The markets enjoyed yet another day of gains as earnings was once again the driving factor. The Dow added 140 points thanks to good earnings from a few Dow names. The S&P 500 added 1, and the Nasdaq 100 lost 3.
American Airlines (NYSE: AAL) fell another 2.88% today as investors continue to weigh the capacity increases announced yesterday which many feared would create more price wars. This, in turn could lower profit margins going forward. The CEO of American attempted to offset this news by commenting that "fares are too low for oil prices this high." He did not shy away from comments that oil prices at these levels could translate into higher ticket costs for passengers. United (NYSE: UAL), and Delta (NYSE: DAL) were also lower on the day by 3.91%, and 3.09% respectively.
Home Depot (NYSE: HD) was yet another company to announce post tax reform bonuses today. As we have seen with other announcements in the past, shares were lower on the news. The company says they will take a page from WalMart's (NYSE: WMT) book and distribute bonuses based on length of service. Bonuses will range from $200 to $1000 for US employees. Shares are still higher by about 10% on the year. They also commented that the new tax law may actually cause them additional expenses of $150 million in the fourth quarter thanks to offshore earnings.
In the Dow the headliners were Caterpillar (NYSE: CAT) and 3M (NYSE: MMM) as they both announced earnings. Caterpillar was higher today on earnings that came in well above expectations. They also beat expectations on their forward guidance. The company also commented that they could see a benefit from the new tax laws but investors remained skeptical. Currently Caterpillar uses a Swiss "subsidiary" to drastically reduce their corporate tax rate. This practice has been challenged by the IRS, and if they lose it could cost the company $2 billion.
3M was the other Dow name that beat earnings today. The company announced earnings that beat expectations. They also announced they would raise their forward guidance which sent shares to new highs. The stock is now higher by 8.5% on the year.
In other news the Dollar (NYSE: UUP) continued to move to new lows as the Treasury Secretary seemed to side with President Trumps wishes for a weaker dollar. This is seen as a 180 from previous Secretary's views. Gold (NYSE: GLD) briefly broke to new highs on the news.
Volatility (NYSE: VXX) was also higher today as the markets traded in more of a wild range rather than the straight up moves we have seen so far this year.