Stock Market News for February 13, 2015 – Zacks Investment …
Benchmarks ended in the green on Thursday after a ceasefire agreement between Russia and Ukraine boosted investor confidence. Moreover, encouraging earnings results including those from Cisco and TripAdvisor helped markets register solid gains. A rally in oil prices also boosted energy shares. However, disappointing economic data on the domestic front eroded some of the day’s gains. The Nasdaq reached its highest level since 2000, while the S&P 500 reached its highest point in 2015 till date.
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 0.6%, or 110.24 points, to close at 17,972.38. The Standard & Poor 500 (S&P 500) rose almost 1% to 2,088.48. The tech-laden Nasdaq Composite Index closed at 4,857.61; increasing 1.2%. The fear-gauge CBOE Volatility Index (VIX) declined 9.6% to settle at 15.34. A total of about 3.8 billion shares were traded on NYSE on Thursday. Advancers outpaced declining stocks on the NYSE. For 75% stocks that advanced, 22% declined.
On Thursday, investors were enthused by news that Russia and Ukraine have reached a ceasefire agreement in a meeting at Belarus in order to stop violence in Ukraine. The two nations agreed to enforce the agreement from Sunday. Following the meeting, Vladimir Putin, president of Russia, announced: “We have agreed on a ceasefire from midnight 15 February…There is also the political settlement…Finally there are a whole range of economic and humanitarian issues.”
Germany’s Chancellor Angela Merkel and French President Francois Hollande arranged the meeting with Ukraine’s President Petro Poroshenko and Russia’s Vladimir Putin at Belarus in order to settle this long lasting crisis. Angela Merkel said: “We now have a glimmer of hope… there is very, very much work still to do.”
However, the lack of any agreement in Wednesday’s EU meeting on Greece came as a disappointment. On Wednesday, Greek Finance Minister Yanis Varoufakis held a meeting with Eurozone’s finance ministers in Brussels to discuss the bailout program. However, a solution to the impasse could not be achieved. Reportedly, Eurozone’s finance ministers are scheduled to meet again on Monday for further discussions on the issue. Jeroen Dijsselbloem, chairman of the Eurogroup, who also chaired the meeting at Brussels said: “We explored a number of issues, one of which was the current programme… We discussed the possibility of an extension. For some that is clear that is preferred option but we haven’t come to that conclusion as yet. We will need a little more time.”
On earnings front, TripAdvisor Inc.’s (TRIP – Analyst Report) shares surged 22.5% after reporting fourth quarter revenues of $288.0 million, outpacing the Zacks Consensus Estimate of $285.0 million. Quarterly revenues also increased 35.2% from the year-ago period. Solid growth in revenues in the fourth quarter was driven by strength in click-based advertising and display-based advertising business. TripAdvisor was the biggest gainer among the S&P 500 companies.
Shares of International Flavors & Fragrances Inc. (IFF – Analyst Report) jumped 7.3% after declaring fourth quarter adjusted earnings per share of $1.07, higher than the Zacks Consensus Estimate of $1.03. International Flavors & Fragrances’ encouraging earnings report boosted the Materials Select Sector SPDR (XLB) yesterday. The sector rose 1.7% and was the biggest gainer among the S&P 500 sectors.
Moreover, shares of Cisco Systems, Inc. (CSCO – Analyst Report) climbed 9.4% after announcing second-quarter fiscal 2015 earnings of 50 cents, beating the Zacks Consensus Estimate of 45 cents. The company also reported quarterly revenues of $11.9 billion, ahead of the Zacks Consensus Estimate of $11.77 billion. Cisco now expects third quarter non-GAAP earnings per share between 51 and 53 cents, compared to the current Zacks Consensus Estimate of 47 cents.
Meanwhile, Apple Inc.’s (AAPL – Analyst Report) shares continued its rally on Thursday by gaining 1.3% after activist investor Carl Icahn said the tech giant’s shares should be priced at $216 per share, which is significantly higher than Thursday’s closing price of $126.46. He said: “When a company’s future earnings are expected to grow at a much faster rate than that of the S&P 500, the market should value that company at a higher P/E multiple.”
Upbeat earnings results from Cisco and rally in Apple’s shares boosted technology shares on Thursday. Key technology companies including Google Inc. (GOOGL – Analyst Report), Yahoo! Inc. (YHOO – Analyst Report), Intel Corporation (INTC – Analyst Report) and Amazon.com Inc. (AMZN – Analyst Report) gained 1.5%, 2.3%, 1.7% and 0.5%, respectively.
Additionally, shares of Expedia Inc. (EXPE – Analyst Report) gained 14.5% after entering into an agreement to acquire rival Orbitz Worldwide, Inc. (OWW – Snapshot Report) for $1.6 billion, or $12 per share. Expedia’s offer reflects a 29% premium to Orbitz average share price for the last five trading days.
Separately, the prices of WTI crude oil and Brent crude oil rebounded yesterday to gain 4.6% and 4.2% to $51.21 per barrel and $57.05 a barrel, respectively. Increase in oil prices helped the Energy Select Sector SPDR (XLE) to post solid gains of 1.3% on Thursday. Key energy stocks including Exxon Mobil Corporation (XOM – Analyst Report), Schlumberger Limited (SLB – Analyst Report), Halliburton Company (HAL) and EOG Resources, Inc. (EOG) rose 2%, 1.5%, 1.5% and 1.7%, respectively.
However, the U.S. Department of Commerce reported that retail sales declined 0.8% in January, wider than the consensus estimate of 0.4% drop. The decline was preceded by 0.9% drop in December. Meanwhile, the U.S. Department of Labor reported that in the week ending Feb 07, jobless claims increased 25,000 from previous week’s level to 304,000. The tally was also higher than the consensus estimate of 294,000.
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Stock Market News for February 13, 2015 – Zacks Investment …
