Earnings Aplenty

By Nicholas Jasinski |  Tuesday, April 27 Yawn. Major stock indexes ended today right where they started it. But that wasn’t for a lack of news: Roughly one in 10 S&P 500 companies released first-quarter results today. It was just one of those days when plenty of action under the surface didn’t translate to index-level moves. The S&P 500 closed down just 0.02%, a day after hitting a record high. The  Dow Jones Industrial Average ended virtually unchanged, up just 3.4 points, and the Nasdaq Composite lost 0.3%. With roughly a third of the S&P 500’s market capitalization having reported their results through today, about 83% of companies have topped earnings estimates—by 23% in aggregate—according to data from Credit Suisse strategists. Shares of companies surpassing expectations on revenue and earnings have generally risen after reporting, but expectations coming into first-quarter earnings season were already high, and big beats haven’t always meant big stock reactions. Today's most notable results came from UPS, General Electric, Eli Lilly, 3M, Microsoft, AMD, Pinterest, and Alphabet. Tomorrow brings another packed day of earnings reports, headlined by more tech giants—Apple and Facebook, both after the bell—plus Boeing, eBay, Ford Motor, Qualcomm, Shopify, and more. Monetary policy will also be front of mind, with the Federal Reserve's interest rate-setting committee completing its two-day April meeting.  Futures prices are pricing in practically no chance of an interest-rate change tomorrow, but there will still be plenty for investors to pay attention to. Rate increases might be off the table for now, but the Fed’s $120-billion a month bond-buying program could be withdrawn much sooner. Expect Chairman Jerome Powell to face plenty of questions at his post-meeting press conference about when the Fed may begin tapering those purchases. He’ll also share his views on other topics of the day, including the pace of the economic recovery, the prospect for inflation, and the health of the labor market. Barron's Lisa Beilfuss previewed the event here.

 

DJIA: +0.01% to 33,984.93 S&P 500: -0.02% to 4,186.72 Nasdaq: -0.34% to 14,090.22 The Hot Stock: United Parcel Service +10.4% The Biggest Loser: Cadence Design Systems -8% Best Sector: Energy +1.2% Worst Sector: Utilities -0.8%