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It continued to be a rough week for the markets today, with the broad-based S&P 500 (SNPINDEX: ^GSPC ) being jerked lower because of continued weakness in Apple, as well as a slight rise in initial jobless claims.
Apple continued its swoon following news yesterday that one of its audio suppliers for the iPhone and iPad, Cirrus Logic, would fall short of Wall Street's revenue forecasts for the upcoming quarter, leading many to believe that Apple's sales are bound to slump, as well.
On the jobs front, initial jobless claims climbed 4,000, or 1.1%, to a seasonally adjusted rate of 352,000. While that's hardly a big rise, or a sign that the labor market is deteriorating, any upward movement in jobless claims in the same week that China reports weaker sequential GDP figures, and commodities tumble, is bound to put goose bumps on traders' backs.
For the day, the S&P 500 finished lower by 10.40 points (-0.67%), to close at 1,541.61. Despite the third big down day in the past four sessions, three stocks -- with a heavy emphasis on energy, chemicals, and transportation -- all bucked the trend following better-than-expected earnings reports.
Coal miner Peabody Energy (NYSE: BTU ) was the biggest gainer within the index today, adding 7.6% after reporting first-quarter earnings results that impressed investors. For the quarter, revenue fell 14%, to $1.75 billion, as U.S. shipments and realized coal prices continued to be under pressure. However, Peabody's adjusted loss per share of $0.05 was much smaller than the $0.13 loss forecast by analysts. Looking ahead, Peabody anticipates second-quarter EPS will fall within a range of a $0.25 loss to a $0.01 profit. Peabody's results helped pull CONSOL Energy (NYSE: CNX ) and a myriad of other coal companies higher, because its better-than-expected forecast could signal that the softness in coal prices is abating, and that coal demand, domestically and overseas, is improving. With natural gas prices having doubled in the trailing 12-months, electric utilities are going to be less inclined to make the switch to natural gas at these prices, making Peabody and CONSOL potentially attractive investments.
Paint and coating specialist PPG Industries (NYSE: PPG ) advanced 6.2% after following Peabody's lead, and reporting solid first-quarter earnings results. For the quarter, PPG reported what was essentially flat revenue at $3.33 billion, and a profit of $1.58 per share, versus consensus estimates calling for $3.44 billion in revenue, and $1.56 in EPS. Furthermore, PPG boosted its quarterly dividend by 3%, to $0.61, for a new forward yield of 1.7%. The quarter was influenced by a $2.19 billion sale of one of its units to Georgia Gulf, but it speaks more to the ongoing strength in the paint business from a consumer and commercial level.
Finally, railroad giant Union Pacific (NYSE: UNP ) trekked 4% higher after reporting better-than-expected first-quarter results. Despite weak coal shipments, which had dragged down Union Pacific's earnings potential in recent quarters, the company delivered an 11% boost in profits, to $2.03 per share, as revenue rose nearly 4%, to $5.29 billion. Both figures easily surpassed the $5.22 billion in revenue and $1.96 in EPS that the Street was expecting. Union Pacific utilized higher prices to boost its bottom line, as total shipping volume fell 2%. However, similar to what we've been hearing from many coal companies, Union Pacific expects overall shipping demand to improve in the second-half of the year.
Are coal stocks ready to rebound?
The coal industry in the United States has been in a state of flux since the arrival of a cheaper alternative for energy production: natural gas. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is, perhaps, most worthy of your consideration. Don't miss out on this invaluable resource -- simply click here now to claim your copy today.