touch ID and cameras. Apple has said it will withhold future royalty payments until the dispute is resolved, forcing Qualcomm to slash its revenue forecast for the third quarter.
The company said its guidance assumes no royalty payments on 3G/4G device sales from either Apple or another unnamed major licensee it is at odds with.
In positive earnings Thursday, T-Mobile U.S. Inc. (TMUS) reported a jump in quarterly earnings. Second-quarter profit surged to 67 cents a share from 25 cents a year earlier and came in far higher than consensus of 38 cents. Revenue of $10.21 billion flew past estimates of $9.81 billion. The telecom added 1.3 million customers over the three-month period. T-Mobile said the subscriber additions in the quarter marked the 17th consecutive quarter it added more than 1 million customers.
American Express Co. (AXP) beat earnings and sales estimates over its second quarter. The credit card company earned $1.47 a share over its recent quarter, lower than $2.10 a year earlier but above estimates of $1.43. Revenue rose by 1% to $8.3 billion and exceeded forecasts of $8.19 billion.
Union Pacific Corp. (UNP) fell 2% despite reporting a better-than-expected quarter. The railroad company earned $1.45 a share over its recent quarter, 6 cents higher than estimates. Revenue increased just over 10% to $5.25 billion, beating consensus by $60 million.
Other earnings of note include Alcoa Corp. (AA) , Kinder Morgan (KMI) , Steel Dynamics (STLD) , United Rentals (URI) , Travelers Cos. (TRV) , Snap-On Inc. (SNA) , Sherwin-Williams (SHW) , Phillip Morris (PM) , KeyCorp (KEY) , Dover Corp. (DOV) , Blackstone (BX) , BB&T Corp. (BBT) , Bank of New York-Mellon (BK) , and Abbott Labs (ABT) .
Another day of gains for Wall Street pushed the S&P 500, Nasdaq and Dow to new records on Wednesday, July 19. The S&P 500 added 0.53% to a record close of 2,473, and the Nasdaq increased 0.64% to 6,385. The Dow was up 0.3% to a new record of 21,640.
Even with recent highs, trading on Wall Street has been relatively muted with investors more in wait-and-see mode than a bullish mindset, said Robert Pavlik, chief market strategist at Boston Private, in a note.
"Strange as it may sound the action in the market feels as though we're nowhere near an all-time high," said Pavlik. "Overall volume is down and most investors apparently are acting as though they're more cautious than anything else... I believe the quietness of the market is a reflection of investor's concerns with the lack of progress coming out of D.C. on everything from healthcare to taxes."
The European Central Bank opted to leave interest rates unchanged at its Thursday meeting, meeting economists' expectations. The central bank also repeated that it would continue to buy 60 billion euros in government bonds through to December or longer "if necessary."
ECB President Mario Draghi was vague on when the central bank could change its quantitative-easing plans. At a press conference following the meeting, Draghi said the ECB has to "look at the path of inflation" to ascertain whether it is moving toward the central bank's target. Draghi also said the ECB would discuss changes to monetary policy in "autumn."
"This is a well-choreographed attempt by Mr. Draghi to make sure that financial markets don't get ahead of themselves after his more hawkish comments of late," said Aberdeen Asset Management senior investment manager Patrick O'Donnell. "We probably won't hear anything significant out of the ECB until September, which is plenty of time for investors to digest Mr Draghi's caveat laden hawkishness."
Jobless claims saw a large drop in mid-July, according to the latest reading from the Labor Department. The number of new claims for unemployment benefits in the U.S. fell by 15,000 to 233,000 in the past week. The less volatile, four-week claims average declined by 2,250 to 243,750.
Business conditions in the Philadelphia weakened more than expected in July. The Philadelphia Fed Business Outlook fell to 19.5 in July, far weaker than an expected reading of 24. The index sat at 27.6 in June.
BP PLC (BP) was slightly higher on reports that it had approached potential buyers for its oil and gas production assets in the North Sea. The talks include the full range of BP's currently producing assets in the North Sea, where the company is a top producer, according to The Wall Street Journal. Potential buyers include private equity firms.
Eat, Drink and Talk Money with Jim Cramer
Meet Jim Cramer at an exclusive reception at his Bar San Miguel in Brooklyn, N.Y., on Tuesday, July 25, from 6:30 p.m. To 9 p.m.
The evening will start with a screening of Jim's CNBC show Mad Money. Afterwards, Jim will join the party fresh off of the CNBC set to mingle, take photos and answer your investing questions.
Tickets include dinner, drinks and an autographed copy of Jim's book Get Rich Carefully.
Click here for more information or to buy tickets.
Where: Bar San Miguel, 307 Smith St., Brooklyn, N.Y.
When: Tuesday, July 25, 6:30 p.m. to 9 p.m.