MENU

Dow Bounces Back

US – After its worst day of the year yesterday, the Dow Jones Industrial Average (DJINDICES:^DJI) bounced back today as investors saw buying opportunities and responded to a strong housing report and some bullish earnings reports. The blue chips finished the session up 1.1%.

Housing starts in March topped 1 million for the first time since 2008, hitting an annual rate of 1,036,000. Last month’s figure beat expectations by more than 100,000, and was a strong gain from starts in February at 968,000, which was revised up from 917,000. Construction of multifamily units jumped 27%, while single-family homes dropped 4.8%. Building permits, a leading indicator for housing starts, came in below expectations, possibly indicating that last month’s spike will be short-lived. The Consumer Price Index also declined slightly in March, essentially in line with expectations, indicating that despite the Fed’s continued stimulus, the economy is far away from any inflation concerns.

Three Dow components reported earnings today, with two beating expectations.

Coca-Cola (NYSE: KO) jumped 5.7%, to a 15-year high, after reporting earnings this morning and announcing plans to unload some of its bottling assets. Coke delivered an adjusted earnings of $0.46 per share, a penny better than both its results from a year ago and the Wall Street consensus. Revenue declined by1% to $11.04 billion but that also slightly beat estimates as the beverage giant lost two calendar days in the quarter. Overall volume worldwide increased by 4%. Coke’s decision to let go of some of its bottling operations comes less than three years after it doled out $12.3 billion to acquire those operations. The deal would give control back to five bottlers in exchange for money, territory, or other assets, but the details of the transactions have not yet been finalized.

Johnson & Johnson (NYSE JNJ) also posted earnings today, gaining 2.1% as a result. The health-care giant beat Wall Street estimates with an adjusted earnings per share of $1.44, up from $1.41 a year ago and better than estimates at $1.40. Revenue jumped 8.5% to $17.50 billion, also above expectations, and increased 9.8% in constant dollars. The growth was led by prescription drugs and over-the-counter medication, improving 10% and 14%, respectively. Medical sales increased 10% but analysts had expected stronger growth in that category.

Intel  (NASDAQ: INTC) was up 2.5% during the trading session and another 0.7% after hours once it reported quarterly results, despite forecasting a second-quarter sales decline of as much as 8% on slowing PC demand. The top chip maker remained confident in its full-year outlook, however, saying its new Haswell chips and ultra-thin laptops would reinvigorate sales in the latter half of the year. For the first quarter, Intel delivered sales of $12.58 billion, down 3% from $12.91 billion a year ago but in line with estimates. Earnings for the quarter was $0.40 a share, down from $0.55 a year ago, and a penny worse than analyst expectations.

Keep up to date with what’s happening in the US and Singapore markets. Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David KuoTake Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook   to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. This article was written by Jeremy Bowman, and first published on fool.com

All information is provided by The Motley Fool Singapore Pte Ltd, a licenced investment advisory research provider (MAS Licence No. FA100056-1). Any information, commentary, recommendations or statements of opinion provided here are for general information purposes only. It is not intended be personalised investment advice or a solicitation for the purchase or sale of securities. Before purchasing any discussed securities, please be sure actions are in line with your investment objectives, financial situation and particular needs. International investors may be subject to additional risks arising from currency fluctuations and/or local taxes or restrictions. The information contained in this publication are obtained from, or based upon publicly available sources that we believe to reliable, but we make no warranty as to their accuracy or usefulness of the information provided, and accepts no liability for losses incurred by readers using research. Recommendations and opinions are subject to change without notice. Please remember that investments can go up and down, including the possibility a stock could lose all of its value. Past performance is not indicative of future results.

Copyright © 2018 The Motley Fool Singapore Pte. Ltd. All rights reserved. Company Reg. No. 201227853N