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Midday Market Update

Stocks Modestly Higher After Earnings

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U.S. Market    
Stocks were modestly higher in choppy trading this morning.

At midday the Dow was flat, the S&P 500 was up 0.2% while the Nasdaq was 0.4% higher.

Stocks on the Move
Shares of  General Electric (GE) were down 2% after the firm reported second-quarter earnings. Industrial orders were off, but management said they are expecting a pick-up in demand in the second half of the year.

In our view,  Chipotle (CMG) is a  unique case among restaurants recovering from food safety issues, largely because this case calls into question the "Food with Integrity" mantra that its brand was built upon. We believe this is evident in not only the 23.6% comp decline during the second quarter, but also the 20.5% decline thus far in July (well off market expectations calling for declines in the low-double-digit range). Despite the worse-than-expected results, shares were up 3.5% at midday.

 Starbucks' (SBUX) softer-than-expected U.S. comps (a 4% increase, versus market expectations in the mid-5% range) were the  clear story of the third quarter, and indicate that the company is not immune to the more cautious consumer environment weighing on much of the domestic restaurant industry. Shares were little changed. 

Sluggish growth remained a key theme during the second quarter at  AT&T (T), with the wireless, television, and broadband businesses  each posting soft customer figures. On the positive side, margins and cash flow remained solid. The core AT&T brand again showed weakness in the wireless market during the quarter, as gross postpaid customer additions slid 8% versus a year ago. AT&T shares were up 2% at midday.

Foreign Markets
European markets were mixed today. The FTSE 100 was up 0.4%, the Paris CAC was flat while Germany’s DAX was off 0.2%.

Asian shares were lower. The Hang Seng, Shanghai Composite and Nikkei 225 were down 0.2%, 0.9% and 1.1% respectively. 

Jeremy Glaser does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.