Draghi Remarks Lift Dow

The Dow Jones Industrial Average (INDEX: ^DJI  ) looks to be headed north at open today on comments from European Central Bank head Mario Draghi, who reassured investors that the ECB would do whatever is necessary to prop up the eurozone. European markets soared on the news as major indexes across the Atlantic climbed 1% or more. Asian stocks were also up overnight.

Earnings season peaks today, with Dow components 3M (NYSE: MMM  ) , United Technologies (NYSE: UTX  ) , and ExxonMobil (NYSE: XOM  ) all reporting this morning, and other hotly anticipated reports from Amazon.com and Facebook coming in the afternoon.

3M told investors it earned $1.66 a share in its second quarter, a penny above estimates and up slightly from $1.60 a year ago, though net income increased less than 1%. Revenue, meanwhile, fell 2% to $7.53 billion, in part due to a stronger U.S. dollar. Efforts to roll back costs and boost productivity helped operating margins improve to 22.9%.

Fellow conglomerate United Technologies posted EPS growth of 15% to $1.62, though that includes a net profit of $0.04 in one-time adjustments. Sales dropped 5% to $13.8 billion on foreign-currency translation and divestitures, while comparable sales grew 1%. Shares were down slightly in premarket trading.

Finally, energy titan ExxonMobil posted a 49% gain in profit, thanks to a $7.5 billion tax gain from divestments. Adjusted earnings, however, were down to $1.86 from $2.18 a year ago, as oil prices have been lower recently. Analysts were looking for EPS of $1.95. Oil and gas production declined by 5.6%, while revenue was up slightly from last year to $127.4 billion. Shares were down about 1% before market open, as they were for rival Royal Dutch Shell (NYSE: RDS-A  ) , which dropped 2% as profits fell 13%.

Two economic reports of note also came out this morning. Initial unemployment claims dropped to 353,000 last week, down from 388,000 the week before and well under the 381,000 economists had been expecting. Continuing claims also dropped slightly.

Durable-goods orders increased 1.6% to $221.6 billion in June, which beat estimates of 0.3%, and May's figure was also revised slightly upward. Those two news items could help push stocks even higher, as they could indicate a turnaround in the economy.

Earnings reports have been disappointing for many investors this season, so if you're looking for a safe, long-term investment to counteract the recent volatility, I recommend taking a look at our newest special free report. It contains three carefully selected Dow stocks that dividend investors need. These aren't necessarily the ones with the highest yields, but they have the competitive advantages, global reach, and product diversity to ensure steady returns for decades to come. You can access this report now at no cost. All you have to do is click right here.

Fool contributor Jeremy Bowman holds no positions in the companies in this article. The Motley Fool owns shares of ExxonMobil. Motley Fool newsletter services have recommended buying shares of 3M. Motley Fool newsletter services have recommended creating a diagonal call position in 3M. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1959026, ~/Articles/ArticleHandler.aspx, 10/26/2014 4:42:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement