Stock Market News for August 12, 2014 – Zacks Investment Research
Benchmarks ended in the green yesterday following hopes that tensions between Russia and Ukraine would recede. Encouraging corporate news, ceasefire agreement in Gaza and subdued Chinese inflation data also boosted the markets.
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The Dow Jones Industrial Average (DJI) rose 0.1%, to close at 16,569.98. The Standard & Poor 500 (S&P 500) increased 0.3% to close at 1,936.92. The tech-laden Nasdaq Composite Index closed at 4,401.33; rising 0.7%. The fear-gauge CBOE Volatility Index (VIX) declined 9.8% to settle at 14.23. A total of 4.7 billion shares were traded on Monday, lower than the five-day average of 6.1 billion. Advancers outpaced declining stocks on the NYSE. For 71% stocks that advanced, 26% declined.
Investors were encouraged by news that Russia will collaborate with Red Cross to send humanitarian aid to Ukraine. On Monday, Russian President Vladimir Putin said Ukraine will receive humanitarian aid under the supervision of Russia. According to the Associated Press, the aid will also be supported by the U.S. This may temporarily end aggression between Ukrainian forces and pro-Russian separatists.
However, NATO chief Anders Fogh Rasmussen warned Russia may intervene militarily in Ukraine using humanitarian aid as a ruse. Ukraine’s military spokesman Andriy Lysenko said Russia has built up 45,000 troops along the Ukrainian border. This includes tanks, missile systems, warplanes and attack helicopters.
Markets also moved higher following news that Israel and the Palestinians accepted the Egyptian proposal of ceasefire for 72 hours. U.S. President Barack Obama said on Saturday that the U.S. has successfully destroyed the arms of the Islamic State in Iraq and Syria (ISIS) militants. However, he said that the crisis is not yet over.
Encouraging inflation data in China also lifted the markets. China reported that the inflation rate remained at 2.3% in July, lower than their target of 3.5% for the year. This provides the central bank with greater flexibility relating to monetary policy.
In corporate news, shares of Kinder Morgan, Inc. (KMI – Analyst Report) soared 9% after announcing that it will bring all its oil and gas pipeline and storage companies under one roof. Kinder Morgan will combine all of Kinder Morgan Energy Partners LP (KMP – Analyst Report), Kinder Morgan Management LLC (KMR – Snapshot Report) and El Paso Pipeline Partners LP (EPB – Snapshot Report) in a series of cash and stock deals. Kinder Morgan will pay around $40 billion in stock and $4 billion in cash. It will also retain $27 billion worth of debt, taking the value of the deal close to $70 billion. Kinder Morgan was the biggest advancer among the S&P 500 components.
The Priceline Group Inc. (PCLN – Analyst Report) reported second quarter earnings per share of $12.51, beating the Zacks Consensus Estimate of $11.34. The company also reported that revenues surged 26% from the year-ago quarter. Priceline Group’s shares rose 2.2%.
Chiquita Brands International Inc.’s (CQB – Snapshot Report) shares surged 30.2% on news that Brazilian investment company Safra Group and Cutrale Group have offered to acquire the company in an all cash deal worth $13 per share. This was the biggest intra-day gain for the company since its debut in 2002.
The Consumer Staples Select Sector SPDR (XLP) was the biggest gainer among the S&P 500 sectors. The sector gained 0.7%. Key consumer staples stocks from the sector such as Keurig Green Mountain, Inc. (GMCR – Analyst Report), The J. M. Smucker Company (SJM – Analyst Report), Pepsico, Inc. (PEP – Analyst Report) and The Kroger Co. (KR – Analyst Report) increased 2%, 1.2%, 1.7% and 1.7%, respectively. Out of 10 S&P 500 sectors, 7 sectors registered gain on Monday.
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Stock Market News for August 12, 2014 – Zacks Investment Research
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