Benchmark Indexes Head for Weekly Losses On Weakening Earnings Outlook

Barry Adams
21 Apr, 2023
New York City

Stocks on Wall Street rested as investors mulled over a week of earnings releases and economic data. 

Benchmark indexes are set to close down for the week but still up for the year as more data suggest that the U.S. economy is heading for a contraction. 

Market averages are little changed after a week of earnings where most companies are reporting earnings that met lowered expectations. 

About 300 companies have released earnings so far but investor expectations may have to be revised lower in the event the economy slows down or even heads into a milder recession. 

Jobless claims inched slightly higher, indicating labor market tightness but Conference Board's index of leading indicators declined suggesting that the economy is heading into a contraction.  

Investors have still not lowered earnings estimates in the event of an economic slowdown or even a mild recession, rendering broader averages vulnerable to more declines.   

 

Indexes & Yields 

The S&P 500 index edged up 1.24 points to 4,132.55 and the Nasdaq Composite index inched lower 2.43 points to 12,054.76.  

The yield on 2-year Treasury notes inched lower to 4.11%, 10-year Treasury notes edged down to 3.50% and 30-year Treasury bonds traded at 3.73%.   

Crude oil edged higher 72 cents to $78.11 a barrel and natural gas held at $2.24 a thermal unit.  

 

Stock Movers 

Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results. 

P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume. 

Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.  

The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line. 

CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results. 

Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago. 

PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook. 

Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago. 

The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.