The stock markets in the United States declined except NASDAQ today. The decline was primarily due to the mixed earnings reports as investors continue to focus their attention on the outlook of corporations for the full fiscal 2015
Some investors expressed concerns regarding corporate earnings, but they still believed that U.S. equities are still best for investment.
Jerry Braakman, chief investment officer at First American Trust, said, “We still have some concerns, especially on revenue growth and earnings growth.” He added that there was no alternative to stocks in this low-rate environment.
On the other hand, Janet Engels, director, portfolio advisory group at RBC Wealth Management commented, “We don’t anticipate any big surprises out of earnings. We do expect earnings will beat the current expectations, but that’s been the history. I’m not sure that it is in the very near term enough to drive the market wildly higher.”
Meanwhile, Brett Mock, managing director at Jones Trading Institutional Services said investors will have a better sense of corporations beating or missing expectations, as well as their guidance this week. As of Friday, 146 companies listed in the S&P 500 already released their quarterly financial results. This week is one of the busiest in the earnings season.
Analysts estimated that the earnings of companies in the S&P 500 would decline 4.3% in the first quarter, which was better than their estimated 5.6% decline last April 10. Bloomberg noted that 84% of the companies that already reported earnings results beat profit estimates while 51% posted higher-than-expected sales.
According to Francois Savary, chief investment officer at Reyl & Cie, People have gone too far in cutting their profit estimates for U.S. companies. This may give the market a short-term rebound as more earnings reports come in. I’m still cautious regarding growth in the next few quarters because of the impact of the economic slowdown and the surging dollar.”
- Dow Jones Industrial Average (DJIA) – 17,949.59 (-0.47%)
- S&P 500- 2,097.29 (-0.15%)
- NASDAQ- 5,014.10 (+0.39%)
- Russell 2000- 1,264.73 (-0.01%)
- EURO STOXX 50 Price EUR- 3,719.38 (+0.04%)
- FTSE 100 Index- 7,062.93 (+0.15%)
- Deutsche Borse AG German Stock Index DAX- 11,939.58 (+0.40%)
- Nikkei 225- 19,909.09 (+1.40%)
- Hong Kong Hang Seng Index- 27,850.49 (+2.79%)
- Shanghai Shenzhen CSI 300 Index- 4,619.16 (+2.15%)
Stocks in Focus
The shares of Dupont declined almost 3% to $70.69 per share after reporting its financial performance for the first quarter. The company posted earnings of $1.34 per share, higher than $1.31 per share consensus estimate. Its sales were $9.17 billion, lower than the $9.42 billion consensus estimate.
Echo Global Logistics surged more than 26% to $32.02 per share after reporting strong quarterly financial results. The company said its non-GAAP EBITDA rose 15% to $9.6 million, and total revenue increased 14% to $283 million for the first quarter. Echo Global also announced that it acquired Command Transportation.
The stock price of Mylan increased almost 9% to $74.07 per share after receiving a takeover proposal from a competitor. Teva Pharmaceutical Industries offered to acquire Mylan for approximately $40 billion in cash and stock to create the largest generic drug company by sales. Teva Pharmaceuticals gained 1.33% to $64.16 per share.