By Anora Mahmudova and Sara Sjolin, MarketWatch
Coach, Whirlpool slump after earnings miss
U.S. stock indexes wiped away early losses to show gains on a
choppy trading day Tuesday ahead of the Federal Reserve's two-day
policy meeting.
The move higher comes after the Dow had dropped by more than 100
points, on the heels of a batch of disappointing reading on home
prices and consumer confidence data, only to bounce back in
midafternoon trading.
The S&P 500 (SPX) was trading higher by about 4 points, or
0.2%, to 2,112.59. The Dow Jones Industrial Average (DJI), which
had dropped by as much as 120 points in early trading in New York,
was up 53 points, or 0.3% higher, at 18,091.95. The Nasdaq
Composite (RIXF) was about flat at 5,063.97.
"Colin Cieszynski, chief market strategists at CMC Markets,
blamed worse-than-expected earnings from companies such as Ford and
Whirlpool on selling pressure.
"It appears that consumers are not spending on big-ticket items,
while confidence also dropped. In the next month or so, if we do
not see improved economic numbers, markets might see a deeper
correction, as a lot of investors had been expecting consumer
spending to pick up," Cieszynski said.
A recent run-up in stocks and corresponding high valuation might
have convinced people to lock in profits.
"With the strength in equities of late, investors are looking
for any excuse to lock in some profits and Fed meetings tend to
provide a prompt," said Mike McCudden, head of derivatives at
stockbroker Interactive Investor, in a note.
The Federal Reserve Open Market Committee meeting kicks off on
Tuesday, but the interest-rate statement isn't released until
Wednesday afternoon at 2 p.m. Eastern Time. Investors will be
looking for clues as to whether a near-term rate hike is still in
play, although a large majority of Fed watchers don't think the
central bank will provide any hints, preferring to keep all options
on the table
(http://www.marketwatch.com/story/fed-not-ready-to-concede-it-wont-hike-this-summer-2015-04-27).
For the discussion on Wednesday, the FOMC will have the
first-quarter GDP number to include in their assessment of the
economy and interest rates.
Lousy corporate revenues could keep the Fed on hold
(http://www.marketwatch.com/story/lousy-corporate-revenues-could-keep-the-fed-on-hold-2015-04-27)
Tuesday's data:Consumers confidence
(http://www.marketwatch.com/story/consumers-less-confident-in-april-after-slowdown-in-hiring-2015-04-28)
fell in April, reflecting a slowdown in hiring and dimmer
expectations about economic growth in the months ahead.
U.S. house prices
(http://www.marketwatch.com/story/case-shiller-20-city-home-price-index-up-05-in-february-2015-04-28-99105)
picked up in February, rising 0.5%, according to the
S&P/Case-Shiller 20-city composite index released Tuesday.
Compared with February 2014, prices for the 20-city index were up
5% -- the fastest growth in half a year.
Earnings: Reporting ahead of the bell, Ford Motor Co.(F) said
profit was down 7%
(http://www.marketwatch.com/story/ford-profit-down-7-on-losses-in-europe-latam-2015-04-28)
in the first quarter as profitability in North America and Asia was
offset by losses in Europe and South America. Shares were
little-changed.
Drug maker Pfizer Inc.(PFE) reported a slight rise in
first-quarter profit
(http://www.marketwatch.com/story/pfizer-trims-outlook-on-strong-dollar-2015-04-28),
but trimmed its full-year outlook. Shares climbed 0.5%.
Another drug maker, Merck & Co. Inc. (MRK) put on 5.1% after
raising its earnings guidance for the full year
(http://www.marketwatch.com/story/merck-raises-outlook-as-profit-sales-top-estimate-2015-04-28)
despite the negative impact of the stronger dollar.
Shares of Coach Inc.(COH) slumped 7.9% after the luxury-goods
retailer topped fiscal third-quarter profit expectations, but
missed on sales
(http://www.marketwatch.com/story/coachs-stock-drops-after-sales-fall-more-than-expected-2015-04-28).
Shares of Whirlpool Corp.(WHR) dropped 6.4% after the
home-appliances maker cut its full-year earnings guidance
(http://www.marketwatch.com/story/whirlpool-profit-falls-short-cuts-outlook-2015-04-28).
Apple earnings: After Monday's closing bell, tech giant Apple
(AAPL) posted a 33% rise in quarterly profit
(http://www.marketwatch.com/story/apple-posts-33-rise-in-earnings-raises-div-2015-04-27),
boosted by a surge in iPhone sales and solid growth in China. Apple
also raised its dividend, by 11%, and its share-repurchase program
by $50 billion, to $140 billion. Shares, however, fell 1.2%. Read:
How to play Apple stock after the earnings call
(http://www.marketwatch.com/story/how-to-play-apple-stock-post-earnings-2015-04-27)
Morgan Stanley lifted its price target on Apple to $166 from
$160 and said the company is among its "best idea" stocks.
Don't miss: Who else is miffed about Apple's 'very modest' watch
launch?
(http://www.marketwatch.com/story/who-else-is-miffed-about-apples-very-modest-watch-launch-2015-04-28)
Other markets:European stock markets
(http://www.marketwatch.com/story/european-stocks-fall-as-commerzbank-shares-drop-fed-meeting-eyed-2015-04-28)
were lower, with investors there also taking a cautious stance
ahead of the Fed meeting.
Asia stocks closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), with Japanese
shares shrugging off a sovereign credit downgrade by Fitch
Ratings.
Metals dropped across the board, and so did energy prices
(http://www.marketwatch.com/story/oil-slides-with-brent-dropping-below-65-2015-04-28).
The dollar (DXY) was mostly lower against other major
currencies.
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