Today’s reporting did not offer much in the way of clarity for even though the market had a good day with the Dow up nearly 3 digits again, all the news was bad. Transportation, tech, Facebook, UPS, FedEx, Amazon, Bristol-Meyers, AstraZeneca, Twitter – all down. So what caused the big buying spree? Was it just bargain hunting? Whatever it was, it again gave the market a renewed confidence for the third consecutive session and with volume considerably above average at 7.7 billion shares. Once again, the Q2 forecast has been raised. It is now 10.7 percent. Yesterday it was 9.9, Tuesday 9.1, and a few weeks ago 8.0 percent earnings growth. Do they deliberately estimate low so the market will go up?
thu JULY 27, 2017
/ 5:36 pM
Tech,
transports drag on Wall Street; Dow hits record
DJ: 21,796.55 +85.54 NAS: 6,382.19
-40.56 S&P: 2,475.42
-2.41 7/27
(Reuters) - A swoon in
technology and transportation shares led the S&P 500 slightly lower on
Thursday on a day full of corporate earnings reports, but the Dow industrials
set a record closing high, helped by a jump in Verizon.
The Dow Jones Transport Average .DJT, often looked at as
a gauge of the economy's health, closed down 3.1 percent, dragged lower after a worrisome
outlook from package delivery company United Parcel Service (UPS.N).
The transports fell to their lowest point in nearly two months as UPS
rival FedEx (FDX.N) also declined. The S&P 500 technology sector .SPLRCT was the worst performing
major group, falling 0.8 percent even as Facebook (FB.O) shares gained 2.9 percent after the
social media company's results. Tech has
been the best-performing sector this year, leading the S&P 500's 10.6
percent run in 2017.
After the bell,
Amazon.com (AMZN.O) shares fell 2.7 percent after the
e-commerce company's results. Amazon is the last of the high-flying companies
known as "FANG" stocks to report this quarter.
Wall Street's main stock indexes had tallied intraday record
highs earlier in the session.
"The general
sentiment of the market coming into the day was that transportation stocks are
telling us something that we're not paying attention to," said Art Hogan, chief market
strategist at Wunderlich Securities in New York. "You've got a general feeling a lot of
good news is priced in to this market," Hogan said. "That holds with
technology. The problem with momentum stocks, once they start heading in a
direction they get there violently, and that's what we're seeing today."
The Dow Jones Industrial Average .DJI rose
85.54 points, or 0.39 percent, to 21,796.55, the S&P 500 .SPX lost
2.41 points, or 0.10 percent, to 2,475.42 and the Nasdaq Composite .IXIC dropped
40.56 points, or 0.63 percent, to 6,382.19.
"The overall weakness in technology to me is a
little bit of a surprise.
We have seen some decent reports," said Peter Jankovskis, co-chief
investment officer at OakBrook Investments in Lisle, Illinois. "There
could be just a little bit of profit-taking going on here as we move near the
end of the month."
The PowerShares QQQ
Trust (QQQ.P), an exchange-traded fund (ETF)
tracking the Nasdaq 100 .NDX, hit a record intraday high shortly after midday
in New York but fell as much as 2.5 percent from there with a spike in volume.
As the market fell, Nasdaq 100 futures NQcv1 posted their busiest hour in terms
of volume since at least mid March. “My
guess is this is selling by a large ETF holder, likely in the QQQ”, said Kim
Forrest, senior equity research analyst at Fort Pitt Capital Group in
Pittsburgh, referring to the market's afternoon decline.
Healthcare .SPXHC, which has been the second-best
performing group this year, fell 0.7 percent.
Bristol-Myers Squibb (BMY.N) shares shed 3.1 percent after a failed
cancer-drug trial from rival AstraZeneca Plc (AZN.L) hurt sentiment for Bristol's similar
treatment regimen. AstraZeneca's U.S.-listed shares tumbled 14.9 percent.
With nearly half the S&P 500 having reported, second-quarter
earnings are expected to
have climbed 10.7 percent, compared to an 8-percent rise expected at the
start of the month, according to Thomson Reuters I/B/E/S.
Verizon (VZ.N) shares surged 7.7 percent. The No. 1
U.S. wireless carrier's quarterly revenue topped expectations. The stock was
the biggest support for the S&P 500, followed by Facebook and telecom rival
AT&T (T.N).
Twitter (TWTR.N) shares fell 14.1 percent. The social
media platform disappointed investors with stagnant monthly active user growth.
Declining issues outnumbered advancing ones on the NYSE by a
1.28-to-1 ratio; on Nasdaq, a 2.03-to-1 ratio favored decliners.
About 7.7 billion shares
changed hands in U.S.
exchanges, well above the 6.1 billion daily average over the last 20
sessions.
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