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Benchmarks closed at record levels on Wednesday, boosted by strong earnings results and the Fed’s decision not to raise rates at the end of its two-day meeting. Splendid second quarter earnings from Boeing helped close the Dow at a record high. Furthermore, AT&T performed better than expected and surpassed the Zacks Consensus Estimate. Riding on the overall success of telecom stock, the S&P 500 also closed at a record level. The tech rally continued to help the Nasdaq end in the green.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJIA) rose 0.5% or 97.58 points, closing at 21,711.01. The S&P 500 Index (INX) increased by a meager 0.70 points to close at 2,477.83. This apart, the Nasdaq Composite Index (IXIC) closed 6,422.75, adding 10.57 points and rising by 0.2%. A total of around 6.6 billion shares were traded on Monday, above the last 20-session average of 6.1 billion shares. Advancing issues outnumbered decliners on the NYSE by a 1.02-to-1ratio; on Nasdaq, a 1.07-to-1 ratio favored advancing issues.
Boeing and AT&T Post Upbeat Earnings in Q2
Shares of Boeing (BA - Free Report) soared to an all-time high on Wednesday morning after the company posted its second-quarter financial results. Boeing reported earnings of $2.55 per share, beating the Zacks Consensus Estimate of $2.32 per share. Shares surged nearly 10% to hit an all time high, helping the Dow to post a record finish. Though total sales were less than expected, the aerospace giant generated strong cash flows during the quarter due to high demand for Boeing's 787 Dreamliner. (Read More: Boeing (BA - Free Report) Stock Flies to All-Time High After Q2 Earnings)
U.S. telecom major AT&T Inc. (T - Free Report) reported impressive financial results for second quarter of 2017. The company’s top and bottom lines each outpaced their Zacks Consensus Estimates. However, quarterly total revenue dropped 1.68% year over year to $39,837 million, primarily due to declines in legacy wireline services and consumer mobility. However, revenues were above the Zacks Consensus Estimate of $39,799 million. As a result, the Utilities Sector SPDR moved up nearly 1.0% and the S&P 500 closed at a record level. (Read More: AT&T (T - Free Report) Tops Q2 Earnings & Revenues, Gains Subscribers)
Tech Rally and Positive Expectations from Earnings
Meanwhile, the tech rally continued following positive expectations regarding earnings of tech behemoths like Amazon (AMZN - Free Report) and Facebook which are scheduled to report later this week. This helped the Nasdaq Composite close at a record level of 6,422.75.
Fed Leaves Rate Unchanged, Warns on Inflation
The Fed opted to leave interest rates unchanged at the end of its two-day policy meeting on Wednesday. The Fed maintained the benchmark lending rate and hinted that it will start trimming its $4.5 trillion balance sheet in "relatively soon". Market watchers believe that such language indicates that the Fed will begin the process of unwinding in September.
Additionally, the central bank’s statement dropped the word “somewhat” from its June statement instead choosing to directly state that inflation continued to remain "below 2%". This only represents a slight shift but is significant because it acknowledges a negative view on one of the Fed’s key objectives. The Fed’s recognition of low inflation levels bodes well for rate-sensitive sectors. Consequently, the Utilities and Real Estate Select SPDR moved up nearly 1.0% and 0.8% respectively as the rate-sensitive sectors seized on this opportunity.
Mississauga, Canada-based IMAX Corporation (IMAX - Free Report) reported mixed results in the second quarter of 2017. (Read More)
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
See More Zacks Research for These Tickers
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Stock Market News for July 27, 2017
Benchmarks closed at record levels on Wednesday, boosted by strong earnings results and the Fed’s decision not to raise rates at the end of its two-day meeting. Splendid second quarter earnings from Boeing helped close the Dow at a record high. Furthermore, AT&T performed better than expected and surpassed the Zacks Consensus Estimate. Riding on the overall success of telecom stock, the S&P 500 also closed at a record level. The tech rally continued to help the Nasdaq end in the green.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJIA) rose 0.5% or 97.58 points, closing at 21,711.01. The S&P 500 Index (INX) increased by a meager 0.70 points to close at 2,477.83. This apart, the Nasdaq Composite Index (IXIC) closed 6,422.75, adding 10.57 points and rising by 0.2%. A total of around 6.6 billion shares were traded on Monday, above the last 20-session average of 6.1 billion shares. Advancing issues outnumbered decliners on the NYSE by a 1.02-to-1ratio; on Nasdaq, a 1.07-to-1 ratio favored advancing issues.
Boeing and AT&T Post Upbeat Earnings in Q2
Shares of Boeing (BA - Free Report) soared to an all-time high on Wednesday morning after the company posted its second-quarter financial results. Boeing reported earnings of $2.55 per share, beating the Zacks Consensus Estimate of $2.32 per share. Shares surged nearly 10% to hit an all time high, helping the Dow to post a record finish. Though total sales were less than expected, the aerospace giant generated strong cash flows during the quarter due to high demand for Boeing's 787 Dreamliner. (Read More: Boeing (BA - Free Report) Stock Flies to All-Time High After Q2 Earnings)
U.S. telecom major AT&T Inc. (T - Free Report) reported impressive financial results for second quarter of 2017. The company’s top and bottom lines each outpaced their Zacks Consensus Estimates. However, quarterly total revenue dropped 1.68% year over year to $39,837 million, primarily due to declines in legacy wireline services and consumer mobility. However, revenues were above the Zacks Consensus Estimate of $39,799 million. As a result, the Utilities Sector SPDR moved up nearly 1.0% and the S&P 500 closed at a record level. (Read More: AT&T (T - Free Report) Tops Q2 Earnings & Revenues, Gains Subscribers)
Tech Rally and Positive Expectations from Earnings
Meanwhile, the tech rally continued following positive expectations regarding earnings of tech behemoths like Amazon (AMZN - Free Report) and Facebook which are scheduled to report later this week. This helped the Nasdaq Composite close at a record level of 6,422.75.
Fed Leaves Rate Unchanged, Warns on Inflation
The Fed opted to leave interest rates unchanged at the end of its two-day policy meeting on Wednesday. The Fed maintained the benchmark lending rate and hinted that it will start trimming its $4.5 trillion balance sheet in "relatively soon". Market watchers believe that such language indicates that the Fed will begin the process of unwinding in September.
Additionally, the central bank’s statement dropped the word “somewhat” from its June statement instead choosing to directly state that inflation continued to remain "below 2%". This only represents a slight shift but is significant because it acknowledges a negative view on one of the Fed’s key objectives. The Fed’s recognition of low inflation levels bodes well for rate-sensitive sectors. Consequently, the Utilities and Real Estate Select SPDR moved up nearly 1.0% and 0.8% respectively as the rate-sensitive sectors seized on this opportunity.
Stocks That Made Headlines
Whirlpool Falls on Q2 Earnings & Sales Miss, Cuts View
Whirlpool Corporation (WHR - Free Report) posted second-quarter 2017 results, wherein both earnings and sales lagged estimates. (Read More)
IMAX Corp Q2 Earnings Decline Y/Y, Revenues
Mississauga, Canada-based IMAX Corporation (IMAX - Free Report) reported mixed results in the second quarter of 2017. (Read More)
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>