Stock Market News for Jan 31, 2020

U.S. equities rebounded sharply late to end in the green on Thursday. Equities were largely boosted by a string of impressive earnings reports that streamed in and helped investors finally look beyond their fears over the Coronavirus outbreak. Earnings reports from major blue-chip companies such as Microsoft Corporation MSFT and The Coca-Cola Company KO propelled benchmark indices on Jan 30.

The Dow Jones Industrial Average closed at 28,859.44 after gaining 0.4%, the broader S&P 500 closed at 3,283.66 after increasing 0.3% and the tech-laden Nasdaq Composite hit 9,298.93 after rising 0.3%.

The fear-gauge CBOE Volatility Index (VIX) rose 7.9% to close at 16.71 on Jan 30.

WHO Declares Coronavirus a Public Health Emergency

The World Health Organization (WHO) on Jan 30 named the Coronavirus outbreak a public health emergency of international concern. The illness has spread to as many as 18 countries so far. In addition, the Centers for Disease Control and Prevention on Thursday confirmed the first case of person-to-person infection of Coronavirus in Illinois.

The disease, which originated in Wuhan, China, has killed at least 213 people and more than 9,800 confirmed cases of infections in the Asian country as of Jan 30.

Better-Than-Expected Earnings Keep Pouring In

Shares of Microsoft rose 2.8% after the company reported second-quarter fiscal 2020 non-GAAP earnings of $1.51 per share, which surpassed the Zacks Consensus Estimate by 14.4%. Major reasons behind the splendid earnings were robust execution and more demand from customers for commercial cloud services. In fact, it was the expansion in Microsoft’s Azure public cloud business and Office 365 productivity suite that pushed earnings higher.

Revenues of $36.096 billion also improved 14% from the year-ago quarter. The figure clearly outpaced the Zacks Consensus Estimate of $35.711 billion. The company’s strong Commercial business aided both its earnings and revenues. The Commercial cloud revenues came in at $12.5 billion, rising 39% year over year. (Read more)

Shares of Coca-Cola increased 3.3% after the company reported fourth-quarter 2019 comparable earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents. The beverage giant’s impressive earnings were a result of its many new products that offer diversification and more customers purchasing higher-priced products.

The company’s revenues of $9,068 million also surpassed the Zacks Consensus Estimate of $8,893 million and increased 16% year over year. New products such as Coke Plus Coffee and the expansion of Coke Zero Sugar boosted sales last quarter. Sales were also pushed by teas from its brand Fuze and coffee. In addition, Coca-Cola also gained from an extra day in the reported quarter. (Read more)

Shares of Amazon.com, Inc. AMZN also rose 0.7% on Thursday after the company reported quarterly earnings of $6.47 per share, which beat the Zacks Consensus Estimate of $3.98.

The company’s revenues of $87.44 billion for the quarter ended December 2019 also outpaced the Zacks Consensus Estimate by 1.7%. The higher revenues were a result of Amazon’s investments in faster shipping, which led to more purchases by customers. The company also said that it witnessed record sales during the holiday season. (Read more)

Shares of Tesla, Inc. TSLA rose 10.3% after the automaker’s earnings per share of $2.14 in fourth-quarter 2019 beat the Zacks Consensus Estimate of $1.62. The company’s revenues also increased to $7.38 billion from the $7.22 billion registered in fourth-quarter 2018. Tesla’s revenue figure also surpassed the Zacks Consensus Estimate of $7.05 billion. In the reported quarter, Tesla reported record delivery of 112,095 vehicles. (Read more)

Microsoft and Coca-Cola carry a Zacks Rank #2 (Buy). Amazon and Tesla carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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