Apple and Boeing Earnings, Plus Oil Drag, Combine to Dent Stocks

U.S. stocks tipped lower early Wednesday as Apple, Inc. AAPL and Boeing Co. BA dropped post earnings, oil dipped back under $31 a barrel, and the Federal Reserve’s interest rate meeting conclusion looms.

The U.S. stock trading day follows a mild rebound on Tuesday (figure 1) and mixed Wednesday trading around the globe. China’s Shanghai Composite Index finished down 0.5% at 2,735.56. That was its lowest close since December 2014. It dropped as much as 4% earlier in the session. Japan’s Nikkei Stock Average rose 2.7%. Europe’s leading stock averages are largely lower so far in their session.

Investors are waiting for the latest policy decision from the Fed, due at 2 p.m. Eastern. Few on Wall Street expect the Fed to follow up December’s rate hike with a move this week. But the group’s statement could carry plenty of punch for markets. After all, since the central bank lifted rates in December for the first time in almost a decade, the economic and market landscape has been redrawn. Oil prices sit at a 12-year low, more evidence of Chinese economic weakness has emerged, and the stock market kicked off its worst start to a trading year ever.

The CME Group’s FedWatch Tool suggests futures traders have priced in a rather slim 14.3% possibility of a rate hike today. Stay tuned for more from the Fed.

Boeing’s Guidance Stings. Dow-component Boeing (BA) is sharply lower after the aerospace giant issued 2016 guidance below Wall Street’s expectations. Boeing said it expects to post adjusted earnings between $8.15 and $8.35 in 2016, while analysts polled by Thomson Reuters had forecast $9.43 a share in earnings. The company forecast revenue between $93 billion and $95 billion, while analysts had called for $97.2 billion in revenue. For the current quarter ending March, Apple said it sees revenue of $50 billion to $53 billion, well below estimated revenue of $55.47 billion from analysts polled by Thomson Reuters.

Earnings Round-Up: Biogen Inc BIIB stock gains after profit and sales beat the Street view; Tupperware Brands Corporation TUP earnings fell, as strong dollar blamed; United Technologies Corporation UTX missed the Street view with sales; AT&T Inc T came up short with latest revenue figure. Post-close earnings releases include: Facebook Inc FB, eBay Inc EBAY, Qualcomm, Inc. QCOM, and others.


Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.

Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2016 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission.

Market News and Data brought to you by Benzinga APIs
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsNews
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!