Stocks fluctuated in early trading but rallied into the close, with the Nasdaq approaching a record high, and housing data topping expectations.
First, the scoreboard:
- Dow: 18,034.37, +84.78, (0.47%)
- S&P 500: 2,108.56, +11.27, (0.54%)
- Nasdaq: 5,037.29, +23.19, (0.46%)
And now, the top stories on Wednesday:
- Existing home sales rose 6.1% in March to an annualized rate of 5.19 million, dwarfing the consensus forecast for a 3.1% rise to an annualized rate of 5.03 million. In a note after the data, Pantheon Macroeconomics chief US economist Ian Shepherdson said the existing home sales report shows that the “post-winter rebound is underway.” Existing home sales tally completed transactions that include single-family homes, townhomes, condominiums, and co-ops.
- Home prices rose 0.7% in February, according to the latest report from the FHFA. Expectations were for the report to show a 0.5% increase, up from +0.3% in January. Prices rose 5.4% compared to the prior year.
- US crude oil inventories rose more than expected last week, according to the Energy Information Administration’s weekly data release. Commercial crude inventories rose by 5.3 million barrels from the previous period, higher than the consensus forecast for a build of 3.2 million barrels. This brings the total to 489 million barrels, and keeps inventories at the most for this time of year in at least 80 years.
- McDonald’s reported disappointing first quarter earnings. It posted earnings per share excluding charges of $US1.01, missing expectations for $US1.06, as global same-store sales fell 2.3%, which the company said reflected “negative guest traffic in all major segments.” But Q1 revenues of $US5.96 beat forecasts by about $US10 million, and were 11% lower year-over-year. Same-store sales fell by 2.6% in the US and by 0.6% in Europe. “The most relevant part of MCD’s 1Q earnings report issued this morning is disclosure that MCD plans to present initial details of its turnaround plan on Monday, May 4th,” according to analysts at Bank of America Merrill Lynch.
- Boeing posted earnings per share of $US1.97, beating analysts’ estimates of $US1.84. Revenue came in at $US22.1 billion, below the estimate for $US22.5 billion. It recorded higher expenses for its flagship 787 Dreamliner jet. The company reaffirmed its outlook for the year and continues to see revenues between $US94.5 and $US96.5 billion.
- Coca-Cola results were better than expected, amid an “uncertain and volatile macroeconomic environment.” It reported Q1 revenue of $US10.7 billion, stronger than the $US10.6 billion expected by analysts. This was boosted by 8% organic revenue growth and a 1% increase in unit case volume. It posted earnings of $US0.48 per share, higher than the $US0.42 expected.
- Shares of MasterCard and Visa rallied by more than 5% after the Chinese government announced it will open up the bank-card clearing market in June. Right now, they both piggyback and pay fees to China UnionPay, which has a monopoly. But from June 1, foreign companies will be able to apply for licenses for bank card clearing businesses in China, Reuters reported. Visa touched an all-time high of $US69.98 a share.
- Chipotle shares fell by more than 7% a day after the company reported disappointing sales. Year-to-date, shares are down 6%. In the first quarter, same-store sales rose 10.4%, missing expectations for growth of 11.8%. CEO Steve Ells said there would continue to be a shortage of pork for its carnitas option, likely until the fourth quarter; the company cannot find enough suppliers that meet its standards.
- Twitter has ended pre-planned stock sales from its executives, according to Fortune. The use of 10b5-1 stock sale plans, which allows executives to pre-plan stock sales at regular intervals, has been heavily criticised by CNBC’s Jim Cramer and others. It’s unclear if the company ended 10b5-1 plans for the company or simply didn’t renew them, Fortune reported.