Benchmarks closed mixed on Thursday, with the S&P 500 and the Nasdaq being lifted by upbeat third-quarter corporate earnings reports, while setbacks in White House’s efforts to raise corporate tax grabbed investors’ attention. The Dow was weighed by steep decline in International Business Machines after it missed earnings estimates.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 6.26 points, or less than 0.1%, to close at 35,603.08, weighed down by 9.6% decline in shares of International Business Machines Corporation IBM. IBM carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 rose 13.59 points higher, or 0.3%, to close at a record high of 4,549.78 on Thursday. Seven of the 11 major sectors of the broader index closed in the green led by 1.4% gain in the consumer discretionary sector. The energy sector’s 1.8% loss capped gains for the index. The Nasdaq Composite Index closed at 15,215.70, after adding 94.02 points, or 0.6%, led by 10.3% rise in share of Match Group, Inc. MTCH.
On Thursday, the fear-gauge CBOE Volatility Index (VIX) decreased 3.1%, to close at 15.01. Declining issues outnumbered advancing ones on the NYSE by a 1.22-to-1 ratio. A total of 10.07 billion shares were traded yesterday, lower than the last 20-session average of 10.27 billion.
Q3 Earnings Report Continues
On Thursday, business houses continue to report third-quarter 2021 earnings report, while some better-than-expected reports boosted the S&P 500 and the Nasdaq, some earnings miss capped gains.
Tesla, Inc. TSLA reported third-quarter 2021 earnings on Wednesday after market close, and the upbeat results helped the share prices to jump 3.3% yesterday. The electric vehicle giant reported earnings of $1.86, which surpassed the Zacks Consensus Estimate of $1.39. Total revenues came in at $13,757 million, beating the consensus mark of $13,163 million. (Read More)
Another tech giant, International Business Machines also reported earnings on Wednesday after market close. While the company reported third-quarter 2021 earnings of $2.52 per share, surpassing the Zacks Consensus Estimate of $2.49, IBM missed revenue estimates by 0.8%, which caused its shares to tumble yesterday. (Read More)
Similarly, yesterday, AT&T Inc. T reported third-quarter 2021 earnings of 87 cents per share, beating the Zacks Consensus Estimate of 76 cents, but missed on the revenue estimates. Shares dipped 0.6% after the company reported that revenues were down 5.7% year over year. (Read More)
Tax on Billionaires Hit a Snag
Investors on Thursday kept a close watch on developments around President Joe Biden’s proposed spending bills. According to a Washington Post’s report, Biden’s advisers are floating new plans, which include a tax on billionaires’ assets, a minimum tax on corporations and a tax on companies issuing stock buybacks, potentially raising hundreds of billions of dollars. Earlier on Wednesday Democratic Senator Kyrsten Sinema of Arizona had underlined that she would oppose any increases in the tax rates for businesses, the rich or capital gains.
Initial Claims Hits Post-Pandemic Era Low
On Thursday, the government reported that initial jobless claims for the week ending Oct 16, fell to 290,000, lower than the consensus estimate of 299,000. However, the figures for the week ending Oct 9 were upwardly revised to 296,000. The Labor Department’s report also states that continuing claims also dropped to a new pandemic low, falling to 2.48 million for the week ending Oct 9. For the week, companies held on to existing employees amid the acute shortage of labor in the country. Initial claims fell in the states of Virginia, Pennsylvania and Michigan.
Existing Home Sales Jump in September
The National Association of Realtors reported yesterday that existing-home sales rose 7% to a seasonally adjusted rate of 6.29 million in September, higher than the consensus estimate of 6.07 million. The median existing-home price for all houses last month was $352,800, up 13.3% from the same period last year and unsold inventory sits at a 2.4-month supply, down 7.7% from August, at the present sales pace.
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