Stock Market News for June 04, 2015 – June 4, 2015 –

Stock Market News for June 04, 2015 – June 4, 2015 –

Benchmarks ended with modest gains on Wednesday, banking on positive economic reports and hopes of an imminent deal between Greece and its creditors. While private sector hiring picked up in May, trade deficit narrowed last month. European Central Bank’s commitment toward its bond buying program also lifted investor sentiment.

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 0.4% to close at 18,076.27. The Standard & Poor’s 500 (S&P 500) increased 0.2% to 2,114.07. The tech-laden Nasdaq Composite Index closed at 5,099.23; gaining almost 0.5%. The fear-gauge CBOE Volatility Index (VIX) declined 4.1% to settle at 13.66. A total of about 3.1 billion shares were traded on the NYSE on Wednesday. Advancers outpaced declining stocks on the NYSE. For 49% stocks that advanced, 48% declined.

Encouraging economic data had a positive impact on the broader markets on Wednesday. Private-sector job creation numbers from the Automatic Data Processing, Inc. (ADPAnalyst Report) came in a tad below estimates, but confirmed the economy is recovering. A total of 201,000 private jobs were added in May, reported ADP. This was higher than April’s upwardly revised job additions of 169,000. May’s job gains were also the most in the last four months. However, the numbers were short of market expectations, as economists were eyeing an addition of 215,000 jobs.

Private service providers added most of the jobs. The sector created 192,000 jobs, which accounts for almost 96% of total job additions. Goods producers contributed to the remaining job additions. Meanwhile, chief economist of Moody’s Analytics Mark Zandi said: “At the current pace of job growth, the economy will be back to full employment by this time next year.”

In other economic reports, the U.S. Census Bureau reported that trade deficit narrowed in April to $40.9 billion from $50.6 billion in January, more than the consensus estimate of a deficit of $43.6 billion. Exports increased $1.9 billion in April from March to $189.9 billion, its highest level this year. Imports fell $7.8 billion from March to $230.8 billion in April.

Additionally, the Fed’s Beige Book showed wages are improving across all parts of the country. Hourly wages have been rising around 2% since the end of the Great Recession. Rising wages along with decline in trade deficit indicated the economy is strengthening.

Separately, economic activity in the non-manufacturing sector lost momentum in May. According to the Institute for Supply Management Non-Manufacturing Business Survey Committee, the NMI dropped 2.1 percentage points from April’s reading to 55.7% in May. The consensus estimate had pegged the same at 57%. The Non-Manufacturing Business Activity Index also decreased 2.1 percentage points to 59.5%. However, reading above 50 showed that non-manufacturing sector is expanding.

Prospects of a deal between Greece and its creditors boosted investor sentiment. Greece’s creditors gave signs they were ready for compromise on the debt agreement to protect the country from defaulting. Greece’s Syriza party had earlier warned that the country won’t make any payment to International Monetary Fund on Jun 5, provided there is no deal within the next few days. Greece needs to pay 300 million euros to the IMF within the stipulated time frame.

Meanwhile, in response to the recent wild price swings in German bonds, European Central Bank President Mario Draghi said: “We should get used to periods of higher volatility” as these are functions of “very low levels of interest rates”. He added that that this volatility won’t compel ECB to change its policy stance. ECB’s commitment to continue with its asset purchasing program and keep interest rates unchanged was welcomed by investors.

Yesterday, 7 out of 10 sectors of the S&P 500 ended in the green. The Financial Select Sector SPDR (XLF) gained almost 0.9%, the highest among the S&P 500 sectors. Top holdings from the sector such as Wells Fargo & Company (WFCAnalyst Report), JPMorgan Chase & Co. (JPMAnalyst Report), Bank of America Corporation (BACAnalyst Report) and Citigroup Inc. (CAnalyst Report) increased 1.3%, 1%, 1.6% and 1.7%, respectively.

The Consumer Discretionary Select Sector SPDR (XLY) advanced 0.8% and was the second biggest gainer among the S&P 500 sectors. Key stocks from the sector such as The Walt Disney Company (DISAnalyst Report), The Home Depot, Inc. (HDAnalyst Report), Comcast Corporation (CMCSAAnalyst Report) and McDonald’s Corp. (MCDAnalyst Report) increased 0.4%, 1.4%, 0.9% and 0.2%, respectively.


Stock Market News for June 04, 2015 – June 4, 2015 –

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