Earnings Reports Lead to Volatile Week for the Market

Most companies released their earnings reports this week, leading to dramatic moves in the market. Although there were big localized spikes and losses, the trend toward falling oil and gas prices continued to dominate the energy sector. Consumer durable goods picked up the pace this quarter, leading to some surprising profits for home builders.

All in all, it was a volatile finish to a month that has seen more ups and downs in the marketplace than usual.

In general, the trends favored retailers and manufacturers aimed at domestic consumers, while industrial products and services continued to struggle.

 The Dow's Ups and Downs The Dow started flat on Monday before taking a big dip on Tuesday that it never fully recovered from. Over 5 days, the market fell 503.16 points, or 2.87%, beginning the week at 17,668.11 and ending it at 17,164.95. NASDAQ and the S&P 500 mirrored the market as a whole, with the NASDAQ down 2.58% and the S&P 500 falling 2.77% over 5 days.

A Poor Week for Tech Stocks were largely down across the tech sector this week. Yahoo! (YAH) fell -10.13% to 43.99 per share after an ugly and sudden breakup with overseas marketplace Alibaba (BABA), which was also down -13.61% on the news. Google (GOOG) missed their earnings forecasts by a small margin, although investors have come to expect that from the company, but still managed to mitigate their losses this week with a small -1.01% decrease in stock price to finish at 534.52 per share. In contrast, online retailer Amazon had a good week, bolstered by a strong Friday surge, for a 13.49% increase over 5 days to end at 354.53.

Consumer Durable Goods Show Promise Traditional durable goods manufacturers like General Motors (GM) and Ford (F) had a rough week, losing -3.35% and -1.34% respectively, despite continued low fuel prices and increasing consumer confidence. However, nontraditional companies like video game publisher Ubisoft (UBSFF) saw big increases, up 10.60% over the course of the week. The housing market saw slow but steady improvement, pushing up companies like homebuilder D.R. Horton Inc (DHI), which saw 5-day gains of 6.15%. Illinois toolmaker Graco (GGG) dipped -7.84% this week, hinting that while the consumer goods sector is recovering, industrial sales are still in a slump.

Apple Sets A Record One of the biggest success stories of the week was Apple's (AAPL) unexpectedly high earning this quarter, setting a company record for net profits upon raking in $18bn on the back of strong iPhone 6 sales amid widespread Chinese adoption. The software and device giant saw a huge spike in share price on the news, soaring 3.70% over the course of the week to end at 117.16.

Oil and Gas Prices Taking A Toll On Energy Sector As crude oil prices continue to struggle to find their bottom on news that supply won't be cut anytime soon, the industries that rely on $80+ per barrel in order to post strong profits are all struggling. Energy producer Diamond Offshore Drilling (DO) recovered slightly late in the week, but was still down -1.81% over 5 days. Two businesses that should be happy about low fuel prices, UPS (UPS) and Fedex (FDX) were both down this week, falling -3.97% and -3.92% respectively.

Currency Making Slight Gains The USD gained ground versus the British Pound, and Euro this week, fell against the Mexican Peso and Australian Dollar, and held relatively steady versus the Japanese Yen and Chinese Yuan. After a midday spike on Monday, the price of Bitcoins fell 2.77% this week, ending at $225.64 down from a high of 268.33 per coin.

Commodities Down All Week With the exception of gold, which posted a solid week and closed at $1,280 per troy ounce, most commodities were down over 5 days. Crude oil and natural gas received the most attention, but corn, wheat, coffee, cotton, sugar, and beef all either remained flat or dipped slightly. Agriculture was hit nearly as hard as energy, and the big loser was soybean futures, which dipped from Monday's high of $980.25 per metric ton to $961 at the end of trading on Friday.

Published on Jan 30, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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