Continued stellar earnings reports have sent stocks and exchange traded funds (ETFs) on a rally that finally pushed the Dow Jones Industrial Average above 9,000 for the first time since early January.
There are earnings galore this morning:
- Ford Motor Company (F) snapped its string of quarterly losses by posting earnings of $2.3 billion in the second quarter. This surge was driven by a debt reduction program that the company put in place.
- In the industrial world, diversified U.S. manufacturer 3M (MMM) earned $1.20/share, smashing Wall Street’s expectations of $0.94/share. This outperformance was driven by a surge in consumer demand for electronics and enabled the company to raise its revenue forecast. The news sent the Vanguard Industrials ETF (VIS) up 1.5% in morning trading.
- Illinois-based McDonalds (MCD) released earnings of $0.98/share for the quarter and barely beat analysts’ expectations of $0.97/share. The company stated that the a rise in the strength of the dollar hurt their bottom line, but the success of their McCafe coffee drink line is increasing revenues.
- The world’s largest shipping carrier reported a drop in profits of 49%. UPS Inc. (UPS) reported earnings of $0.44/share and fell short of Wall Street’s expectations of $0.49/share. The company has lowered its projections as volumes continue to remain low.
On a separate note, the Labor Department stated that new jobless claims rose to 554,000 last week. This tally of initial claims for unemployment was a bit higher than the 550,000 anticipated, but many believe the number is distorted because of the timing of auto-plant shutdowns. Total jobless benefit rolls fell more than expected, to 6.2 million. When one considers the number of individuals receiving extended unemployment benefits, the total jobless number is closer to 9.1 million.
In the real estate world, the National Association of Realtors stated that existing home sales increased by 3.6% in June. Purchases rose to an annual rate of 4.89 million, stronger than forecast and the highest level since October. Experts believe that this jump in resales was spurred by tax incentives, lower borrowing costs and foreclosure-driven prices. Some believe that this upward trend may slow as mortgage rates rise to 5.2% from 5.14%. The news sent the iShares Dow Jones U.S. Real Estate (IYR) up nearly 3% in intraday trading.
Overall, the Dow Jones Industrial Average and Nasdaq gained 1.7%, while the S&P 500 added 1.8% in morning trading.
For more stories on industrials, visit our industrials category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.