Stock Market Today: Stocks Waver Amid a Flurry of Quarterly Reports
Mixed earnings and hawkish comments from Fed officials made for something of a seesaw session on Tuesday.
Equity markets had a hard time making up their minds Tuesday amid a heavy day of earnings reports from big banks and other blue chip stocks. Hawkish commentary from two Fed officials also caused markets to waver.
Dow stocks Johnson & Johnson (JNJ) and Goldman Sachs (GS) posted first-quarter results before the opening bell, as did Bank of America (BAC). Streaming media giant Netflix (NFLX) leads the earnings calendar with a report after the close.
Shares in J&J sold off despite the company easily topping Wall Street estimates on both the top and bottom lines. The healthcare giant also raised its earnings per share (EPS) forecast for the remainder of the year, and said that its intended separation of its consumer health business remains on schedule. But concerns over the company's litigation risk stemming from allegations that talc used in its iconic baby powder is carcinogenic weighed on JNJ stock.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In the financial sector, Goldman Sachs' earnings exceeded analysts' consensus estimate, but revenue fell short. Disappointing results from fixed-income trading were mostly to blame, as the division was hurt by turmoil in the bond market. A slump in mergers and acquisitions and initial public offerings (IPOs) also weighed on results.
Bank of America had no such issues, with earnings and revenue coming in better than Street forecasts. The money center bank was aided by a 25% jump in net interest income, or the difference between what banks pay for deposits and charge for loans.
"Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments," BofA CEO Brian Moynihan said in a statement.
Big banks have been less affected by the crisis roiling regional banks and have even enjoyed an influx of deposits from their smaller peers. But, as Goldman Sachs' results showed, a reliance on fees from investment banking activities can make them vulnerable in other ways.
"Bearish sentiment remains high, but earnings have been generally better than expected," said Louis Navellier, chairman and founder of Navellier & Associates. "The [investor fear gauge] VIX is at a low 17, and stocks remain near the highs for the year."
Mixed earnings and hawkish commentary from two Fed officials caused markets to struggle for direction throughout the session. Federal Reserve Bank of St. Louis President James Bullard remarked that he wants to combat inflation with another interest rate hike at the next Fed meeting. Fed Bank of Atlanta President Raphael Bostic likewise said Tuesday that he favors raising interest rates one more time.
At the close, the major benchmarks were essentially unchanged. The blue chip Dow Jones Industrial Average ticked down 0.03% to close at 33,976, while the broader S&P 500 added 0.08% to finish at 4,154. The tech-heavy the Nasdaq Composite slipped 0.04% to settle at 12,153.
The best blue chip dividend stocks
As rollicking as Tuesday's session may have been, the best blue chip dividend stocks usually prove their worth over the long haul. Their fortress balance sheets, reliable dividends, and ability to weather bouts of market volatility make them ideal buy-and-hold names.
The biggest blue chips also have massive market values and liquidity, which helps explain why so many are hedge funds' top picks. And, of course, the best dividend stocks for reliable dividend growth are littered with blue chip names.
That said, hardly every blue chip or Dow stock is Buy-rated. But it just so happens that a market-cap-weighted index of analysts' top-rated Dow dividend stocks has been beating the broader market handily over the past year or so.
Given that record, these blue chip dividend stocks, including Microsoft (MSFT), Coca-Cola (KO), and UnitedHealth Group (UNH), might be worth a closer look.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
Don't Leave Your Heirs an IRA Tax Bomb
Your traditional IRA has served you well, but when your heirs inherit it, watch out. Consider some of these strategies to minimize their tax burdens.
By Kelsey M. Simasko, Esq. Published
-
Five Ways to Maximize Your End-of-Year Philanthropy
To do the most good, pick the right charity, be smart about how you donate and consider giving something just as valuable as money: your time.
By Emily Glassman Published
-
Stock Market Today: Nasdaq Jumps Ahead of Nvidia Earnings
It was a mostly positive start to a new week of pricing in more Donald Trump.
By David Dittman Published
-
Stock Market Today: Stocks Slip After Powell Talks Rate Cuts
The main indexes closed lower Thursday after Fed Chair Powell said there's no rush to cut rates.
By Karee Venema Published
-
Stock Market Today: S&P 500 Tops 6K as Election Rally Endures
The S&P 500 closed just below the 6,000 mark on Monday.
By David Dittman Published
-
Why Is Warren Buffett Selling So Much Stock?
Berkshire Hathaway is dumping equities, hoarding cash and making market participants nervous.
By Dan Burrows Published
-
Fed Cuts Rates Again: What the Experts Are Saying
Federal Reserve The central bank continued to ease, but a new administration in Washington clouds the outlook for future policy moves.
By Dan Burrows Published
-
Stock Market Today: Dow Jumps 1,500 Points on Election Outcome
The removal of election uncertainty unleashed a powerful rally in equity markets.
By Dan Burrows Published
-
Should You Buy Tesla Stock After Trump's Election Win?
Shares in Tesla popped on the outcome of the presidential election. Is it time to buy?
By Dan Burrows Published
-
Stocks Rally on Election Day as Markets Brace for Volatility
All three major indexes opened higher as voters chose the 47th President of the United States.
By Dan Burrows Published