The Week in Review: Looking At Stories That Moved Markets
Mixed earnings made for mixed markets most week. Investors seemed keen to turn their collars up against economic headwinds from both the U.S. and Europe and keep equities in focus, with a number of big names reporting.
|DJIA: +0.08% to 14,712.50||S&P 500: -0.18% to 1,582.24||NASDAQ: -0.33% to 3,279.26|
|Gold: -$8.40 to $1,453.60 per ounce||Oil: -0.95% to $92.75||U.S. 10-Year: -0.045 points to 1.664%|
Here’s how the markets traded this week:
U.S. GDP Advances Less Than Expected in the First Quarter: Preliminary data from the Bureau of Economic Analysis show that real gross domestic product increased at an annual rate of 2.5 percent in the first quarter of 2013. This compares to a 0.4 percent increase in the fourth-quarter, and falls short of expectations for 3.1 percent growth… (Read more.)
Is The U.S. Economy Finally Creating Jobs? Between the Labor Department’s Employment Situation Report — which showed that the U.S. economy created a disappointing 88,000 jobs in March — and the number of Americans applying for jobless benefits picking up pace throughout the month, a dark cloud has been hanging over the labor market. But — amid the current run of soft economic data — the Labor Department reported Thursday that last week initial claims for unemployment benefits fell to a five-year low, a possible indication that employers are experiencing higher demand and may increase hiring… (Read more.)
European Downturn Remains In Focus: The flash Markit Eurozone PMI reading for April remained flat at 46.5, indicating that the region’s economy is stuck in contraction. The services index edged up slightly to 46.6, still in contraction but also a two-month high. The manufacturing index dropped to 46.5, a four-month low. Markit Chief Economist Chris Williamson commented: “Although the PMI was unchanged in April, the survey is signalling a worrying weakness in the economy at the start of the second quarter, with signs that the downturn is more likely to intensify further in coming months rather than ease.”
On top of this, the flash reading for the German Composite Output Index fell to 48.8, a six-month low indicating contraction in the region’s largest economy.
Here’s your Cheat Sheet to this week’s top stock stories:
Amazon (NASDAQ:AMZN) fell more than 7 percent on Friday to close the week down with a net loss of about 1.5 percent. The company’s stock climbed through Thursday on a series of minor catalysts and positive earnings expectations, but collapsed after the results came in. Revenue increased 21.88 percent on the year to $16.07 billion, missing the average estimate of $16.16 billion. Adjusted earnings decreased 35.71 percent to $0.18 per share, beating estimates for $0.09… (Read more.)
Samsung (SSNLF.PK) attracted some attention when Lee Don Joo, president of the strategic marketing office at Samsung Mobile, said that “pre-order demand [for the Galaxy S4] is much strong than expected, so it’s difficult to rapidly boost supply in the short term.” The company also reported that first-quarter net income climbed 42 percent on the year to 7.2 trillion won ($6.5 billion) thanks to strong smartphone sales. Net sales climbed 17 percent to 52.9 trillion won ($47.5 billion).
J.C. Penney (NYSE:JCP) closed the week up more than 9 percent after George Soros disclosed a 7.9 percent passive stake in the beleaguered retailer. Soros joins a number of other well-known hedge-funds with major stakes in the company, such as Bill Ackman’s Pershing Square, which owns about 17.8 percent of the stock… (Read more.)
Elan Corp. (NYSE:ELN) has unanimously rejected the $11.25 per-share acquisition offer submitted by Royalty Pharma. Chairman Robert Ingram commented that the offer “grossly undervalues Elan’s current business platform and our future prospects.” Shares closed the week down 1.4 percent.
Netflix (NASDAQ:NFLX) closed the week up nearly 28 percent after reporting strong earnings. Revenue climbed 17.73 percent to $1.02 billion, in line with expectations. Earnings climbed from a loss of $0.08 per share in the year-ago period to a gain of $0.31, way ahead of the average estimate of $0.18. The company signed up 2.03 million new U.S. streaming subscribers to end the quarter with 29.17 million domestic subscribers.
Apple (NASDAQ:AAPL) closed the week up just over 6 percent after reporting earnings. Revenue increased 11.27 percent on the year to $43.6 billion, beating the average estimate of $42.59 billion. Adjusted earnings decreased 17.97 percent to $10.09 per share, beating the average estimate of $10.07 per share. The company also announced a 15 percent dividend hike and a $50 billion addition to its $10 billion share buyback program. However, gross margin shrank 9.9 points to 37.5 percent
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