Stocks trade flat after mixed earnings results
NEW YORK (AP) — A mix of good and bad quarterly earnings news from big U.S. companies kept the stock market flipping between small gains and losses in midday trading Tuesday.
Wendy’s and United Technologies rose after posting better results than financial analysts expected. Netflix and the Altria Group, maker of Marlboro cigarettes, fell after their results came up short.
United Technologies led the Dow Jones industrial average index up, climbing $2.36, or 2 percent, to $104.47. The conglomerate said strong orders for its Otis elevator business in China and commercial airline parts helped lift sales and profits.
Shortly after noon, the Dow was up 23 points, or 0.1 percent, to 15,569.
The Standard & Poor’s 500 index dipped two points, or 0.1 percent, to 1,693. The Nasdaq composite fell 12 points, or 0.4 percent, to 3,587.
“In the absence of major economic news, the focus is on earnings this week,” said David Joy, chief market strategist at Ameriprise Financial. “And there’s nothing today to drive the market dramatically one way or another.”
Wendy’s jumped 74 cents, or 11 percent, to $7.41. The fast-food company’s net income came in above Wall Street’s expectations. Wendy’s also announced plans to sell 425 restaurants as franchises and raised its quarterly dividend by a penny to 5 cents.
It’s a busy day for earnings, with 35 companies in the S&P 500 scheduled to turn in results. The scorecard for the second quarter looks good so far. More than six out of every 10 companies have posted earnings that surpassed Wall Street’s expectations, according to S&P Capital IQ.
Analysts forecast that second-quarter earnings at companies in the S&P 500 increased 3.5 percent over the same period last year.
Marlboro maker Altria Group said higher prices and lower expenses from a legal settlement offset a drop in cigarette sales and helped the company post an increase in profits, but the results still fell short of analysts’ expectations. Altria’s stock sank 97 cents, or 3 percent, to $35.91.
Netflix dropped $13.75, or 5 percent, to $248.30. The company said late Monday that it signed up fewer subscribers than financial analysts had projected. Big expectations have propelled Netflix’s stock up 167 percent since the start of the year, adding more pressure on the company to deliver amazing numbers.
In the market for U.S. government bonds, the rate on the 10-year Treasury note rose to 2.50 percent from 2.48 percent late Monday. Long-term interest rates have swung in a wide range since May, a result of traders speculating over when the Federal Reserve will begin pulling back on its bond-buying program.
The rate on the 10-year note, a benchmark for many kinds of loans, was trading at 1.61 percent on May 1. It reached as high as 2.75 percent by the second week of July.