Financial Review
DOW+ 187 = 17,005
SPX + 23 = 1985
NAS + 78 = 4564
10 YR YLD + .03 = 2.29%
OIL + .38 = 81.38
GOLD + 2.90 = 1229.00
SILV + .09 = 17.31
Today, we’ll start with a few earnings reports then move to economic news.
After the close Facebook reported a profit of $806 million, or 30 cents a share, up from $425 million, or 17 cents a share, a year earlier. Excluding share-based compensation and other items, earnings rose to 43 cents a share from 27 cents. Revenue increased 59% to $3.2 billion. Earnings were up about 90%; revenue up about 60%. Shares were just a little lower in after-hours trade.
Dupont reported operating earnings per share of $0.54 were up 20 percent from $0.45 per share last year, in-line with estimates.
Pfizer reports a third-quarter profit of $2.67 billion, or 42 cents a share, up from $2.59 billion, or 39 cents a share. Revenue slipped 2% to $12.36 billion.
Freeport-McMoRan reported earnings of 53 cents per share for third-quarter 2014, reflecting a decline of 32.9% from the year-ago earnings of 79 cents. Profit declined 32.8% year over year to $552 million, hurt by lower pricing of copper and gold.
The S&P/Case-Shiller index of property values increased 5.6 percent from August 2013. Prices are still going up, but at a slower pace. Home prices in the 20-city index adjusted for seasonal variations decreased 0.1 percent in August from the prior month. Unadjusted prices rose 0.2 percent.
In August, durable goods orders dropped 18.3%. Durable goods orders have been volatile in recent months because of big swings in aircraft orders. The thinking was that there would be a modest rebound as businesses increased spending, and aircraft orders would rebound. Not exactly. Durable goods orders for September dropped 1.3%; excluding transportation equipment bookings declined 0.2%. Cars and trucks sold at a 16.3 million annualized rate last month, capping the best quarter since 2006. There was a 2.8% drop in demand for machinery, the biggest decline since February 2013, as bookings for computers and electronic equipment fell 2.5%. Businesses just aren’t investing in their business.
And while businesses are pessimistic, consumers are optimistic. The Conference Board’s consumer sentiment index climbed to 94.5, the strongest reading since October, 2007; up from 89 in September. Steady hiring and fewer layoffs over the past 12 months have pushed unemployment lower; even if they aren’t good paying jobs, they are still jobs; and most people think they will get a raise eventually. Americans are also feeling better because it doesn’t hurt as much to visit the gas pump. Average gas prices have dropped 31 cents in the past month to a nationwide average of $3.03. Incredibly, we feel good about gas at $3 a gallon.
