Stock Market News for January 29, 2014 – Zacks Investment Research
A more optimistic outlook on emerging markets and promising consumer data helped benchmarks rebound to a positive finish after three consecutive sessions of losses. In fact, the Dow snapped its five-day rout and was 10 points short of a 100-point gain. Pfizer’s earnings beat also helped benchmarks buck the downtrend. Investors will now closely watch what the Federal Reserve has to say after its FOMC meeting.
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The Dow Jones Industrial Average (DJI) jumped over 90 points, or 0.6%, to finish yesterday’s trading session at 15,928.56. The Standard & Poor 500 (S&P 500) too gained 0.6% to close at 1,792.50. The tech-laden Nasdaq Composite Index gained 0.4% and signed off Tuesday’s session at 4,097.96. The fear-gauge CBOE Volatility Index (VIX) dropped 9.3% to 15.80. U.S. exchanges saw about 6.6 billion shares changing hands. Advancers outpaced decliners on the New York Stock Exchange. For 73% stocks that gained, 24% ended lower.
Yesterday’s gains helped the Dow and S&P 500 erode their weekly losses. The benchmarks are now up 0.3% and 0.1%, respectively, this week. However, Nasdaq gained the least among these benchmarks yesterday and is still down 0.7% so far this week. Apple Inc. (NASDAQ:AAPL) was one of the most actively traded stocks yesterday, but Nasdaq’s biggest component largely saw a selloff. The iPhone maker saw its shares sliding roughly 8% after its earnings result failed to impress investors.
However, investors took notice of an earnings beat from Pfizer Inc. (NYSE: PFE) along with positive results from the likes of DR Horton Inc. (NYSE:DHI) and Comcast Corporation (NASDAQ:CMCSA).
Pfizer’s fourth quarter 2013 earnings of 56 cents beat consensus estimates and also improved 22% year on year. DR Horton beat consensus estimates on both counts while Comcast topped revenue estimates. Comcast also added 43,000 video subscribers compared with a net loss of 7,000 video customers in the prior-year quarter. Shares of Pfizer, DR Horton and Comcast gained 2.6%, 9.8% and 1.6%, respectively.
Investor sentiment also improved because of an increase in consumer confidence. The Conference Board said the Consumer Confidence Index had moved up to 80.7 in January from December’s reading of 77.5. The gain outpaced the consensus estimate of an improvement to 78.2. This was also the second-straight month of gain. Lynn Franco, Director of Economic Indicators at The Conference Board, said: “Consumers’ assessment of the present situation continues to improve, with both business conditions and the job market rated more favorably”.
The retail sector ended in the green with the SPDR S&P Retail ETF (XRT) settling for a 0.2% gain. Among retail stocks, Target Corp. (NYSE:TGT), Macy’s, Inc. (NYSE:M), Wal-Mart Stores Inc. (NYSE:WMT), Bon-Ton Stores Inc. (NASDAQ:BONT) and Kohl’s Corp. (NYSE:KSS) gained 0.3%, 0.5%, 0.7%, 1.0% and 1.9%, respectively.
However, the other report on new orders for manufactured durable goods was far from optimistic after new orders dropped 4.3% in December. The U.S. Census Bureau’s decline was also in sharp contrast to consensus estimate of a gain of 2%.
Markets’ northward movement was also a result of concerns over emerging markets receding. Markets were routed last week following political and economic concerns emanating from emerging markets that dragged currencies to multi-months low.
In fact, emerging-market currencies suffered their worst selloff in five years. Argentina’s peso had its worst fall since 2002. A threat to the stability of the government in Turkey has seen its currency hitting record lows of late. Separately, hryvnia, Ukraine’s currency, dropped to a four-year low. South Africa’s rand saw itself weakening beyond 11 per dollar for the first time since 2008. Benchmarks were also dented a sever blow following the report of a contraction in China’s manufacturing activity.
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Stock Market News for January 29, 2014 – Zacks Investment Research
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