With the U.S. presidential election less than three weeks away, everyone's attention is being turned to macroeconomic indicators and corporate earnings. Today, neither seemed to disappoint, with the broad-based S&P 500 (SNPINDEX:^GSPC) rising 5.99 points (0.41%) to end at 1,460.91.
The biggest boost came from U.S. housing starts, which rose an astonishing 15% in September to an annual rate of 872,000 --ÂÂ its highest rate since July 2008. A downtick in unemployment, historically low mortgage rates, and a huge uptick in building permits is giving credence that we may indeed have seen a bottom in the housing sector. PulteGroup (NYSE:PHM) led the sector higher within the S&P 500, advancing by better than 5%.
But, make no mistake about it -- today's movements were very much influenced by earnings and spinoff announcements. Let's quickly look at three companies that had a big impact on the S&P 500.
Dairy supplier Dean Foods (NYSE:DF) was the biggest winner within the S&P 500, rising 13% following the announcement of its expected pricing for its spinoff of WhiteWave-Alpro. While remaining the majority shareholder, Dean expects to raise around $300 million by pricing 20 million shares in a range of $14 to $16. The proceeds will be used to pay down Dean's exorbitant debt load of $3.5 billion. My Foolish colleague Jeremy Bowman isn't nearly as excited about the spinoff and thinks shareholders have more than priced the deal into Dean Foods' share price.
The disaster du jour was for-profit educator Apollo Group (NASDAQ:APOL) which was sent to the principal's office following the release of its fourth-quarter earnings results. In a truly miserable report, Apollo Group noted that profits fell by 60%, it said student enrollment continued its unabated decline by falling 14%, it forecasted revenue well below Wall Street's consensus estimates in 2013, and it announced the closure of 115 of its smaller locations throughout the country. Battleship sunk! Apollo shares cratered 22% today.
IBM (NYSE:IBM) also had a rare off day, ending down $10.37, or 5%, after reporting disappointing third-quarter results. IBM's profit and revenue both fell shy of analysts' estimates, causing Big Blue to tumble. Not all hope is lost, however, as Fool John Maxfield suggests. As John noted in his three important takeaways from IBM's earnings report, gross margins expanded, emerging-market growth is driving new revenue pathways, and currency fluctuations seem to be one of the only true headwinds for IBM. In short, IBM looks to be just fine.
Dow but not out
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of Dean Foods and IBM. Motley Fool newsletter services have recommended buying creating a synthetic long position in IBM. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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