Stocks today wrapped up a solid week of gains on a rather lackluster note, thanks to weaker-than-expected earnings from a pair of high-profile tech companies. Specifically, Amazon.com (AMZN) was one of the top laggards of the day after confessing to soft second-quarter revenue and offering tepid third-quarter guidance. Meanwhile, Microsoft Corporation (MSFT) came under heavy selling pressure after its fiscal fourth-quarter earnings fell short of analysts' consensus expectations. While most stocks shrugged off early losses to end modestly higher, the tech sector sagged as investors panned the day's disappointing earnings. As a result, the Nasdaq Composite effectively snapped its 12-day winning streak, ending firmly in the red.
The Dow Jones Industrial Average (DJIA 9,093.24) ended a back-and-forth session on a high note, collecting a final gain of 24 points, or 0.3%. Eighteen of the Dow's 30 components finished in the black, led by pharmaceutical firms Merck (MRK), Johnson & Johnson (JNJ), and Pfizer (PFE). Microsoft blazed the path lower for the 12 declining blue chips, shedding 8.3% by the close. For the week, the Dow rose nearly 4%, and notched its first weekly close above 9,000 since Jan. 2.
The S&P 500 Index (SPX 979.26) also ended modestly higher, adding roughly 3 points, or 0.3%. The SPX ended the week up 4.1%, and managed a Friday finish above 950 for the first time since Oct. 31, 2008. Meanwhile, the Nasdaq Composite (COMP 1,965.96) settled for a daily loss of 7.6 points, or 0.4%. However, the COMP still raked in the week's healthiest percentage gain, adding 4.2%, and it closed the week north of its 80-week moving average for the first time since May 30, 2008.
Turning to equities in focus, China Sunergy (CSUN) buoyed the solar sector with a stronger-than-expected forecast ... Potash Corp. of Saskatchewan (POT) attracted the attention of call writers after earnings ... Todd Salamone broke down the nuts and bolts of pairs trading in the new issue of SENTIMENT magazine ... An uptick in call volume suggested that sentiment is starting to shift on Qualcomm (QCOM) ... and today's Quote of the Day comes from Bob Lutz, the vice chairman of General Motors (GMGMQ). When asked how the automaker could fix its woefully low profile among U.S. consumers on the East and West Coasts, Lutz seemed a bit frustrated:
"If I knew, I'd have already done something."
But these weren't the only headlines hitting the Street today. Click on the links below for our Daily Option Blog coverage of:
And, in case you missed it, Jocelynn Drake turned her Options Spotlight on the shares of Expedia Inc. (EXPE). Click here to watch the video.
For today's activity in crude oil, gold futures, options, and more, turn to page 2.
Crude futures climbed today, boosted by a down day for the U.S. dollar. In fact, black gold notched its highest daily close since July 1, with traders taking their cues from the stock market's relative resilience and the threat of a production decline from the Organization of Petroleum Exporting Countries (OPEC). Oil Movements reported that seaborne oil exports are expected to fall by 1.7% during the four weeks ending Aug. 8, which could help to whittle down currently hefty U.S. inventories. Against this backdrop, crude oil for September delivery added 91 cents, or 1.3%, to settle at $68.05 per barrel. On a weekly basis, the front-month contract rose 7.1%.
Gold futures also collected a gain for the week, although the malleable metal suffered a negative session amid weakness in the U.S. dollar. The euro trekked higher today after Germany's Ifo business climate index rose to 87.3 in July, revealing a stronger-than-expected improvement. The Markit euro-zone composite purchasing managers' index also topped consensus expectations, effectively bolstering the European Union's currency. With the greenback's slide diminishing gold's allure as an inflationary hedge, August-dated futures shed $1.70, or 0.2%, to end at $953.10 per ounce. For the week, gold added 1.7%.
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