Stock Market News For July 25, 2016

Benchmarks ended in the green on Friday following strong gains from telecom giants Verizon and AT&T (NYSE:T) and better-than-expected private domestic manufacturing data. Although, some of Friday’s gains were curtailed by declines in industrial companies such as General Electric, all the key U.S. indexes posted gains. The S&P 500 reached an all-time high, the Dow ended in the green for the tenth sessions of the last eleven trading days and the Nasdaq registered its best gains for the year. Also, the S&P 500 posted first four straight weeks of gains after a five week winning streak in March. The Nasdaq ended the week in the green for the first time since March.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.

The Dow Jones Industrial Average (DJI) increased 0.3%, to close at 18,570.85. The S&P 500 rose 0.5% to close at 2,175.03. The tech-laden Nasdaq Composite Index closed at 5,100.16, also gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) decreased 5.7% to settle at 12.02. A total of around 5.6 billion shares were traded on Friday, significantly lower than the last 20-session average of 7.5 billion shares. Advancers outpaced declining stocks on the NYSE. For 64% stocks that advanced, 32% declined.

AT&T, Inc’s (T) shares increased 1.4% after reporting second quarter earnings per share (EPS) and revenues of 72 cents and $40,520 million, increasing 4.3% and 22.7% year-over-year, respectively. Moreover, its EPS came in line with the Zacks Consensus Estimate, but its revenues failed to beat the Zacks Consensus Estimate of $40,661 million.

Additionally, shares of Verizon Communications Inc (NYSE:VZ). (VZ) advanced 1.3% on news that the company emerged as the front-runner to acquire the core internet business of Yahoo! Inc (NASDAQ:YHOO). (YHOO) for about $5 billion. Shares of Yahoo also increased 1.4% on this latest development.

Gains in AT&T and Verizon led the telecom services sector within the S&P 500 to gain 1.3%. Its other key holdings including CenturyLink (NYSE:CTL), Inc. ( CTL), Frontier Communications Corporation (NASDAQ:FTR) (FTR) and Level 3 Communications, Inc. (LVLT) rose 0.9%, 1.4% and 0.9%, respectively.

Following a rise in telecom stocks, another defensive sector, utilities, also moved northward. The Utilities Select Sector SPDR (XLU) increased 1.3% and was the biggest gainer among the S&P 500 sectors. Key utilities stocks including Exelon Corporation (NYSE:EXC) ( EXC), American Water Works Company, Inc. (AWK), Duke Energy Corporation (NYSE:DUK) (DUK), NextEra Energy (NYSE:NEE), Inc. ( NEE) and CenterPoint Energy (NYSE:CNP), Inc. (CNP) advanced 2.6%, 2.1%, 1.3%, 1.2% and 1.9%, respectively.

According to Markit, the U.S. manufacturing purchasing manager index (PMI) was 52.9 in July, reaching its best settlement since last October. The preliminary reading was also more than June’s figure of 51.3 and analysts’ forecasts of 51.5. PMI’s reading above 50 indicates expansion, which in turn had a positive impact on investor sentiment.

However, some of Friday’s gains were curtailed following drop in Dow component, General Electric Company (NYSE:GE) ( GE). Despite posting a better-than-expected second quarter earnings results, shares of General Electric declined 1.6% after its total orders for the quarter in the industrial segment decreased by 2% year-on-year to $26.6 billion. Significant fall in demand from the Transportation and Oil & Gas segments led to this decline.

Separately, the company reported second quarter operating earnings and net revenues of 51 cents per share and $33,494 million beating the Zacks Consensus Estimate of 46 cents per share and $30,844 million, respectively.

Also, Honeywell International Inc (NYSE:HON). (HON) posted second quarter earnings of $1.66 per share outpacing the Zacks Consensus Estimate by 2 cents. However, its quarterly revenues of $9,991 million missed the Zacks Consensus Estimate of $10,134 million. Shares of Honeywell fell 2.6% after the company lowered its full-year sales outlook to the range of $40.0–$40.6 billion from the earlier projection of $40.3–$40.9 billion.

Losses in General Electric and Honeywell curbed most of the gains in the industrial sector. The Industrials Select Sector SPDR (XLI) increased only 0.2% and was worst performer among S&P 500 sectors. Some of its components Caterpillar Inc (NYSE:CAT). (CAT), Deere & Company (NYSE:DE) (DE) and United Technologies Corporation (NYSE:UTX) ( UTX) fell 0.8%, 2.2% and 0.7%, respectively.

For the week, the Dow, S&P 500 and Nasdaq rose 0.3%, 0.6% and 1.4%, respectively. Technology sector was the biggest advancer among the S&P 500, following upbeat earnings results of Intel Corporation (NASDAQ:INTC) (INTC) and Microsoft Corporation (NASDAQ:MSFT) ( MSFT). Even the broader markets was pushed upward following a flurry of encouraging earnings results from company including Bank of America Corp (NYSE:BAC) (BAC), Goldman Sachs Group (NYSE:GS), Inc. (GS), Morgan Stanley (NYSE:MS) (MS), Johnson & Johnson (NYSE:JNJ) (JNJ), Abbott Laboratories (NYSE:ABT) (ABT) and Hasbro Inc (NASDAQ:HAS). ( HAS).

Moreover, economic data including housing data was also favorable. Housing starts, building permits and existing home sales rose last month. Also, initial claims for the week ending July 16 came in at 253,000, a decrease of 1,000 from the prior week and less than the consensus estimate of 260,000.