The Dow Jones Industrial Average has lost 18 points in the premarket, suggesting a flat start for the stock market today. Global shares were mixed to end the trading week: Japan's Nikkei gained 1.1% while European stocks were lower by 0.4% as of 9 a.m. EDT.
Three-quarters of the S&P 500 companies that have posted second-quarter results so far have beat Wall Street's expectations, according to a tally by Bloomberg. That's one reason why stocks are bumping around near record highs. Still, more than half of the index's constituents have yet to deliver their quarterly numbers, so investors can expect more volatility in the weeks ahead.
Starbucks easily beat Wall Street's estimates last night by delivering a 22% jump in earnings on an 11% revenue gain. Comparable-store sales grew by 7% in the United States, which is a comp figure that most retailers couldn't hope to match. Consistent with recent trends, Starbucks' menu expansion gave sales a big boost as new food options from the La Boulange bakery rollout were responsible for 2 percentage points of comps growth in the U.S., management said. That should just be the start, though, as Starbucks plans to bulk up its lunchtime food offerings now that its breakfast upgrade is nearly complete. The stock was down 2.8% in premarket trading after gaining almost 2% in yesterday's session.
Moody's today delivered a healthy beat on both the top and bottom lines. Second-quarter revenue climbed 16% to $873 million, while Wall Street was expecting the financial services giant to see just a 6% rise to $800 million. Profit also came in surprisingly high as non-GAAP EPS improved 12% year over year to $1.12 a share.
CEO Raymond McDaniel said in a press release that those strong results reflected "healthy market conditions and good demand for a wide range of our products and services." To be sure, both of the company's major business divisions, investor services and analytics, booked 15% sales gains in the quarter. Expenses, meanwhile, grew at a slower pace, which helped operating margin climb by nearly a full percentage point to 47.1%. Moody's boosted its 2014 sales outlook, saying that it now expects gains in the "low-double-digit-percent range," as opposed to the "high-single-digit-percent range" it had forecast last quarter. The stock was up 1.8% in pre-market trading.