Stock Market News for Jul 29, 2021

·4 min read

U.S. stock markets closed mixed on Wednesday following the Fed's  decision to keep interest rate near zero. Meanwhile, the second-quarter earnings results continued to remain strong. The Dow declined while the Nasdaq Composite advanced. The S&P 500 remained flat.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.4% or 127.59 points to close at 35,930.93. Notably, 21 components of the 30-stock index ended in the red while 9 in green.  However, the tech-heavy Nasdaq Composite finished at 14,762.58.58, gaining 0.7% or 102.01 points due to strong performance by technology behemoths.

Meanwhile, the S&P 500 dropped marginally by 0.82 points to end at 4,400.64. The Energy Services Select Sector SPDR (XLE)  increased 0.9% while the Consumer Staples Select Sector SPDR (XLP) decreased 0.9%. Seven out of eleven sectors of the broad-market index closed in red while four in green.

The fear-gauge CBOE Volatility Index (VIX) down 5.4% to 18.31. A total of 9.86 billion shares were traded on Wednesday, inline with the last 20-session average. Advancers outnumbered decliners on the NYSE by a 1.85-to-1 ratio. On Nasdaq, a 2.61-to-1 ratio favored advancing issues.

Fed Reaffirms Ultra-Dovish Policies

On Jul 28, after the conclusion of the Fed's two-day FOMC meeting, the central bank has kept its benchmark interest rate same at 0-0.25%. However, the committee approved unanimously that the economy has “strengthen.” This has happened despite the concern over the resurgence of the Delta variant of the coronavirus.

At the same time, Fed Chairman Jerome Powell said that the economy has not reached substantial further progress yet both in terms of price stability and maximum employment. Powell said, “We see ourselves having some ground to cover to get there.”

Any change in the central bank's existing dovish-monetary policies, like the starting of the tapering of the $120 billion monthly bond-buying program and ultimately hiking the benchmark interest rate, will take place once the Fed's inflation-unemployment goal will achieve.

Robust Q2 Earnings So Far

As of Jul 28, 195 companies of the S&P 500 Index reported results. Total earnings of these companies were up 105% year over year on 22.3% higher revenues. Moreover, 90.8% of these companies beat their earnings per share (EPS) estimates and 86.2% surpassed revenue estimates.

For the second quarter as a whole, total earnings of the S&P 500 Index are expected to be up 83.9% year over year on 21.3% higher revenues. This indicates an improvement over the initial projection of EPS increasing 62.2% from the same period last year on 18.2% higher revenues.  

The Boeing Co. BA reported adjusted earnings of $0.40 per share for second-quarter 2021 in contrast to the Zacks Consensus Estimate of a loss of $0.65. Boeing’s revenues amounted to $16,998 million, which missed the Zacks Consensus Estimate of $17,027 million. The top line however improved  from the year-ago quarter’s figure of $11,807 million. This improvement in the top line was driven by higher commercial airplanes and services volume. (Read More)

Pfizer  Inc. PFE reported second-quarter 2021 adjusted earnings per share of $1.07, which comprehensively beat the Zacks Consensus Estimate of $0.97. Revenues came in at $18.98 billion, which beat the Zacks Consensus Estimate of $17.54 billion, mainly driven by sales of Pfizer and partner BioNTech’s BNTX COVID-19 vaccine, BNT162b2. (Read More)

Consequently, shares of Pfizer, Boeing and BioNTech were up 3.2%, 4.2% and 10.4%, respectively. Pfizer and Boeing carry a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The U.S. trade deficit in goods rose 3.5% in June to a record $91.2 billion. U.S. wholesale inventories surged 0.8% in June while retail inventories increased 0.3%. WTI crude oil inventories fell 4.1 million barrels for the week ended Jul 23.

Stocks That Have Made Headline

Old Dominion's Q2 Earnings Beat Estimates, Increase Y/Y

Old Dominion Freight Line’s ODFL second-quarter 2021 earnings per share of $2.31 outpaced the Zacks Consensus Estimate by $0.14. The bottom line surged 84.8% year over year. (Read More)

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