Stock Market News for April 07, 2014 – April 7, 2014 – Zacks.com
Benchmarks ended in the red zone, dragged down by declines in momentum and bio-tech stocks. The day’s initial gains, largely a result of encouraging monthly jobs data, were eroded by the end of the trading session. The S&P 500 and Dow ended in the negative territory after reaching intraday all-time highs. Also, selling pressure in technology stocks dragged the Nasdaq down to its lowest point since February.
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The Dow Jones Industrial Average (DJI) dropped 0.9% to close Friday’s trading session at 16,412.71. The Standard & Poor (S&P 500) fell 1.3% to finish at 1,865.09. The tech-laden Nasdaq Composite Index plunged 2.6% to 4,127.73. The fear-gauge CBOE Volatility Index (VIX) moved up 4.4% to settle at 13.96. Total volume on the New York Stock Exchange was 3.6 billion shares. Advancing stocks were outnumbered by declining stocks on the NYSE. For 34% stocks that advanced, 63% declined.
Benchmarks gave away all their initial gains on Friday due to the selloff in momentum stocks Shares of momentum stocks such as social media giant Facebook, Inc. (NASDAQ:FB), electric car maker Tesla Motors, Inc. (NASDAQ:TSLA) and Internet radio service provider Pandora Media, Inc. (NYSE:P) plunged 4.6%, 5.9% and 4.9%, respectively.
High-growth stocks from the Consumer Discretionary sector such as online retailer Amazon.com Inc. (NASDAQ:AMZN), online movie rental company Netflix, Inc. (NASDAQ:NFLX) and online travel company TripAdvisor Inc. (NASDAQ:TRIP) also plummeted; losing 3.2%, 4.9% and 6.1%, respectively. Overall, the Consumer Discretionary Select Sector SPDR (XLY) fell 1.7%.
Bio-tech stocks too dragged the markets down. Shares of bio-tech companies such as Biogen Idec Inc. (NASDAQ:BIIB), Gilead Sciences Inc. (NASDAQ:GILD), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and Amgen Inc. (NASDAQ:AMGN) decreased 4.5%, 2.4%, 4.8% and 4.0%, respectively. Overall, the Health Care Select Sector SPDR (XLV) decreased 1.7%.
The rise in total nonfarm payroll jobs had helped benchmarks open higher. The U.S. Bureau of Labor Statistics said total nonfarm payroll employment had risen to 192,000 in March. All the industries added to the payroll except manufacturing. Investors also focused on the other part of the data that showed unemployment rate staying flat at 6.7%. The unemployment rate remained flat due to a surge in people entering the labor force.
Meanwhile, the construction sector added 19,000 jobs over the month, following a 18,000 increase in February. The strong showing of the construction sector was greeted warmly as it suggested harsh winter weather conditions had lesser than expected impact on job creation.
For the week, the S&P 500 rose 0.4% and the Dow ended higher by 0.5%. The tech-heavy Nasdaq Composite Index dropped 1.6%, its second weekly loss in a row.
Benchmarks had commenced the week on an upbeat note. The Federal Reserve Chairwoman Janet Yellen’s comment that the central bank will maintain its “extraordinary commitment” to support the economy for some more time had helped benchmarks at the beginning of the week. The bullish mood was supported by encouraging manufacturing data and better-than-expected new-vehicle sales for March.
This was followed by Wednesday’s encouraging private-sector hiring numbers and increase in factory orders for the month of February. However, benchmarks ended lower on Thursday as investors adopted a cautious approach ahead of Friday’s nonfarm payroll data. Also, declines in bio-tech and momentum stocks had a negative impact on the Nasdaq Composite Index.
Coming back to Friday, 9 out of 10 sectors of the S&P 500 ended in the red. The Technology Select Sector SPDR (XLK) led the decline as the sector fell 1.9%. Top holdings from the sector such as Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Verizon Communications Inc. (NYSE:VZ) and International Business Machines Corporation (NYSE:IBM) decreased 1.3%, 4.7%, 2.8%, 0.2% and 0.5%, respectively.
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Stock Market News for April 07, 2014 – April 7, 2014 – Zacks.com
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