Today, it seemed investors were focusing on a number of different things and while individual company earnings comprised a large part, weak economic data on housing certainly played some role. The National Association of Realtors released data this morning indicating that existing home sales in June fell by 1.1% from May. While it is very likely that rising interest rates played a part in the decline, it is unknown how much that affects the total because this figure is based on actual closings, not contracts. This would make a difference because buyers would have already decided it was time to buy and a few points higher on interest shouldn't have affected their payments too dramatically in most markets. We should get a better picture of housing and how interest rates are influencing things when we see July and August's sales results.
On the earnings side, although McDonald's (MCD 0.37%) just slightly missed on revenue and earnings per share for the second quarter, weak same-store sales growth and a warning from management hold a number of challenges for the company.
The housing report and McDonald's report weighed on the markets today and led the Dow Jones Industrial Average (^DJI 0.56%) to only gain 1.81 points, or 0.01%, today. The S&P 500 performed slightly better while gaining 0.2% as the Nasdaq rose 0.36%. Other than McDonald's, which lost 2.68%, there were a number of other losers within the Dow today, so let's take a look at a few of them.
Despite being up 13.9% over the last month, light crude oil declined 1.06% today, and with that fall, shares of ExxonMobil (XOM 1.15%) slid lower by 0.36%. The energy commodities markets were rather red today, while light crude moved lower, unleaded gasoline lost 2.19%, natural gas fell 2.96%, and even heating oil lost 0.74%. These moves certainly played a role in the minds of investors today. Furthermore, some are now questioning whether Exxon can return to its glory days when it crushed the markets, as opposed to the past two years when the company has easily underperformed the S&P 500.
Moving into tomorrow's earnings announcement, shares of AT&T (T 1.10%) closed lower by 0.64%. My colleague Dan Caplinger noted earlier today that its earnings report will not likely show a fast-growing company and that its share price appreciation is similarly sluggish. Analysts have recently reduced estimates for both this quarter and full year, so if tomorrow's results don't match expectations, today's decline may be just the start of a big fall.
Shares of Intel (INTC -2.40%) lost 1.17% today after the company announced that it is rethinking servers and how they are put together. Intel announced at an event with analysts and media that it will be trying to encompass low-energy chips into a new line of servers while also rethinking the way a server works. This move comes as the company is attempting to stay ahead of the competition and keep the smaller chip manufactures at bay. But the declining share price may mean investors are concerned with where Intel may be going and that if this new idea doesn't work out as planned, that the company may be in some hot water.
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