Stock Market News for February 09, 2015 – February 9, 2015 – Zacks …

Stock Market News for February 09, 2015 – February 9, 2015 – Zacks …

Benchmarks ended in the red on Friday after fresh concerns about Greece’s debt negotiations offset encouraging job report. Meanwhile, rise in possibility of rate hike in mid-2015 due to improving labor market conditions dented investor sentiment. However, markets ended the week in positive territory despite Friday’s losses.

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) declined more than 0.3% to close at 17,824.29. The Standard & Poor 500 (S&P 500) also lost 0.3% to close at 2,055.47. The tech-laden Nasdaq Composite Index closed at 4,744.40; decreasing 0.4%. The fear-gauge CBOE Volatility Index (VIX) rose 2.6% to settle at 17.29. A total of about 7.7 billion shares were traded on Friday, below last five sessions’ average of 7.9 billion. Decliners outpaced advancing stocks on the NYSE. For 61% stocks that declined, 36% advanced.

The U.S. Department of Labor reported that the U.S. economy has created 257,000 new jobs in January, beating the consensus estimate of 234,000. This was the 11th consecutive month in which the economy generated more than 200,000 jobs, its longest such stretch since 1994. Also, the job additions for November and December were revised upward from 353,000 and 252,000 to 423,000 and 329,000, respectively. November’s tally was the highest since May 2010.

Additionally, the average hourly earnings increased 0.5%, or 12 cents, to $24.75 in January, stronger than the consensus estimate of 0.3% gain. Year-on-year growth in average hourly wages came in at 2.2% in January. Meanwhile, the unemployment rate increased marginally to 5.7% in January from December’s rate of 5.6%, mainly due to rise in labor participation rate. The retail trade sector emerged as the biggest recruiter in January as the sector added 46,000 new jobs.

However, it was reported that the Eurozone’s officials asked Greek government to apply for an extension of its bailout program by Feb 16. The current bailout program valued at $275-billion will expire on Feb 28. It has been speculated that if the Greek government fails to meet the deadline then the country may face a default which may result inGreece’s exit from the Eurozone. On Wednesday, the European Central Bank (ECB) cancelled its acceptance of junk rated Greek government debts as security for regular central bank loans.

Moreover, Jeroen Dijsselbloem, chairman of the Eurogroup which represents a committee of euro zone’s finance ministers, said: “We will hear on Wednesday from the new Greek government what their ambitions are, how they want to move forward with the current program.” He added: “When we set the date for the 16th of February for the Eurogroup we did look at that. Time will become very short if they (Greece) won’t ask for an extension (by then).”

Separately, investors anticipated that the Fed is on track to raise key interest rate by mid-2015 as strong job data indicated that labor market is recovering at an impressive pace. It is speculated that strong job report will boost the Fed’s confidence to start the tightening cycle that it has been guiding investors towards for quite some time. Rising fears regarding interest rate hike also dragged down benchmarks on Friday.

Rising rate hike fears had a negative impact on the Utilities Select Sector SPDR ETF (XLU) which lost 4.1% on Friday, emerging as the biggest decliner. This was also its biggest one-day loss since Aug 2011. Key utilities stocks including Entergy Corporation (ETRAnalyst Report), Ameren Corporation (AEEAnalyst Report), DTE Energy Company (DTEAnalyst Report) and Exelon Corporation (EXCAnalyst Report) declined 4.8%, 5%, 4.8% and 4.4%, respectively.

On earnings front, shares of Twitter, Inc. (TWTRAnalyst Report) jumped 16.4% after posting fourth quarter loss of 15 cents per share, narrower than the Zacks Consensus Estimate of a loss of 21 cents. Also, revenues soared 97% year over year to $479 million, which comfortably beat the Zacks Consensus Estimate of $451 million. Moreover, LinkedIn Corporation’s (LNKDAnalyst Report) shares surged 10.7% after announcing fourth quarter adjusted earnings per share of 12 cents, higher than the Zacks Consensus Estimate of 3 cents.

However, shares of Expedia Inc. (EXPEAnalyst Report) plunged 11.5% after reporting fourth-quarter earnings of 78 cents per share, missing the Zacks Consensus by 9.3%. Also, revenue for the quarter declined 20.8% sequentially to $1.36 billion. Expedia was the worst performer among the S&P 500 companies on Friday.

Meanwhile, Harris Corporation’s (HRSAnalyst Report) shares gained 9.6% after announcing that it will buy Exelis, Inc. (XLSSnapshot Report) in a cash and stock deal valued at approximately $4.75 billion ($23.75 per share). The offer price represents a premium of approximately 34% to Exelis’ closing price on Feb 5. Harris was the biggest gainer among the S&P 500 companies. Shares of Exelis surged 36.3% following the news.

Over the week, the Dow, S&P 500 and Nasdaq gained 3.8%, 3% and 2.4%, respectively.

Markets ended with solid weekly gains as increase in oil prices except from Wednesday boosted energy shares. Moreover, encouraging earnings results, merger and acquisition (M&A) news and auto sales data also helped benchmarks to end in positive territory. However, concern about Greece’s debt negotiation offset some of the gains.

Earnings results including The Walt Disney Company (DISAnalyst Report), General Motors Company (GMAnalyst Report), O’Reilly Automotive Inc. (ORLYAnalyst Report) and The Estée Lauder Companies Inc. (EL) came out positive. Moreover, M&A news which includes that between Pfizer Inc. (PFE) and Hospira Inc. (HSP), and Staples, Inc. (SPLS) and Office Depot, Inc. (ODP) boosted investor sentiment. Moreover, domestic-made vehicle sales climbed to an annualized rate of 13.5 million banking on increase in demand for trucks and sport-utility vehicles.

However, economic data including factory orders, ISM Manufacturing Index and initial claims numbers came out disappointing.

Link: 

Stock Market News for February 09, 2015 – February 9, 2015 – Zacks …

Share this post