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US FINANCIAL MARKET

U.S. Stocks Fluctuate at the Open amid Earnings Data From Microsoft, Boeing

  • Microsoft was little changed after fourth-quarter revenue beat estimates.
  • Apple rose 2 %.
  • Boeing sank 2.2 % after taking a charge related to a military tanker.
  • PepsiCo climbed 4.1 %. The softdrink maker reported better-than-projected profit and raised its annual forecast after reducing costs.
  • Whirlpool sank 4.2 %. The appliance maker cut its full-year profit forecast after second-quarter results fell short of analysts’ targets.
  • Biogen jumped 12 %. The world’s biggest maker of multiple sclerosis drugs raised its 2014 profit forecast after quarterly results beat forecasts.
  • The S&P 500 rose yesterday after inflation data signaled the Federal Reserve won’t be compelled to raise interest rates in the near future and earnings reports boosted optimism about the economy.
  • Profits at S&P 500 members probably rose 6.2 % in the second quarter, while sales gained 3.3 %.

Boeing Falls Most in Dow as Tanker Cost Stirs Concern

  • The $272 million after-tax expense for the military jet KC-46A overshadowed Boeing’s increase in its full-year profit forecast.
  • Second-quarter earnings also beat analysts’ estimates today, buoyed by faster production that is sending jetliner deliveries to record levels.
  • The company handed over 181 commercial jets to customers last quarter, the most ever.
  • Sales increased 1 % to $22 billion, trailing the $23 billion projected by analysts.
  • Revenue in the commercial business rose 5 % to $14.3 billion and slid 5.4 % to $7.75 billion in Boeing’s defense operations as the U.S. government pares military spending.
  • Net income jumped 52 % to $1.65 billion from $1.09 billion a year earlier.
  • While Boeing still loses money on every Dreamliner it assembles, losses are shrinking as it smoothes out production kinks and takes advantage of supplier discounts that took effect earlier this year.

Apple Posts Second Straight Profit Gain as IPhone Sales Jump

  • Apple said quarterly profit rose 12 % to $7.75 billion, with a jump in iPhone and Mac sales helping to make up for a drop in iPad demand.
  • Apple sold 35.2 million iPhones and 4.4 million Macs, up 13 % and 18 % respectively.
  • That helped boost revenue by 6 % to $37.4 billion.
  • IPad sales fell for the second straight quarter to 13.3 million from 14.6 million a year earlier.
  • Revenue surged 28 % in greater China despite intense competition.
  • The results were mostly in line with analysts’ estimates.
  • Gross margins were better than expected at 39.4 %, up from 36.9 %.
  • Apple is also approaching one of its most critical product rollouts in years.
  • IPhone sales alone totaled $91.3 billion last year, more than the revenue of Google, Facebook, Twitter, LinkedIn and Tesla Motors combined.
  • Apple had $164.5 billion in cash and investments at the end of last quarter, with all but $27 billion held outside the U.S. International sales accounted for 59 % of the company’s revenue last quarter.

Microsoft’s Quarterly Profit Hurt by Nokia Acquisition

  • Microsoft reported a greater-then-expected 17 % jump in revenue but its profit fell 7 %.
  • Net income was $4.61 billion. That compared with $4.96 billion in the year-ago quarter.
  • Overall quarterly revenue rose 17 % to $23.38 billion, above analysts’ average estimate of $23 billion, mainly because of additional sales from Nokia.
  • Microsoft is struggling to cut costs at Nokia after it completed its 5.44 billion euros ($7.33 billion) acquisition of the mobile-phone operations in April.

Norfolk Southern posts better-than-expected profit

  • Norfolk Southern, which joins other U.S. and Canadian railroads in reporting strong quarterly results, said overall volume rose 8 % as shipments of building materials, metals and coal all rose.
  • Coal volumes, which had been declining due to the growing availablity of cheap shale gas, rose 3 % as rising gas prices encouraged utilities to switch back.
  • Volumes in company’s intermodal business rose 11 %.
  • Net income rose about 21 %, to $562 million from $465 million a year earlier.
  • Railway operating revenue rose 8.6 % to $3.04 billion.

Whirlpool cuts outlook as sales outside North America fall

  • The company also cut its full-year earnings outlook, citing expenses from two pending acquisitions.
  • The company posted second-quarter earnings of $179 million, down from $198 million a year earlier.
  • Whirlpool said it had sold $4.7 billion in goods during the quarter, unchanged from a year earlier.

Biogen Raises Forecast After Profit Beats Estimates

  • The world’s biggest maker of multiple sclerosis drugs said that second-quarter net income rose 46 % to $714.5 million from $490.7 million a year earlier.
  • Revenue jumped 40 % to $2.4 billion.
  • Sales of Tecfidera more than tripled to $700 million in the quarter from a year earlier, exceeding the analysts’ average estimate of $555.7 million.

Dow Chemical profit beats due to higher prices, lower costs

  • Dow Chemical reported a better-than-expected quarterly profit as sales rose and margins improved due to higher prices and a tight control on costs.
  • Dow plans to raise as much as $6 billion from non-core asset sales by the end of 2015 and has put its epoxy business and some chlorine and derivatives assets up for sale.
  • Rival DuPont and a number of other chemical makers are facing increasing investor pressure to divest volatile businesses and return more money to shareholders.
  • Revenue rose 2 % to $14.92 billion, slightly above the average analysts’ estimate of $14.82 billion.

Delta Air quarterly profit rises, aided by U.S. demand

  • Second quarter net income was $801 million compared with $685 million a year earlier.
  • Revenue rose 9 % to $10.62 billion, compared with $10.65 billion expected by analysts.

PepsiCo raises profit forecast as North America snack sales rise

  • The company said organic revenue grew 5 % in its global snacks business, partly due to price hikes.
  • Snack volumes in North America grew 2.5 %, but soda volumes fell 2 %, as health-conscious consumers favored juices and health drinks.
  • PepsiCo’s net income fell 2 % to $1.98 billion from $2.01 billion a year earlier.
  • Revenue rose 0.5 % to $16.89 billion.

 

US ECONOMY & POLITICS

U.S. mortgage applications rise in latest week: MBA

  • The Mortgage Bankers Association (MBA) said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.4 % in the week ended July 18.
  • Fixed 30-year mortgage rates averaged 4.33 % in the week, unchanged from the week before.

 

EUROPE & WORLD

TransAsia Airways plane crashes in typhoon-hit Taiwan, killing 47

  • A domestic TransAsia Airways plane crashed on landing on an island off the west coast of typhoon-hit Taiwan.
  • The plane, a 70-seat turboprop ATR 72, crashed near the runway with 54 passengers and four crew on board, the Civil Aeronautics Administration said.

EU Regulators Propose 30% Energy-Savings Target for 2030

  • The EU is currently forecast to boost energy efficiency by 18 % to 19 % by 2020.

Israel Says Offensive to Continue as Kerry Seeks Truce

  • Israel doesn’t plan to stop its Gaza Strip offensive as long as the Palestinian territory’s Hamas rulers continue to pose a threat.
  • Sixteen days of violence have claimed the lives of almost 700 people, including hundreds of Palestinian civilians.
  • Millions of Israeli civilians have been menaced by rocket fire.

Two Ukraine Fighter Jets Downed by Rebels near MH17 Site

  • Rebels downed two Su-25 fighters in the Donetsk region, Defense Ministry spokesman said.
  • They were hit from a missile-defense system over the village of Dmytrivka.
  • The pilots ejected and their whereabouts are unknown, the ministry said on Facebook.

OPEC’s Two-Decade Ride on Global Growth Stalls: Chart of the Day

  • For the past two decades, growth in the global economy spelled higher revenues for the OPEC.
  • Production among OPEC’s 12 members fell 2.5 % to average 31.6 million barrels a day last year.
  • Libya’s output slumped 31 % amid political protests at oilfields and export terminals.
  • Output from Iran, whose exports are subject to international sanctions, fell by 4.4 %.
  • The average price of Brent futures fell 2.7 % to $108.70 a barrel in 2013.

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TODAY in HISTORY

  • William Burt patented a forerunner of the typewriter (1829)
  • Austria and Hungary issued an ultimatum to Serbia after the assassination of Archduke Ferdinand, precipitating World War I (1914)
  • Revolution erupted in Egypt as the military took power in a bloodless coup. The following year the monarchy was abolished and, for the first time since the pharaohs, Egypt was again ruled by Egyptians (1952)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.

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