Wall Street Digests Earnings While Dow, S&P, and Nasdaq Grab Weekly Wins

Negative post-earnings reactions from BA and CAT capped Dow gains

by Patrick Martin

Published on Jul 26, 2019 at 3:41 PM

This week was all about the earnings. Amid a host of blue-chip quarterly reports, the Dow spent most of the week in a choppy trading pattern. The Nasdaq and S&P 500, on the other hand, both nabbed new record highs and it looks like all three benchmarks will lock up weekly wins. But earnings season wasn't the only talking point on Wall Street this week. The latest U.S.-China trade buzz and the European Central Bank's (ECB) dovish policy action are setting the table for some potentially big fireworks next week.  

Plenty of Post-Earnings Movement On The Dow

As alluded to above, many Dow names exited the earnings confessional in good shape. Coca-Cola's (KO) earnings beat triggered a frenzy among call traders, and industrial technology concern 3M (MMM) reclaimed a key trendline after its excellent quarterly report. And while Disney (DIS) won't report earnings for another two weeks, it got a boost from last week's roaring "The Lion King" debut.

It wasn't all sunshine and rainbows though. The 737 MAX controversy continues to ground Boeing (BA), after the aerospace name posted its largest quarterly loss in a decade. Caterpillar (CAT) also weighed on the Dow after logging its sixth straight negative earnings reaction.

Banner Post-Earnings Reactions for Brand Names

Several household names can posted impressive earnings this week, too. The chip sector breathed a collective sigh of relief when Texas Instruments (TXN) gapped higher after an earnings beat. Starbucks (SBUX) rode outstanding same-store sales numbers to new heights. United Parcel Service (UPS) locked up its best day in years after a blowout report, headlined by increased Next Day Air volume. And a pair of social media stocks continued to clock yearly gains, with Twitter (TWTR) and Snap (SNAP) both soaring on upbeat engagement metrics; the latter's rise a boon to options bulls

Southwest, Xilinx Among Post-Earnings Losers

For every winner though, there's usually a loser. The Boeing drama clouded an otherwise solid earnings beat from Southwest Airlines (LUV). Align Technology (ALGN) and Xilinx (XLNX) both turned in subpar results, with the former picking up bear notes in the process and the latter weighed down by Huawei headwinds. And while International Paper (IP) was a post-earnings winner, the paper company is flashing a bearish signal that could turn the stock sour quickly.

Bank Stocks Brace For Fed, Auto Stocks Under Pressure

Ahead of the Fed meeting next week, several bank stocks are in focus. Morgan Stanley (MS) has run up to a historically bearish trendline, while brokerage firm KBW identified these three bank stocks that could benefit from an interest rate cut. However, the analyst attention in the sector isn't all bullish; just ask Zions Bancorporation (ZION).

Auto stock Ford Motor (F) can be counted as one of the post-earnings losers this week, as the company's restructuring efforts weigh on the shares. Tesla (TSLA) sold off too, while Shanghai-based electric car maker Nio Inc (NIO) saw some unusual options activity.

Apple Earnings On Deck Next Week

Earnings season will continue to ride the wave next week, with Apple (AAPL) set to take the stage on Tuesday. And let's not forget the Fed meeting, where investor sentiment leading up to the event has been mixed. Elsewhere, keep an eye on this gold/silver ratio, as well as these exchange-traded funds (ETF) seeing heavy dosages of inflows. 

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