Mixed corporate earnings produced varied results on Wall Street this week, resulting in gains for the NASDAQ, losses for the Dow and a nearly flat S&P 500.
The tech-rich NASDAQ Composite Index, buoyed by strong results from Apple and Facebook, advanced 17.41 points (0.39 percent) on the week to 4,449.56.
However, the Dow Jones Industrial Average, weighed down by some disappointing results from blue-chip companies, dropped 139.61 (0.82 percent) to 16,960.57.
Splitting the difference was the S&P 500, the most broad-based of the three leading indices, which finished essentially flat at 1,978.34, up 0.12 of a point.
Earnings took center stage given a relatively light week of US economic data that will pick up considerably next week.
Market observers were positive on earnings season after the initial wave of reports, but there was greater hesitancy by week’s end as more companies disappointed.
“It’s been an okay, but not a great, earnings season, and not enough to get some momentum behind the market to make higher levels,” Michael James, managing director of equity trading at Wedbush Securities, said on Friday.
Some of the biggest disappointments came from the 30-member Dow. Aviation giant Boeing, down 1 percent for the week, boosted its profit forecast for this year on better-than-expected earnings, but rattled the market by disclosing a US$272 million after-tax charge to reflect additional work on the huge KC-46A Tanker program for the US Air Force.
McDonald’s, which dropped 3.3 percent, found itself facing tough questioning from analysts after reporting another set of lackluster profits on fairly flat global sales that resulted in a 0.7 percent drop in earnings compared with a year ago.
The fast-food giant also contended with a food safety scandal in Asia after Shanghai officials shuttered a food supplier for mixing out-of-date meat with fresh product following an investigative report by a local television station. On Friday, McDonald’s said its restaurants in Japan had stopped selling products made with chicken from China.
Other blue-chip companies to disappoint included Coca-Cola (down 3.4 percent) and Visa (down 2.5 percent).
However, not all of the underperformers came in the Dow. Online retailing giant Amazon, a NASDAQ stock, plummeted nearly 10 percent on Friday after reporting a net loss of US$126 million for the second quarter, much bigger than the US$7 million loss a year ago.
Analysts said the market is losing patience with the online retailer despite strong revenue growth.
However, the weak Amazon report was more than offset by positive news from Apple (up 3.4 percent), which notched an 11.6 percent rise in quarterly profits to US$7.7 billion behind strong iPhone sales, and Facebook (up 9.9 percent), which saw quarterly profits more than double to US$791 million, thanks to strong ad revenues.
Of the 229 companies in the S&P 500 to report earnings so far, 155 have beaten analyst expectations, 41 have missed and 33 have met, according to S&P Capital IQ.
Next week’s earnings calendar is also heavy and includes Dow members ExxonMobil, Pfizer and Procter & Gamble, as well as microblogging site Twitter and UPS.
The week will also feature a busy schedule of economic data, including this month’s labor market report, the S&P Case-Shiller index of home prices for May, the US Conference Board’s report on consumer confidence for this month and the first assessment of second-quarter GDP.
Analysts are also looking ahead to a two-day monetary policy meeting of the US Federal Reserve concluding on Wednesday.
International crises in Ukraine and Israel also have the potential to rattle investors. While analysts say the market has generally been more focused on economic news compared with the problems in Ukraine and Gaza, unexpected negative developments in these regions could spark selling.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS