Market Wrap-up for May 15 - The Week in Review

Before Monday’s opening bell, several big-name dividend stocks released quarterly results:

• Sotheby’s (BID ) – Reported Q1 EPS of $0.11 — $0.11 better than the analyst estimate of $0.00. Revenue for the quarter was $155.7 million, beating the consensus estimate of $151.7 million.
• Dean Foods (DF ) – Reported Q1 EPS of $0.24 — $0.07 better than the analyst estimate of $0.17. Revenue for the quarter came in at $2.05 billion versus the consensus estimate of $2.11 billion.
• EV Energy Partners LP (EVEP) – EV Energy Partners reported a Q1 loss of $1.25 per share; analysts were expecting EPS to come in at a positive 17 cents. Revenues fell significantly short, coming in at $47.2 million versus the forecasted $71.3 million.

On Monda,y U.S. stocks slid; the pullback occurred just one session after the Dow posted its biggest one-day gain in over three months.

The Dow slipped 0.5%, the S&P lost 0.5%, and the Nasdaq shed 0.2%.

Only one major earnings was released on Tuesday:

• McKesson Corp (MCK ) – McKesson reported Q4 earnings of $2.94 per share, beating estimates by 19 cents. Revenues for the quarter were reported at $44.9 billion, slightly below the expected $45 billion.

Also on Tuesday, all three major equity indexes closed lower on the day, following a steep selloff in European equities. The Dow shed 36.94 points, the S&P 500 slipped 0.3%, and Nasdaq closed 0.35% lower. The pullback also weighed heavily on bond markets; during trading hours, the 10-year Treasury note yield popped to a 6-month high.

In other corporate news, Verizon (VZ ) announced its all-cash $4.4 billion deal to buy AOL (AOL). Be sure to check out this piece to learn more about the acquisition.

On Wednesday morning there were a few notable earnings releases:

• Cisco Systems (CSCO ) – Cisco reported earnings of 54 cents, beating the Street’s estimates by 1 cent. Revenues came in at $12.1 billion, slightly above the expected $12.07 billion.
• Macy’s (M ) – The retail giant missed Q1 earnings estimates, reporting EPS of $0.56 versus the expected $0.65. Revenues were reported at $6.23 billion, below the consensus estimate of $6.32 billion.

U.S. equities traded lower once again on Wednesday, dragged down by DuPont (DD ) shedding 6.8% during the session. DuPont’s drop was prompted by a shareholder re-election of all of the company’s sitting directors. The Dow ended 0.1% lower, the S&P 500 lost 0.64 point, while Nasdaq shed 0.1%. In other news, the Commerce Department reported U.S. retail sales were flat in April at $436.8 billion, versus the expected 0.2% uptick.

There were three notable earnings releases for dividend investors on Thursday:

• Applied Materials (AMAT ) – AMAT beat analyst estimates by 1 cent, reporting earnings of 29 cents per share. Revenues came in at $2.44 billion, slightly above the forecasted $2.40 billion.
• Kohl’s Corporation (KSS ) – This retailer reported Q1 EPS of 63 cents, beating analyst estimates of 55 cents. Revenue was reported at $4.12 billion, slightly below the expected $4.18 billion.
• Nordstrom, Inc. (JWN ) – Another retailer, Nordstrom, fell short of analyst estimates, reporting earnings of 66 cents per share versus the expected 71 cents. Revenues came in at $3.22 billion, slightly above the forecasted $3.15 billion.

U.S. equities staged a major turnaround on Thursday, with the S&P 500 rallying to its seventh record finish this year, beating its last all-time high reached in late April. The Dow also closed higher, rallying 1.1% during the session, while the Nasdaq popped 1.4% higher.

On Friday, there were no major earnings to report. Equity markets opened slightly higher at the bell, though trading remained subdued following Thursday’s record-breaking rally. In economic news, U.S. Industrial Production declined for the fifth consecutive month in April. The University of Michigan’s preliminary May consumer sentiment report was also reported; sentiment unexpectedly fell to 88.6 from a final April reading of 95.9.

Next week, earnings season will continue with results from Home Depot (HD ), Universal Corp (UVV ), Wal-Mart (WMT ), Target (TGT ), and Deere & Co (DE ).

In economic news, Building Permits will be released on Tuesday. On Wednesday, the FOMC meeting minutes will be released. Thursday will see unemployment claims and the Philly Fed Manufacturing Index released. Lastly, monthly CPI figures will be reported on Friday.

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