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Stocks - S&P Closes Flat Amid Earnings-Fueled Rally in Consumer Staples

Published 10/19/2018, 03:48 PM
Updated 10/19/2018, 04:20 PM
© Reuters.  The S&P 500 closed just above breakeven on Friday.

Investing.com - The S&P 500 closed just below the flatline Friday as upbeat earnings from corporates helped ease investor jitters about global growth.

The Dow Jones Industrial Average rose about 0.26%. The S&P 500 fell 0.04%, while the Nasdaq Composite fell 0.48%.

Consumer staples led the rebound on Wall Street from a selloff the prior day, supported by a rally in shares of Procter & Gamble (NYSE:PG) after it posted earnings and revenue that beat analysts' consensus estimates.

Consumer staples, widely viewed as a defensive corner of the market, notched a its biggest daily gain since June 2016 on Friday.

Industrials, meanwhile, struggled even as Schlumberger (NYSE:SLB) and Honeywell (NYSE:HON) reported better-than-forecast profits. Shares of Honeywell closed down, however, as investors focused on the company's weaker guidance for 2018, weighed down by the spinoff of Garrett Motion.

Honeywell cut its 2018 adjusted earnings to a range of $7.95 to $8.00 a share, down from previous guidance of $8.10 to $8.20, while the sales outlook was lowered to $41.7 billion to $41.8 billion from $43.1 billion to $43.6 billion.

The corporate earnings season, while in the early innings, is off to strong start. With more than 15% of S&P 500 companies having reported, 83% have topped analyst estimates, according to FactSet.

Positive earnings helped offset investor concerns over global growth in the wake of slowing performance in China.

China said overnight that its economy grew by 6.5% in the third quarter, missing expectations. After a brief leg lower, Chinese stocks surged as the government pledged to introduce stimulus in a bid to calm jittery markets.

Falling energy stocks also kept lid on gains in the broader market as oil prices settled higher, but pared gains on data showing the U.S. rig count had risen to March 2015 highs after drillers added four rigs this week.

In corporate news, Tesla (NASDAQ:TSLA) CEO Elon Musk announced on Twitter that a new variant of the company's Model 3 electric sedan was going on sale today. Its shares fell 1.5%.

Automakers were also on the back foot after Morgan Stanley (NYSE:MS) cut its earnings outlook on Ford Motor Company (NYSE:F), warning the company's dividend was at risk. Fiat Chrysler (NYSE:FCAU) and General Motors (NYSE:GM) closed up 0.13% and 0.39%, respectively.

Top S&P 500 Gainers and Losers Today:

Interpublic Group (NYSE:IPG), PayPal (NASDAQ:PYPL) and Procter & Gamble (NYSE:PG) were among the top S&P 500 gainers for the session.

Advanced Micro Devices (NASDAQ:AMD), VF Corporation (NYSE:VFC) and Valero Energy (NYSE:VLO) were among the worst S&P 500 performers of the session.

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