U.S. stocks were modestly higher midday Wednesday, eyeing their seventh straight record close.
Stocks were particularly buoyed by better-than-expected earnings reports from Microsoft and Morgan Stanley, which helped investors regain some confidence lost after Netflix reported worse-than-expected earnings Tuesday.
Stocks on the Move
Microsoft (MSFT) shares rose 6.9% after the company reported sales of its Azure cloud computing service more than doubled in its fiscal fourth quarter, offsetting a decline in the segment that includes its flagship Windows operating system and its struggling mobile-phone business. "While the growth in these businesses will likely create pockets of weakness from a profitability perspective, we continue to believe products such as Azure, Office 365, Dynamics and other cloud-based initiatives will carry strong margin profiles in the long run," said Morningstar equity analyst Rodney Nelson. Nelson said he is maintaining Microsoft's wide economic moat rating, and we do not anticipate making a material change to our $61 fair value estimate.
Shares of Morgan Stanley (MS) rose 2.2% after the bank reported second-quarter earnings that beat lowered expectations. The bank's net income declined to $1.58 billion, or $0.7 a share, from $1.81 billion, or $0.85 a share, a year ago, and revenue fell 8.6% to $8.91 billion; however, consensus expectations were far more pessimistic.
Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.