Stock Market News for July 31, 2014 – Zacks Investment Research
Second quarter GDP gained momentum, fuelled by improved consumer spending. Real personal consumption expenditure accelerated in spring by 2.5% following a 1.2% increase in the first quarter.
In addition to this, growth was boosted by a pickup in construction spending, increased business spending on equipment, a bigger buildup in inventories and slightly higher government spending.
This rise in second quarter GDP was in sharp contrast to first quarters’ decline in real GDP by 2.1%. First quarter GDP was revised from an earlier estimate of a decline by 2.9%. The US economy had contracted in the first quarter for the first time in three years. Harsh winter weather was cited for hampering business operations and slowing down construction.
Separately, the national employment report from Automatic Data Processing, Inc. (ADP – Analyst Report) showed private sector hiring dropped in July to 218,000 from June’s figure of 281,000. However, private sector hiring numbers remained above the key figure of 200,000 for the fourth straight month.
Hiring was also broad-based, with small businesses adding 84,000 private-sector jobs, medium businesses adding 92,000 and large businesses adding 41,000.
The ADP report on private-sector hiring came ahead of the U.S. Bureau of Labor Statistics’ nonfarm payroll data for July, scheduled to be released on Friday. Analysts are expecting an addition of 230,000 nonfarm payroll jobs.
Bio-tech stocks helped the Nasdaq end in the green once again. Shares of Amgen Inc. (AMGN – Analyst Report) surged 5.4% after the company posted second quarter 2014 earnings of $2.37 per share, well above the Zacks Consensus Estimate of $1.99. Including one-time items, second quarter earnings increased 22% to $2.01 per share. Moreover, Amgen increased its 2014 revenue guidance to the range of $8.20 – $8.40 per share from previous projection of $7.90 – $8.20 per share. The company plans to cut its headcount by 12-15% and shut down facilities in two states.
Other bio-tech stocks such as Gilead Sciences Inc. (GILD – Analyst Report), Biogen Idec Inc. (BIIB – Analyst Report), Regeneron Pharmaceuticals, Inc. (REGN – Analyst Report) and Celgene Corporation (CELG – Analyst Report) increased 0.9%, 0.8%, 5.8% and 0.7%, respectively.
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Stock Market News for July 31, 2014 – Zacks Investment Research
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