[Chart courtesy of MarketWatch.com]
1. Moving the Markets
Equities got a major boost today from a bunch of strong earnings reports from companies such as Caterpillar (CAT) and General Motors (GM). The S&P 500 rose 1.24%, the Nasdaq gained 1.6% and the Dow ended up 1.32%.
Airline stocks fared well today as both Southwest (LUV) and United Continental (UAL) came out with earnings reports that topped analyst expectations. With 177 of the S&P 500 companies having posted third-quarter results, 69.5% have beaten expectations, better than the 67% beat rate over the past four quarters, and higher than the 20-year average of 63%.
As a counter to the upbeat earnings trend, Amazon (AMZN) had warned that it would lose bundles of cash in the third quarter, and it didn’t disappoint. The company said it had a net loss of $437 million for the quarter, compared with $41 million in the year-ago quarter. Shares of Amazon are down more than 23% on the year. Obviously the Fire phone was a flop; however, the company is bullish on their Kindle tablets. The company has a new line of tablets that have been better received, and it is looking to make a bigger splash with consumers by opening pop-up stores in San Francisco and Sacramento.
More good news came from overseas as analysts noted that the economy in Europe may be looking up. Europe benchmarks started the day in the red and closed higher. The DAX of Germany gained 1.2%. Major Asia indexes all lost, the Nikkei of Japan off 0.4%.
9 of our 10 ETFs in the Spotlight gained while one lost. Our latest Buy signal, effective yesterday, allowed us to participate in today’s rebound, which affected our Trend Tracking Indexes (TTIs) positively, as you can see in section 3 below.