Thierry Martin
10-13-2006, 08:20 AM
End of Day Market Summary Thursday, 10/12/2006
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Stocks rallied on stronger than expected earnings from McDonald's Corp., Costco Wholesale Corp. and Yum Brands Inc, with a batch of new orders for Boeing Co. helping propel the Dow Jones Industrial Average to a new closing high. A favorable Federal Reserve Beige Book survey, showed few signs of increased price pressure, and this provided further support.
Today, the Dow Jones Industrial average closed up 95.57 or 0.81% to 11,947.70, blowing past the previous record closing high of 11,867.17 set Tuesday and notched its fifth record in little more than a week. It also marked a new record trading high of 11,959.63, coming about 40 points shy of 12,000 - the next major milestone for the market. The broader S&P 500 index closed up 12.88 or 0.95% to 1,362.83, and the tech-fueled Nasdaq composite index closed up 37.91 or 1.64% to 2,
346.18.
Market breadth was positive. On the New York Stock Exchange, losers beat winners by nearly 13 to 3 on volume of 1.559 billion shares. On the Nasdaq, decliners topped advancers by 11 to 3 on volume of 2.02 billion shares.
The Beige Book summary of economic conditions, states that the economy kept growing since early September but certain sectors like real estate were showing weakness. Investors reacted positively to this report that the economy continued to grow despite cooling in the housing market. This positively supports a soft landing for the economy, and that's good news for the market.
The U.S. trade gap of goods and services set a new record high in August, driven up once again by a record price of crude oil. U.S. imports outstripped exports by $69.9 billion, up from the previous record $68.0 billion level set in July. The trade deficit widening by 2.7% and could force economists to trim their forecasts for third-quarter GDP, which have been coming down steadily to a rate below a 3.0% annual growth rate. A worsening trade deficit would be a further drag on economic growth. The jump in the deficit surprised analysts since they had been expecting the deficit to narrow to $66.4 billion.
Shares of McDonald's closed up $0.98 or 2.4% to $42.23, after the fast-food chain said third-quarter earnings would be better than analysts expected. It posted a 7.7% increase in September sales and said preliminary third-quarter EPS is expected to be 68 cents. World wide sale for the company was up 9.8% for the month and 8.4% for the quarter.
Stock of PepsiCo Inc. closed down $0.94 or 1.2% to $62.85, despite reporting higher earnings. The company reported 71% rise in third-quarter earnings and raised its full-year outlook. Its third quarter earnings rose to $1.48 billion, from the $864 million last year. Quarterly net revenue rose 9.4% to $8.95 billion from $8.18 billion a year ago. Results were helped by strength in its international business, non-carbonated drinks and salty snacks. However, operating margins were squeezed by increased spending and higher supply-chain costs.
Shares of Harley-Davidson Inc. closed up $1.80 or 3% to $64.95, after reporting better-than-expected results. Its earnings in the latest quarter rose 18% to $312.7 million, from $265 million last year. Revenue rose 14.3% to $1.64 billion, against the $1.58 billion expected by analysts.
Shares of Boeing Co. rose almost 2.5% to close at $83.64, after the company said it's booked 30 new orders for its 787 Dreamliner plane in the last week, including 10 from an unidentified buyer. Twenty of the new 787 orders came from Singapore Airlines, with deliveries scheduled from 2011 through 2013.
Shares of Yum Brands surged 8.3% to $59.08 after it reported third-quarter earnings that beat forecasts thanks to double-digit profit gains in its international business, led by a 26% jump in China. The company reported a net income of $230 million, compared with the $205 million a year ago. Revenue was $2.28 billion vs. last year's $2.24 billion. The company expects to report full-year earnings of $2.89 a share, against the $2.84 estimated by analyst.
Shares of Costco closed up 7.7% to $53.90, after it reported a 1% increase in fourth-quarter profit, beating its lowered forecast. The company also said it reviewed its stock-option program and doesn't expect to restate results. They expect that holiday shopping will be "promising" this year and forecast fiscal 2007 earnings to rise in a range of 9% to 15%.
Light, sweet crude for November delivery rose 27 cents to $57.86 a barrel on the New York Mercantile Exchange. The Energy Department said domestic distillate supplies, which include winter heating oil, fell for the first time in nine weeks. Crude inventories, however, rose for a second straight week while gasoline stocks were up for an eighth week in a row.
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Stocks rallied on stronger than expected earnings from McDonald's Corp., Costco Wholesale Corp. and Yum Brands Inc, with a batch of new orders for Boeing Co. helping propel the Dow Jones Industrial Average to a new closing high. A favorable Federal Reserve Beige Book survey, showed few signs of increased price pressure, and this provided further support.
Today, the Dow Jones Industrial average closed up 95.57 or 0.81% to 11,947.70, blowing past the previous record closing high of 11,867.17 set Tuesday and notched its fifth record in little more than a week. It also marked a new record trading high of 11,959.63, coming about 40 points shy of 12,000 - the next major milestone for the market. The broader S&P 500 index closed up 12.88 or 0.95% to 1,362.83, and the tech-fueled Nasdaq composite index closed up 37.91 or 1.64% to 2,
346.18.
Market breadth was positive. On the New York Stock Exchange, losers beat winners by nearly 13 to 3 on volume of 1.559 billion shares. On the Nasdaq, decliners topped advancers by 11 to 3 on volume of 2.02 billion shares.
The Beige Book summary of economic conditions, states that the economy kept growing since early September but certain sectors like real estate were showing weakness. Investors reacted positively to this report that the economy continued to grow despite cooling in the housing market. This positively supports a soft landing for the economy, and that's good news for the market.
The U.S. trade gap of goods and services set a new record high in August, driven up once again by a record price of crude oil. U.S. imports outstripped exports by $69.9 billion, up from the previous record $68.0 billion level set in July. The trade deficit widening by 2.7% and could force economists to trim their forecasts for third-quarter GDP, which have been coming down steadily to a rate below a 3.0% annual growth rate. A worsening trade deficit would be a further drag on economic growth. The jump in the deficit surprised analysts since they had been expecting the deficit to narrow to $66.4 billion.
Shares of McDonald's closed up $0.98 or 2.4% to $42.23, after the fast-food chain said third-quarter earnings would be better than analysts expected. It posted a 7.7% increase in September sales and said preliminary third-quarter EPS is expected to be 68 cents. World wide sale for the company was up 9.8% for the month and 8.4% for the quarter.
Stock of PepsiCo Inc. closed down $0.94 or 1.2% to $62.85, despite reporting higher earnings. The company reported 71% rise in third-quarter earnings and raised its full-year outlook. Its third quarter earnings rose to $1.48 billion, from the $864 million last year. Quarterly net revenue rose 9.4% to $8.95 billion from $8.18 billion a year ago. Results were helped by strength in its international business, non-carbonated drinks and salty snacks. However, operating margins were squeezed by increased spending and higher supply-chain costs.
Shares of Harley-Davidson Inc. closed up $1.80 or 3% to $64.95, after reporting better-than-expected results. Its earnings in the latest quarter rose 18% to $312.7 million, from $265 million last year. Revenue rose 14.3% to $1.64 billion, against the $1.58 billion expected by analysts.
Shares of Boeing Co. rose almost 2.5% to close at $83.64, after the company said it's booked 30 new orders for its 787 Dreamliner plane in the last week, including 10 from an unidentified buyer. Twenty of the new 787 orders came from Singapore Airlines, with deliveries scheduled from 2011 through 2013.
Shares of Yum Brands surged 8.3% to $59.08 after it reported third-quarter earnings that beat forecasts thanks to double-digit profit gains in its international business, led by a 26% jump in China. The company reported a net income of $230 million, compared with the $205 million a year ago. Revenue was $2.28 billion vs. last year's $2.24 billion. The company expects to report full-year earnings of $2.89 a share, against the $2.84 estimated by analyst.
Shares of Costco closed up 7.7% to $53.90, after it reported a 1% increase in fourth-quarter profit, beating its lowered forecast. The company also said it reviewed its stock-option program and doesn't expect to restate results. They expect that holiday shopping will be "promising" this year and forecast fiscal 2007 earnings to rise in a range of 9% to 15%.
Light, sweet crude for November delivery rose 27 cents to $57.86 a barrel on the New York Mercantile Exchange. The Energy Department said domestic distillate supplies, which include winter heating oil, fell for the first time in nine weeks. Crude inventories, however, rose for a second straight week while gasoline stocks were up for an eighth week in a row.
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