U.S. equities took a wild ride on Tuesday, starting the day on an upswing thanks to better-than-expected earnings from Coca-Cola Coca-Cola and Johnson Johnson Johnson Johnson, reversing those gains and then some in the early afternoon, and finally closing the day in the green. Meanwhile, the volatility index surged and gold closed for its worst day since December as escalating tensions in Ukraine and weak domestic economic data shook investor confidence yet again.
The Dow Jones Industrial Average surged nearly 100 points in Tuesday’s early morning trading session before losing those gains throughout the morning and hitting a day-low — a 110-point decline — in the early afternoon. However, the index didn’t stay there; instead, it rebounded as the afternoon trading session wore on and is poised to close in the green by 89.3 points, or a gain of 0.55%. The SP 500 and the Nasdaq had similar trajectories on Tuesday, both opening the day in the green, hitting a high in the morning – 1,843.77 for the SP and 4,054.80 for the Nasdaq — but then losing those gains as the morning went on, eventually hitting lows – 1,816.29 for the SP and 3,946.03 for the Nasdaq — in the early afternoon. However, like the Dow, neither index remained in the red for the rest of the afternoon; both went on to recover their losses and close in the green, with the SP settling for a 12.3-point or AN 0.68% gain and the Nasdaq closing up 11.5 points, or 0.29%.
Lending the markets momentum in the morning were Coca-Cola and Johnson Johnson. The two Dow components reported better-than-expected first quarter 2014 earnings early Tuesday, with Coca-Cola coming in line with Street estimates on its 44-cents earnings per share and edging above the consensus with its $10.58 billion in first quarter revenue. This was enough of an earnings beat to offset a $247 million charge from the devaluation of the Venezuelan bolivar, and the stock traded in the green throughout the day, eventually settling at $40.17 per share, for a gain of 3.72%.
Johnson Johnson pulled off a bigger earnings surprise, reporting earnings per share that were six cents above the Street estimate and revenue that was also above the analyst consensus. Shares of JJ also traded in positive territory throughout the throughout the day, eventually closing at $99.19, for a gain of 2.1%.
However, early morning gains on the heels of these earnings beats were offset by conflicting domestic economic data — the consumer price index (CPI) was 0.2% in March, beating the 0.1% consensus, but the Empire Empire State manufacturing index from 5.6 to 1.3, well below the 8.0 consensus — as well as concerning news that the Ukrainian military stormed an airport in an apparent attempt to confront pro-Russia militants. The news broke in the early afternoon, at which point the SP Volatility Index, the VIX, hit 17.5, its high for the day.
These geopolitical concerns, coupled with investor suspicions that the Fed will not raise interest rates, led to gold’s worst day in four months: gold futures closed its regular trading session at $1,300.30 an ounce, a 2.1% drop. The metal continued to trade in the red in after hours trading, and is currently down 1.8%. The other precious metals — silver, platinum and palladium — also spent the day and after-hours session in the red, with silver futures down 2.07%, platinum down 1.65% and palladium down 1.78%.
Electronic retailers hhgregg, Best Buy Best Buy and RadioShack were battered in Tuesday trading thanks to a worse-than-expected outlook from hhgregg, which said it estimates that its fourth quarter comparable store sales decreased 9.9%, with consumer electronics decreasing 18.9% and sales in the computing and wireless category expected to have fallen a whopping 22.6% for the quarter. Shares of hhgregg eventually settled for a 9.5% loss, and those losses extended to Best Buy and RadioShack, which closed Tuesday trading with a 2.7% decline 9.6% decline, respectively.