US Markets March Ahead with Strong Earnings Results

Edited by Vani Rao

S&P 500 surges to record high following bullish trends

On Monday, July 21, 2014, the US equity markets closed the session on a negative note as the S&P 500 lost 0.23%, ending at 1,973.63. Investors remained cautious about Israel’s ground invasion in Gaza and the possible tougher sanctions against Russia, which affected market movements during the day. The tech-heavy Nasdaq Composite Index finished at 4,424.70, falling 0.17%, and the Dow Jones Industrial Average ended the day at 17,051.73, down 0.28%. All the sectors ended the session in the red, except Energy, which gained 0.15%.

However, on Tuesday, July 22, 2014, the US markets kicked off the day on a positive note following the earnings releases of major companies. Tech majors iRobot Corp. (NASDAQ: IRBT) and Apple Inc. (NASDAQ: AAPL) reported their earnings on the same day; which helped the Nasdaq gain 0.71%, ending the session at 4,456.02. McDonald’s Corp. (NYSE: MCD) reported better-than-expected results, which drove the S&P 500 up 0.50%, to close the day at 1,983.53. Further, Dow component Microsoft Corp. (NASDAQ: MSFT) announced its earnings and met FY2014 expectations; which pushed the Dow Jones Industrial Average 0.36% higher to 17,113.54.

On Wednesday, July 23, 2014, the US equity markets continued with the positive momentum, opening higher and closing the session mostly on a higher note. The S&P 500 ended the day up 0.18% at a record of 1,987.01 following Apple’s bullish results. Majority of the S&P 500 components reported strong earnings during the day.

The US markets are witnessing an uptrend and are likely to continue with this trend in the interim period. However, we might see a reversal when the Federal Reserve fully withdraws its asset purchase program, also known as quantitative easing, in October this year.

On the other hand, the earnings season is seeing positive results for many companies and this trend is expected to continue in the days ahead. In addition, NASDAQ component Facebook Inc. (NASDAQ: FB) reported its Q2 results on Wednesday, after the markets closed. This helped the NASDAQ Composite to end at 4,473.70, up 0.40%. Facebook reported better-than-expected results spurred by its fast-growing mobile advertising business, which helped its revenue to surge 61% during Q2. On the other hand, the Dow Jones Industrial Average fell 0.16%, finishing the day at 17,086.63. The Health Care and Energy sectors gained 0.81% and 0.56%, respectively, to trigger advances in the broader markets.

Source: Bloomberg
Source: Bloomberg


The shares of the below-mentioned companies were among the top gainers on Wednesday:

  • Shares of Puma Biotechnology Inc. (NYSE: PBYI), a development stage biopharmaceutical company that acquires and develops innovative products for the treatment of various forms of cancer, rallied 295.44%, closing the day at $233.43. On July 22, 2014, the company announced top line results from the Phase III clinical trials of its investigational drug for the extended adjuvant treatment of breast cancer.
  • A world leader in 3G, 4G, and next-generation wireless technologies, NQ Mobile Inc. (NYSE: NQ) stock rose 21.97%, ending the day at $6.55.
  • Shares of Doral Financial Corp. (NYSE: DRL) gained 21.06%, to finish the day at $5.69. Doral Financial Corp. is a bank holding company engaged in banking, mortgage banking, and insurance agency activities through its wholly owned subsidiary Doral Bank.


Some stocks triggered heavy losses for the US equity markets during the trading session on Wednesday. Shares in the following companies witnessed a broad sell-off:

  • Unisys Corp. (NYSE: UIS), a worldwide information technology company, was among the worst-performing stocks on Wednesday. The stock plummeted 20.86% to close at $20.07. On July 22, 2014, Unisys Corp. reported a net loss of $12.1 million, or a loss of $0.24 per diluted share, for Q2 FY2014.
  • Shares in Mastech Holdings Inc. (AMEX: MHH), which provides IT staffing services, saw its shares plunge 20.62%, finishing the day at $12.78. On Wednesday, the company reported its Q2 FY2014 results. For Q2, Mastech reported net income of $893,000, or $0.20 per diluted share from continuing operations, as compared to $765,000, or $0.18 per diluted share, during the same period of last year.
  • Medical Transcription Billing Corp. (NASDAQ: MTBC), a healthcare information technology company, witnessed a fall of 14.40% in its shares, closing at $4.28. On July 22, 2014, the company announced the pricing of its initial public offering of 4.08 million shares of common stock at $5.00 per share.

Global Market Snapshot

The global markets gained steady ground on Wednesday as the focus turned towards US corporate earnings and tensions between Russia and the West over the downing of a Malaysian jetliner in Ukraine eased.

The FTSE 100 Index finished the session 0.04% higher at 6,798.15, on Wednesday, July 23, 2014, as indicated in the graph below.

Source: Bloomberg
Source: Bloomberg

On the other hand, on Thursday, July 24, 2014, the Asian stocks traded near six year high with the major benchmark indices swinging between gains and losses. However, Japan’s Nikkei 225 Index edged 0.29% lower, finishing Thursday’s session at 15,284.42. The index fell 0.10% on Wednesday closing at 15,328.56.

Source: Bloomberg
Source: Bloomberg

Meanwhile, the Hong Kong Hang Seng Index was trading up 0.61% at the time of reporting. The Index advanced 0.80% on Wednesday’s finishing the session at 23,971.87.

Source: Bloomberg
Source: Bloomberg



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