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 readings on home
prices and consumer confidence data, only to bounce back in
midafternoon trading.
The S&P 500 (SPX) was trading marginally higher by about 5
points, or 0.2%, to 2,113. The Dow Jones Industrial Average (DJI),
which had dropped by as much as 120 points in early trading in New
York, was up 57 points, or 0.3% higher, at 18,097.
Meanwhile, the tech-laden Nasdaq Composite (RIXF) was switching
between gains and losses, and was most recently off about 10 points
to 5,050, as Twitter shares were halted as the social media's
quarterly results were released inadvertently
(http://www.marketwatch.com/story/twitter-shares-fall-after-selerity-tweets-leaked-earnings-2015-04-28).
James Abate, chief investment officer at Centre Funds, was
concerned about markets' march higher despite deteriorating
fundamentals.
"Recent economic data indicate contraction and a slowdown in
growth. Meanwhile, earnings outlook is for zero growth. It is
possible that investors are treating this as 'bad news is good
news' assuming the Fed will not raise rates at all, given the
economy is not doing as well as they hoped it would," Abate
said.
"Colin Cieszynski, chief market strategists at CMC Markets,
earlier blamed worse-than-expected earnings from companies such as
Ford and Whirlpool on selling pressure, when Dow dropped more than
100 points at session lows.
"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.
The Federal Reserve Open Market Committee meeting kicked 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.
Also read: 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:
Twitter Inc. (TWTR) shares tanked 17% after the company's
first-quarter results were leaked by data-mining platform Selerity.
Twitter's first-quarter profits were better than expected but its
revenues missed analysts' estimates.
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 up 0.5%,
however.
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 fell 0.7%.
Another drug maker, Merck & Co. Inc. (MRK) jumped 5.6% 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 6.9% 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 7.2% 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)
closed lower.
Asia stocks closed mixed
(http://www.marketwatch.com/storyno-meta-for-guid), with Japanese
shares shrugging off a sovereign credit downgrade by Fitch
Ratings.
Oil prices
(http://www.marketwatch.com/story/oil-slides-with-brent-dropping-below-65-2015-04-28)
pared much of the gains but settled above $57 a barrel. Gold
futures
(http://www.marketwatch.com/story/gold-consolidates-above-1200-as-dollar-softens-2015-04-28)finished
at their highest level in about three weeks, gaining 0.9%, to
$1,213.90. The dollar (DXY) was mostly lower against other major
currencies.
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