Stock Market News for December 29, 2014 – Zacks Investment …
Benchmarks hit another record high on Friday as investors continued to cheer encouraging economic scenario on the domestic front. However, the trading volume remained low as most of investors were enjoying extended Christmas holiday. The Dow registered 38th record high and the S&P 500 posted 52nd record close on Friday, while the Nasdaq finished at the highest since Mar 2000. Benchmarks also posted solid weekly gains for the second consecutive week.
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The Dow Jones Industrial Average (DJI) gained more than 0.1% to close at 18,053.71. The Standard & Poor 500 (S&P 500) rose 0.3% to close at 2,088.77. The tech-laden Nasdaq Composite Index closed at 4,806.86; rising 0.7%. However, the fear-gauge CBOE Volatility Index (VIX) gained 0.9% to settle at 14.50. A total of about 3.06 billion shares were traded on Friday, significantly below the month-to-date average of 7.39 billion. Advancers outpaced declining stocks on the NYSE. For 64% stocks that advanced, 32% declined.
Encouraging economic growth scenario in the U.S. continued to boost investor confidence. The Dow has finished in the positive territory for seven straight trading days and also witnessed its highest seven day gains since Nov 4, 2008. The seven-day rally was also the longest streak of gains since Mar 2013. The index also had the brightest five-day rally before Christmas since 1991.
Meanwhile, the S&P 500 hit the record high for the 52nd time this year on Friday, registering the highest number of its record highs since 1995. It was also the fourth-highest number of record highs.
However, Friday’s trading volume of 3.06 billion shares was the lowest full day volume this year. Absence of a major portion of market participants was the main reason behind the light volume. Most investors were in the holiday mood as they were busy enjoying the extended Christmas holiday.
Moreover, the oil prices dropped again on Friday. The prices of WTI crude oil and Brent crude oil declined 2% and 1.3% to $54.73 per barrel and $59.45 a barrel, respectively. The decline in oil prices had a negative impact on the Energy Select Sector SPDR (XLE). The sector declined a meager 0.02% and was the only loser among the S&P 500 sectors. Key energy stocks including Marathon Oil Corporation (MRO – Analyst Report), Chesapeake Energy Corporation (CHK – Analyst Report), Chevron Corporation (CVX – Analyst Report) and Cabot Oil & Gas Corporation (COG – Analyst Report) lost 0.4%, 0.7%, 0.2% and 1.1%, respectively.
However, the Utilities Select Sector SPDR (XLU) was the biggest gainer among the S&P 500 sectors. The sector gained 1.2% on Friday. Key utilities stocks including The AES Corporation (AES – Analyst Report), DTE Energy Company (DTE – Analyst Report), Southern Company (SO – Analyst Report) and AGL Resources Inc. (GAS – Analyst Report) gained 3%, 1.6%, 1.1% and 1.7%, respectively.
This was the second-straight week in which major benchmarks finished in the green. Over the week, the Dow, S&P 500 and Nasdaq gained 1.4%, 0.9% and 0.9%, respectively. The S&P 500 ended in the positive territory in 9 out of 10 weeks, while the Nasdaq witnessed the same in 8 weeks.
The encouraging GDP data that came out last Tuesday boosted investor confidence. According to the “third” estimate by the Bureau of Economic Analysis, the third quarter output of goods and services produced by labor and property located in the United States increased at an annual rate of 5.0%, more than the consensus estimate of an increase by 4.3%.
Moreover, encouraging initial claims report and consumer sentiment data also helped benchmarks to end in the green. The University of Michigan and Thomson Reuters’ final reading of consumer sentiment was at 93.6 in December. This was more than the consensus forecast of a decrease to 93.2. Additionally, The US Department of Labor reported on Wednesday that the advance figure for seasonally adjusted initial claims were at 280,000 in the week ending Dec 20, down 9,000 from the previous week’s unrevised 289,000. This was the fourth consecutive week of declines. Moreover, initial claims are now at a seven-week low.
However, home sales data including new home sales and existing home sales were disappointing. Moreover, the oil prices continued their declining trend which had negatively impacted energy shares throughout the week.
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Stock Market News for December 29, 2014 – Zacks Investment …
