As Federal Chairman Ben Bernanke concluded his two-day tour of Capital Hill today, and investors were handed a better-than-expected jobless claims report, both the Dow Jones Industrial Average and the S&P 500 set new all-time record highs. The blue chip index ended the session higher by 78 points, or 0.5%, and set a new all-time closing high at 15,548. It also set a new all-time high at 15,589 during today's session. The S&P 500 rose 8.46 points, or 0.5% and also set a new record closing high at 1,689, and a new intraday high at 1,693. While the Nasdaq didn't set any new records today, it did increase by 0.04%.
The better-than-expected jobless claims number came in at 334,000 last week as analysts were expecting 345,000 for the week. This report, along with a number of earnings reports, helped push stocks higher. This morning, I explained why three of the Dow's components were moving lower due to lackluster earnings results; now let's take a look at a few of the Dow's components that ended as big winners as a result of strong earnings today.
UnitedHealth was the Dow's biggest winner of the day, as shares rose 6.52% today. The company released its earnings report, which indicated that the company had slightly missed estimates on the top line, but beat on the bottom line. Expected revenue was $30.5 billion, while estimated earnings per share was set at $1.25, but UnitedHealth posted revenue of $30.4 billion and EPS of $1.40. Revenue rose 12% during the quarter over the same time frame as last year, and diluted GAAP earnings increased by 10%. Whether the good times will continue is anyone's guess, as the ObamaCare law is set to go into effect in just a few months, and most analysts are still unsure how the health-insurance companies will be affected by the new laws.
Another big winner was International Business Machines , which rose 1.77% after an earnings report, also. IBM beat analysts' earnings per share estimates of $3.78, with profit of $3.91, after less-than-flattering revenue. The way the company managed to do this was by cutting jobs, repurchasing stock, and increasing its margins. But what investors really liked hearing today was that the company was increasing its guidance for full-year operating earnings by $0.20 per share.
Lastly, the second biggest Dow winner today was Bank of America , which rose 3.14%. The catalyst for this move wasn't completely the bank's second-quarter earnings. But those results did play a large role in the move, because UBS increased its price target on Bank of America today due to the strong quarterly report. Additionally, UBS cited that better cost controls for Bank of America going forward would help it improve earnings in the coming quarters.
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