Stock Market News for February 23, 2015 – Zacks Investment …
Markets rebounded on Friday to register solid gains as Eurozone’s officials approved a four-month extension to Greece’s bailout program. However, another decline in oil prices weighed on energy shares, which in turn eroded some gains. The Dow finished at a record high for the first time this year, while S&P 500 hit the same for the third time. Meanwhile, the Nasdaq finished in positive territory for the eighth-consecutive session. The benchmarks posted weekly gains for the third-straight week.
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The Dow Jones Industrial Average (DJI) gained 0.9%, or 154.67 points, to close at 18,140.44. The Standard & Poor 500 (S&P 500) rose 0.6% to 2,110.30. The tech-laden Nasdaq Composite Index closed at 4,955.97; increasing more than 0.6%. The fear-gauge CBOE Volatility Index (VIX) declined 6.5% to settle at 14.30. A total of about 6.3 billion shares were traded on Friday, below month-to-date average of 7 billion. Advancers outpaced declining stocks on the NYSE. For 66% stocks that advanced, 31% declined.
On Friday, Greece’s finance minister, Yanis Varoufakis and other Eurozone’s officials struck a deal regarding Greece’s bailout program. According to the deal, the creditors decided to give an extension of four months to Greece in order to settle a bailout of 240 billion euros. Investors welcomed the news as the agreement reduced the possibility of “Grexit”, at least for sometime.
Jeroen Dijsselbloem, chairman of the Eurozone’s finance group, said Greece had put forward its “unequivocal commitment to honor their financial obligations” to its creditors. He added that the deal was the “first step in this process of rebuilding trust.” According to the agreement, Greece received a deadline till Monday to present a list of economic reforms before its creditors that the country will opt for during the extended period. The European Commission, the European Central Bank and the International Monetary Fund will review the list and will decide whether to approve them or not.
Meanwhile, Markit’s preliminary survey report showed that business activity is recovering in the common currency bloc. The index that measures the growth of private-sector activity increased to 53.5 in February from January’s reading of 52.6, reaching its highest level in seven months. Reading above 50 indicates expansion in the sector. Investors remained optimistic about the recovery of Eurozone’s economy as the ECB’s confidence-boosting QE program gets going next month, which will flush the region with fresh liquidity and help prop growth.
On the domestic front, Markit’s PMI index for the U.S. rose to 54.3 in February from 53.9 in January. The report said: “February data indicated a sustained improvement in U.S. manufacturing business conditions.” However, the repot added: “Some firms suggested that weaker demand for oil and energy infrastructure projects had weighed on new business intakes.”
Separately, shares of Nordstrom Inc. (JWN – Analyst Report) jumped 6% after announcing fourth quarter revenues of $4,043 million, beating the Zacks Consensus Estimate of $4,018 million. Revenues also increased 9% year over year. However, the company’s fourth-quarter earnings of $1.32 per share were down 3.6% from the prior-year quarter figure of $1.37 and came in below the Zacks Consensus Estimate of $1.35.
Moreover, Intuit Inc.’s (INTU – Snapshot Report) shares gained 6.2% after posting second quarter fiscal 2015 adjusted loss per share of 19 cents, narrower than the Zacks Consensus Estimate of a loss of 26 cents. Intuit’s revenues rose 3.3% year on year to $808 million and ahead of the Zacks Consensus Estimate of $784 million.
However, the price of WTI crude oil declined 1.6% to $50.34 on Friday. The drop in oil price had a negative impact on the Energy Select Sector SPDR (XLE). The sector declined 0.5% and was the only loser among the S&P 500 sectors. Key energy stocks including EOG Resources, Inc. (EOG – Analyst Report), Halliburton Company (HAL – Analyst Report), Baker Hughes Incorporated (BHI – Analyst Report) and Schlumberger Limited (SLB – Analyst Report) lost 2.9%, 2%, 1.2% and 1.3%, respectively.
Over the week, the Dow, S&P 500 and Nasdaq gained 0.7%, 0.6% and 1.3%, respectively.
Encouraging earnings results including The Goodyear Tire & Rubber Company (GT – Analyst Report), Medtronic plc (MDT – Analyst Report), Hormel Foods Corporation (HRL – Analyst Report), T-Mobile US, Inc. (TMUS – Snapshot Report) and The Priceline Group Inc. (PCLN – Analyst Report) had a positive impact on the benchmarks.
However, slump in oil prices continued to dent investor sentiment. Moreover, Greek concerns and debate regarding hiking interest rate dampened investor confidence. Fed minutes, released last Wednesday, showed that while “many” officials said premature rise in interest rates will hamper U.S. economic recovery, “several” officials opined delaying the same will result in high inflation.
Meanwhile, most of the economic data on domestic front including Empire State Manufacturing Survey Index, NAHB/Wells Fargo Housing Market index, Producer Price Index, Philadelphia Federal Reserve’s manufacturing index and housing starts were disappointing.
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Stock Market News for February 23, 2015 – Zacks Investment …
