Stocks were higher on Thursday, Oct. 26, as a handful of positive earnings reports kept the mood on Wall Street upbeat.
The Dow Jones Industrial Average was up 0.44%, recovering more than 100 points after a drop a day earlier. The S&P 500 climbed 0.2%.
The Nasdaq was a little more uncertain having spent the earlier part of the morning in the red before recovering to show a gain of 0.2%. Earnings caused those swings -- Buffalo Wild Wings Inc. (BWLD) was one of Nasdaq's best performers after a positive quarter and Charter Communications Inc. (CHTR) its worst after a big earnings whiff.
Twitter Inc. (TWTR) rose more than 15% after adding new subscribers and reaching "record profitability," according to a statement. The social media platform reported a loss of 3 cents a share, one-fifth of the loss a year earlier. Analysts expected a loss of 11 cents a share. Adjusted earnings of 10 cents a share came in 4 cents higher than expected. Revenue dipped 4% to $590 million. Daily average users increased 14% in the third quarter, up from 12% in the second quarter. However, Twitter did warn that it had been mis-counting its average users since 2014.
Ford Motor Co. (F) reported a better-than-expected third quarter. Net income of 39 cents a share rose from 24 cents a year earlier. Adjusted profit of 46 cents a share beat by 13 cents. Revenue of $36.5 billion exceeded estimates of $32.9 billion. The automaker also adjusted its full-year profit forecasts to $1.75 to $1.85 a share, a penny above estimates on the low end of that range.
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ConocoPhillips (COP) also exceeded profit and sales estimates over its recent third quarter. The oil company swung to net income of 34 cents a share over the quarter, up from a loss of 84 cents a year earlier. Adjusted earnings of 16 cents a share came in higher than estimates of 8 cents. ConocoPhillips also reiterated full-year production targets "despite impacts from Hurricane Harvey."
Amgen Inc. (AMGN) bested profit and revenue estimates over its third quarter, even as overall sales fell slightly. Adjusted earnings of $3.27 a share beat consensus by 16 cents. Revenue slipped 0.7% to $5.77 billion, edging past consensus by $10 million. The drugmaker also increased fiscal 2017 adjusted earnings guidance to $12.50 to $12.70 a share. CEO Robert Bradway said, "Disciplined expense management and ongoing process improvements" are driving long-term growth.
Shares of Buffalo Wild Wings jumped on Thursday after the restaurant chain posted third-quarter profit that topped expectations, benefiting from a shift to boneless chicken wings. The company reported earnings of $1.36 a share on revenue of $496.7 million. Analysts surveyed by FactSet expected the company to report earnings of 79 cents a on sales of $501.1 million.
Comcast Corp. (CMCSA) beat expectations for earnings in the third quarter, while subscriber losses deepened. The media company reported earnings of 52 cents a share for the three months ended in September, compared to earnings of 49 cents expected by analysts surveyed by FactSet.
Net income at the U.S.'s largest cable group rose 18.5% to $2.65 billion, while revenue fell 1.6% to $20.98 billion. FactSet analysts has been expecting Comcast's revenue to hit $21.06 billion for the quarter. In Comcast's biggest business, cable and internet, revenue was up 5.1% to $13.2 billion and adjusted earnings grew 5.2% to $5.24 billion.
Disappointing earnings from a number of key industry players, including Chipotle Mexican Grill Inc. (CMG) and AT&T Inc. (T) , left Wall Street in the lurch on Wednesday, Oct. 25, sending the Dow Jones Industrial Average more than 100 points lower and off from its record highs.
One-third of S&P 500 companies have reported earnings so far this reporting season with the pace picking up significantly this week. Of those, 72% have exceeded earnings estimates and 71% have bested revenue consensus, according to Thomson Reuters. Analysts anticipate blended earnings growth of 4.7% and revenue growth of 4.5%. Profit growth is nearly half that when excluding energy earnings.
Nike Inc. (NKE) was the best performer on the Dow, continuing to rally after its analyst day on Wednesday. At that event, the company said it anticipates earnings growth in the mid-teens and revenue growth in the high single digits over the next five years.
Janet Yellen may be out of the race as President Donald Trump's nominee for Federal Reserve chair, according to a report Thursday, Oct. 26, from Politico, which cited one person who speaks "regularly" with Trump. The report dropped the day after the president, in an interview, said he thinks Yellen is "terrific" but doubted whether he wanted to stick with a pick made by his predecessor.The European Central Bank said Thursday that it will trim the pace of its quantitative easing program, while keeping its key interest rates unchanged, and continue purchasing government, corporate and agency bonds for a further nine months.
"From January 2018 the net asset purchases are intended to continue at a monthly pace of €30 billion until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim," the ECB said.
The dovish tone to the QE changes, put downward pressure on the euro, which was trading near a one-week high prior to the announcement, as investors cut long positions upon seeing the Bank's commitment to long-term policy easing by reinvesting purchases made in the program "for an extended period of time ... and in any case for as long as necessary".
The U.S. trade deficit widened in September, while retail inventories fell. The trade deficit increased by 1.3% to $64.1 billion, according to the Census Bureau. Analysts expected a deficit of $63.9 billion. Retail inventories declined by 1%.
Weekly jobless claims increased in the past week, though at a slightly slower pace than anticipated. The number of new claims for unemployment benefits rose by 10,000 to 233,000, according to the Labor Department. Analysts expected an increase to 235,000. The less volatile four-week claims average declined by 9,000 to 239,500.
Pending home sales came in flat in September, a surprise to analysts looking for a slight rise. The National Association of Realtors' index held at 106 following a 2.8% drop in August. Analysts expected an increase of 0.2%.
Updated from 10:10 a.m. ET, Oct. 26.
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