Third quarter earnings season has been more positive than expected by and large. We have seen some very positive earnings season reactions. We have also seen some serious duds after earnings. 24/7 Wall St. wanted to see which of the DJIA stocks reacted the best and the worst so far this earnings season.
We reviewed the best and worst performing DJIA stocks of the last month and then reviewed the best and worst post-earnings reports of these DJIA stocks. The price performance immediately after the actual news announcement has been shown, as has the total reaction since the earnings news based upon the closing price of Friday, November 1, 2013.
24/7 Wall St. recently showed the worst DJIA stocks so far in 2013. Those were based upon year-to-date performance and captured the sentiment of the year rather than in recent trading sessions since earnings season kicked off.
The three biggest winners were General Electric Co. (NYSE: GE), American Express Co. (NYSE: AXP), and then The Boeing Company (NYSE: BA). Microsoft Corp. (NASDAQ: MSFT) deserves at least a runner-up mention here as well. The three biggest losers were Caterpillar Inc. (NYSE: CAT), UnitedHealth Group Incorporated (NYSE: UNH), and International Business Machines Corp. (NYSE: IBM). There is also a rather peculiar observation in Alcoa Inc. (NYSE: AA) even though it was booted out of the DJIA recently.
Many issues are driving earnings. The federal government shutdown did not do the worst case damage some were fearful of. Domestic business trends are still better than international and emerging markets. The Fed’s bond tapering is not coming on as fast as once feared, and interest rates are not rising as rapidly as they could have. And both the DJIA and the S&P 500 Index hit new all-time highs this last week.
2013 is turning out to be a stellar year for stocks. The S&P 500 Index is up a whopping 23.5% year-to-date, followed by a gain of some 19.1% for the Dow Jones Industrial Average during the same time.
General Electric Co. (NYSE: GE) managed to beat its earnings expectations and post a record backlog of future orders back on October 18. GE was at $24.68 ahead of earnings, but shares rose 3.5% immediately after the report to $25.55. Things have gotten even better from there with last Friday’s close at $26.54 being a total post-earnings gain of 7.5%. That is a post-meltdown multi-year high closing price for GE’s common stock.
American Express Co. (NYSE: AXP) reported strong earnings based upon strong US trends of 12% domestic growth and total revenue growth of almost 6%. The October 16 report had a closing stock price of $76.32 and shares gained 5.1% the following day to $80.23. Shares closed last Friday even higher at $82.16 for a total post-earnings gain of 7.6%. We would point out that the highest close was $83.66 on October 29, and if that would have been the measuring point the AmEx gain from trough to peak would have been 9.6%.