At this time of year investors are solely focused on earnings, a point that was once again emphasised today as US retail sales data came in below expectations. The report showed that sales in the world’s largest economy had risen by 0.4% one analysts had predicted an increase of double that in the month of June. There was also some correction for the month of May, which saw retail sales lowered to a rise of just 0.5%.
When looking at the days earnings reports the real standout performer was Citigroup, which led their stock price to rally by 2% after their impressive profits smashed analysts expectations. The US bank beat profits per share expectations which were expected to be $1.18. Citigroup announced profits per share of $1.25.
The S&P 500’s stocks have so far reported an increase in profits of 2% for the last quarter, on average. Naturally, this means that investors can, within reason, ignore the majority of economic data released and focus entirely on the earnings that companies are reporting.
James Gaul of Boston Advisors LLC, told Bloomberg. “We had our focus on earnings… Citigroup had a good report this morning and the question is whether earnings will be strong enough to push us higher. That’s where the short-term focus will be.”
The S&P 500 advanced by 0.1% to close at 1682.50, leaving the broad US index on its longest winning streak since the turn of the year. The Dow Jones Industrial Average matched the S&P 500s advance of 0.1% to close at 15,484.26, also a new record. The technology heavy NASDAQ closed with a gain of 7.41 points, or 0.21%, reaching 3607.49, at the bell in New York.
Some rare positive news from China helped drive global stocks higher after the world’s second-largest economy saw its gross domestic product expanded by 7.5% in the three months running up to the end of June. While this was 0.2% short of the expansion seen in the first quarter of 2013, the news was welcomed after a series of negative pieces of data which consistently missed expectations.
Planemaker Boeing rebounded from its disastrous period of trading following the accident in San Francisco, involving one of its 787’s. The incident, which left 2 members of the cabin crew dead and dozens injured, put fear into investors as they began to consider the possibility that the fault which cause the explosion could be linked to the recent battery problems that the planemaker had addressed earlier this year. The plane is currently in at London’s Heathrow airport undergoing investigation, which has now confirmed that the battery was not at fault. This drove the Boeing shares up to $105.66, an advance of 3.7%.