So far this week it appears expectations are not matching up with results, as once again a series of earnings “disappointments” sent stocks into negative territory for the day. Apple, Microsoft and Yahoo led the tech names that failed to wow, while Boeing seems to be the only industrial name that is pleasing market participants. In addition to earnings disappointments, the continued slump in oil prices is weighing on energy shares (the commodity complex in general continues to decline).
By the close, the Dow Jones Industrial Average was down 68 points to finish the day at 17,851. The S&P 500 was down 5 points to close at 2114. Gold was down once again, as the precious metal was down $11 to trade at $1092 per ounce. The aforementioned oil was down $1.75 to trade at $49.11 per barrel WTI.
As we often talk about, the earnings themselves are important, but how the stocks react to the earnings gives us a good indication on investor temperament, and just how aggressively stocks were priced coming into the earnings season. The banks seemed to have been underpriced, while old tech (with the exception of Google) seems to have been overpriced. On the economic front existing home sales were strong and prices continue to appreciate, as housing continues to be a bright spot in a somewhat lackluster economic backdrop. Let’s see how the rest of the week goes.
Have a nice evening everyone.