Stock Market News For July 27, 2016

Benchmarks finished mixed on Tuesday following a flurry of earnings results and ahead of Fed’s two-day policy meeting, which will end today. McDonald’s suffered its worst one-day percentage decline in seven years after reporting disappointing same-store sales data, which in turn weighed on the Dow. However, Caterpillar and United Technologies registered gains following better-than-expected earnings results, which in turn pushed the S&P 500 northward. Also, the Nasdaq reached its highest level for the year on the back of strong gains from Linear Technology.

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) decreased 0.1%, to close at 18,473.75. However, the S&P 500 rose 0.70 points to close at 2,169.18. The tech-laden Nasdaq Composite Index closed at 5,110.05, gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) decreased 2.3% to settle at 12.58. A total of around 6.5 billion shares were traded on Tuesday, lower than the last 20-session average of 6.8 billion shares. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 37% declined.

Investors awaited the outcome of the Fed’s two-day policy meeting, which will end today. It is expected that Fed will not raise interest rate but might provide some clues on the timing for next rate hike. Additionally, recent encouraging economic data might result in an earlier-than-anticipated rate hike.

Dow component McDonald's (NYSE:MCD) Corporation’s (MCD) shares declined 4.5%, its worst percentage fall since July 23, 2009 following weak growth in same-store sales. Company’s U.S. comps grew 1.8% in the second quarter, lower than the prior-quarter rise of 5.4% due to softening industry growth. The company also reported second quarter earnings and revenues of $1.25 per share and $6.265 billion missing the Zacks Consensus Estimate of $1.38 and $6.281 billion, respectively.

Another Dow component, 3M Co’s (MMM) shares fell 1.1% after reporting weaker-than-expected second quarter earnings results and narrowing down 2016 earnings guidance. Although 3M’s quarterly earnings of $2.08 came in line with the Zacks Consensus Estimate, revenues of $7,662 million missed the Zacks Consensus Estimate of $7,725 million. Also, 3M narrowed its earnings guidance range for 2016 to $8.15 to $8.30 per share from $8.10 to $8.45 expected earlier.

Declines in McDonald's and 3M weighed on the Dow. However, shares of Caterpillar Inc (NYSE:CAT). (CAT) and United Technologies Corporation (NYSE:UTX) (UTX) rose 5.2% and 3.1% which helped trim some of the losses in the blue-chip index. United Technologies posted its best percentage rise so far this year.

Caterpillar announced second quarter adjusted earnings of $1.09 cents per share, beating the Zacks Consensus Estimate of 96 cents. Revenues of $10.3 billion, was also higher than the Zacks Consensus Estimate of $9.99 billion. United Technologies reported second-quarter adjusted earnings and revenues of $1.82 per share and $14,874 million, outpacing the Zacks Consensus Estimate of $1.65 and $14,634 million, respectively.

Gains in Caterpillar and United Technologies led the Industrial Select Sector SPDR (XLI) to increase 0.8%, which was the biggest advancer among the S&P 500 sectors. Some of the industrial stocks including Masco Corporation (NYSE:MAS) (MAS), PACCAR Inc (NASDAQ:PCAR). ( PCAR) and Cummins Inc (NYSE:CMI). (CMI) advanced 4.7%, 4.4% and 3.3%, respectively. Dow component Boeing Company (NYSE:BA) (BA) rose 1.4%.

Moreover, tech-based index Nasdaq managed to end in the green after Linear Technology Corporation (NASDAQ:LLTC) (LLTC) registered its best one-day percentage gains in history. Shares of Linear Technology jumped 28.9% on news that Analog Devices Inc (NASDAQ:ADI) (ADI) will acquire the company for almost $14.8 billion. Linear Technology was the best performer among the S&P 500 sectors.

Separately, shares of Verizon Communications Inc (NYSE:VZ). (VZ) fell 1.9% after its second quarter revenues of $30,532 million missed the Zacks Consensus Estimate of $31,117 million. However, adjusted earnings per share of 94 cents beat the Zacks Consensus Estimate by a cent.

Losses in Verizon led the telecom services sector within the S&P 500 to fall 1.5%. Its other key holdings including AT&T (NYSE:T), Inc. ( T), CenturyLink (NYSE:CTL), Inc. (CTL) and Level 3 Communications, Inc. (LVLT) declined 1.3%, 0.8% and 0.3%, respectively.

In economic news, new home sales advanced 3.5% to a seasonally adjusted annual rate of 592,000 in June, reaching its highest settlement since Feb 2008. Also, the Conference Board reported that Consumer Confidence Index remained mostly unchanged at 97.3 in July compared to June’s reading of 97.4.

The S&P/Case-Shiller Home Price Index revealed that 20-City composite index, the leading measure of U.S. home prices, rose 0.9% in May, lower than a 1.1% rise in April.