Stock Market News for February 05, 2015 – February 5, 2015 – Zacks …
Benchmarks finished mostly lower on Wednesday after the ECB refused to accept Greek bonds as collateral for central bank loans. Meanwhile, oil prices snapped a four-session winning streak and settled in the red, hurting energy shares. The S&P 500 and the Nasdaq snapped their two day rally. However, the Dow was able to end in positive territory banking on Walt Disney’s upbeat quarterly results.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) gained a meager 0.04%, to close at 17,673.02. The Standard & Poor 500 (S&P 500) lost 0.4% to close at 2,041.51. The tech-laden Nasdaq Composite Index closed at 4,716.70; declining 0.2%. The fear-gauge CBOE Volatility Index (VIX) went up 5.8% to settle at 18.33. A total of about 7.8 billion shares were traded on Wednesday, below last five sessions’ average of 8.1 billion. Decliners outpaced advancing stocks on the NYSE. For 63% stocks that declined, 34% advanced.
The ECB cancelled its acceptance of junk rated Greek government debts as security for regular central bank loans. The move has put immense pressure on the Greek government to come to terms with its international creditors over the country’s debt obligations. However, the ECB’s emergency lending program will still allow Greek banks access to funds. The Greek central bank will have to bear the credit risk of the loan with a higher interest rate. On Tuesday, the Greek government wanted to ease the country’s stringent $272 billion bailout conditions.
Meanwhile, the prices of WTI crude oil plunged 9.5% to $48.45 per barrel. Additionally, Brent crude oil decreased 6.9% to settle at $54.16 a barrel. Oil prices dropped sharply after the U.S. Energy Information Administration declared crude stockpiles increased by 6.3 million barrels for the week ending Jan 30. This was significantly more than analysts’ expectation of a rise by 2.8 million barrels.
The Energy Select Sector SPDR (XLE) declined almost 1.7%, the highest among the S&P 500 sectors. Dow components Exxon Mobil Corporation (XOM – Analyst Report) and Chevron Corporation (CVX – Analyst Report) dropped 0.9% and 1.1%, respectively. Other key stocks from the sector including Schlumberger Limited (SLB – Analyst Report), Kinder Morgan, Inc. (KMI – Analyst Report), ConocoPhillips (COP – Analyst Report) and EOG Resources, Inc. (EOG – Analyst Report) decreased 2.9%, 1.6%, 2.8% and 1.2%, respectively.
Bio-tech shares also declined on Wednesday. Shares of drugmaker, Gilead Sciences Inc. (GILD – Analyst Report) plummeted 8.2% after the company offered more than expected discount on its hepatitis C virus drugs. However, the company posted fourth-quarter earnings of $2.38 per share, more than the Zacks Consensus Estimate of $2.27. Gilead turned out to be the biggest drag on the S&P 500 and the Nasdaq.
Meanwhile, the Dow eked out gains banking on positive quarterly results by The Walt Disney Company (DIS – Analyst Report). Walt Disney’s shares climbed 7.6% after the company reported first-quarter fiscal 2015 earnings per share of $1.27 that beat the Zacks Consensus Estimate of $1.08.
Shares of General Motors Company (GM – Analyst Report) also surged 5.4% after the company recorded adjusted earnings of $1.19 per share in the fourth quarter of 2014, beating the Zacks Consensus Estimate of 85 cents. Further, the car maker said it intends to raise its dividend on common shares by 20% to 36 cents per share starting in the second quarter.
In deal news, Staples, Inc. (SPLS – Analyst Report) agreed to acquire Office Depot, Inc. (ODP – Analyst Report) at $6.3 billion. Both the companies taken together have about 4,000 stores and yearly sales of more than $35 billion. While, shares of Staples plunged almost 12%, shares of Office Depot gained 2.2%.
On the economic front, the national employment report from Automatic Data Processing, Inc. (ADP – Analyst Report) showed private sector hiring slowed in January. According to the report, 213,000 private jobs were added in January. This was lower than expectations of 220,000 job additions. The figure was also less than December’s upwardly revised figure of 253,000. January’s job additions were also the lowest since September 2014.
Separately, the ISM Services Index increased marginally to 56.7 in January from 56.5 in December. The reading was also more than the consensus estimate of 56.4.
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Stock Market News for February 05, 2015 – February 5, 2015 – Zacks …
