US indices ran on the strength of second quarter earnings as Dow and Nasdaq hit record highs. The Federal Reserve announced today it will keep interest rates between 1% and 1.25%.
The Dow closed +0.45% to 21, 711 a high not seen since July 2014. The S&P 500 nipped up +0.03% to 2,477 and the Nasdaq closed up +0.16% to a record 6,422. Behind the surge fuelling the Dow was rising commodities and Boeing's share price performance.
Other market movers beating expectations included tech company Advanced Micro Devices up +3.97% and AT&T up +4.97%. Akamai Technologies shares were battered closing down -14.66% after missing earnings estimates as did Universal Health with share prices declining -8.14%
The Fed decision provided momentum to gold sending the commodity higher at close while copper prices continued an upswing for the fifth straight day due to increased demand from China. US crude oil storage fell a greater-than-expected 7.2 million barrels giving investors more confidence that OPEC's strategy to cut production is finally paying off. Oil rose 1.7% to $48.70 per barrel.
- Dow 21,711 +0.45%
- S&P 500 2,477 +0.03%
- Nasdaq 6,422 +0.16%
- Russell 2000 1,443 -0.49%
- NYSE Composite 11,968 +0.02%
- Gold 1,267 +0.72%
- Oil WTI $50.9 +1.41%
- 10-Year Treasury Yield 2.28% -0.04%
Boeing share price flies
Boeing's financial performance is no longer grounded. The aerospace company beat earnings expectations, pushing its stock up +9% and also making it the most expensive stock on the price-weighted blue chip index in intraday trading.The company which reported losses of $234 mn a year ago announced impressive second quarter results with earnings per share was $2.55 per share against consensus estimates of $2.32 per share.
Quarterly profit was $1.76 bn. Revenue dropped 8.1% to $22.7 bn which was lower than estimates of $23 bn. The company which is undergoing a programme of cost-cutting and efficiency is now on track to deliver 760 to 765 jetliners and its order book jumped to $482 bn. It kept sales guidance at $90.5 bn to $92.5 bn and projects full year adjusted earnings guidance of $9.80 to $10 a share against prior guidance of $9.20 to $9.40 a share.
The company's share price doubled during trading today on large volume as Boeing's operating cash flow of $5 bn was more than double analysts' expectations. The cash flow is to be returned to shareholders in the form of repurchases and dividends.
Fed keeps rates steady
There were no surprises in the Federal Reserve latest statement after its two-day policy meeting interest rates stayed the same as expected. However, there was hope for details of timing of balance sheet reductions, but the central bank only hinted that it would begin reductions "relatively soon".
The Fed noted the economy was growing moderately with solid gains in employment. Inflation which was a worry declined but the central bank doesn't see it hindering the strength of the economy.
In other economic news, US new-home sales edged up a mere 0.8% in June, showing signs of a gradual recovery in the market segment but much less than projected growth of 1.5%.
Breaking news: Senate rejects a bill in a 45-55 vote to overturn the Affordable Care Act known as Obamacare. The bill would have repealed the health care law without a plan to immediately replace it but provided for a two-year transition period to create new health legislation.