Earnings give a push to the S&P 500

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The S&P 500 benchmark US stock index climbed by 0.51% on Wednesday led by financials, technology and telecoms. Other US indices also rose with the Dow Jones Industrial Average gaining 0.49% and the Nasdaq advancing by 0.42%.

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Overall, there were some interesting moves on Wednesday with some nice gains and some equally nasty losses.

FMC Technologies had one of it’s better days of the year after reporting diluted Q1 earnings of $0.63 a share. This beat expectations and saw the stock jump by 7.50% to trade at $40.56. The oil services equipment provider now trades at 17 times forward earnings.

Elsewhere, it was a good day for St. Jude Medical which surged 6.41% to hit $73.55 a share. While multinational semiconductor company Broadcom soared exactly 5% after another positive quarter.

The news was not so good for Chipotle Mexican Grill which released Q1 numbers that disappointed the market and thereby sank a depressing 7.41% in late trading.

Meanwhile, manufacturer of robotic surgical systems, Intuitive Surgical experienced more volatility and saw its shares drop 5.45%. Although EPS was better than a year earlier, overall figures did not match analyst expectations.

Outlook & Technicals

 

After a quiet session in Asia, the S&P 500 started the European session on it’s pivot before falling back on some negative news out of Greece.

The index found buyers at the first support and proceeded to move higher throughout the day, touching the first resistance level around 20:00 GMT.

Looking ahead, we regard the index as moderately under-priced at this point and see a potential move up to 2,125 over the next few days. The triangular move [a,b,c,d,e] is over. We see the risk of reversal as low. Over the next few weeks, we have now turned bearish with the current rally expected to end around 2,130. We are targeting an initial first move back to 2,070.

Thierry Laduguie is Trading Strategist at www.bettertrader.co.uk

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