Stock Market News for March 02, 2015 – March 2, 2015 – Zacks.com
Benchmarks ended Friday’s trading session in the red as investors weighed positive housing and consumer confidence data against slowdown in the U.S. economic growth. However, benchmarks were able to post their biggest monthly percentage gains in more than two years in February. Strong earnings results by retailers and tech companies, firming up of oil prices, and easing concerns in the Eurozone helped benchmarks register solid gains in February.
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The Dow Jones Industrial Average (DJI) lost nearly 0.5% to close at 18,132.70. The Standard & Poor’s 500 (S&P 500) declined 0.3% to 2,104.50. The tech-laden Nasdaq Composite Index closed at 4,963.53; decreasing 0.5%. The fear-gauge CBOE Volatility Index (VIX) dropped 4.1% to settle at 13.34. A total of about 3.5 billion shares were traded on NYSE on Friday. Advancers outpaced declining stocks on the NYSE. For 50% stocks that advanced, 47% declined.
Benchmarks ended the last trading day of February in the red amid mixed economic data and increase in oil prices. The U.S. economy expanded at a slower pace in the fourth quarter of 2014 than previously forecasted. According to the “second” estimate by the Bureau of Economic Analysis, the fourth quarter output of goods and services increased at an annual rate of 2.2%, less than the “advance” estimate of a rise by 2.6%. However, this rise in fourth quarter GDP was more than the consensus estimate of an increase by 2%. The third quarter growth in real GDP was 5%.
Decrease in business and government spending along with trade gap resulted in downward revision in the fourth quarter GDP. Companies also stockpiled goods at a slower pace than government’s previous report. However, real personal consumption expenditure, which accounts for almost two-third of the U.S. economy, accelerated 4.2% in the fourth quarter, its fastest pace since early 2006.
Chicago PMI numbers touched its lowest level since Jul 2009. The Supply Management-Chicago noted that Chicago Business Barometer went down to 45.8 in February from January’s reading of 59.4. This decrease in the Chicago Purchasing Managers Index in February was more than the Zacks Consensus Estimate of a decrease to 57.8.
Separately, the University of Michigan and Thomson Reuters’ final reading of consumer sentiment was at 95.4 in January. This was more than the consensus forecast of an increase to 93.8.
Meanwhile, the National Association of Realtors reported that Pending Home Sales Index went up 1.7% to 104.2 in January, its highest level since Aug 2013. The rise in pending home sales in January was more than the consensus expectation of a 1.6% increase.
Oil prices moved north on Friday banking on improving demand outlook and supply disruptions. The prices of WTI crude oil and Brent crude oil gained 3.2% and 4% to $49.76 per barrel and $62.58 a barrel, respectively. Brent crude oil reported a gain of 18% in February, its biggest monthly percentage gain since May 2009. Brent crude oil also posted its first monthly gain in February since Jun 2014. However, the Energy Select Sector SPDR (XLE) declined 0.4%. Dow components Exxon Mobil Corporation (XOM – Analyst Report) and Chevron Corporation (CVX – Analyst Report) dropped 0.1% and 0.4%, respectively. Among other key stocks from the sector, both EOG Resources, Inc. (EOG – Analyst Report) and Kinder Morgan, Inc. (KMI – Analyst Report) decreased 0.5%.
The Health Care Select Sector SPDR (XLV) was the biggest loser among the S&P 500 sectors. The sector declined 0.5%. Top holdings from the sector including Johnson & Johnson (JNJ – Analyst Report), Pfizer Inc. (PFE – Analyst Report), Merck & Co. Inc. (MRK – Analyst Report) and Gilead Sciences Inc. (GILD – Analyst Report) decreased 0.3%, 0.8%, 0.7% and 0.6%, respectively. Overall, 8 out of 10 sectors of the S&P 500 ended in the red.
In consumer discretionary space, The Gap, Inc. (GPS – Analyst Report) posted fourth-quarter fiscal 2014 earnings of 75 cents a share that came a penny ahead of the Zacks Consensus Estimate. On the other hand, J. C. Penney Company, Inc. (JCP – Analyst Report) reported quarterly loss of 19 cents per share in contrast to the Zacks Consensus Estimate of earnings of 14 cents per share. While shares of Gap went up 3.1%, shares of J. C. Penney plunged 6.8%.
In consumer staples space, Monster Beverage Corporation (MNST – Analyst Report) reported fourth-quarter 2014 adjusted earnings of 72 cents per share that beat the Zacks Consensus Estimate of 59 cents. Shares of Monster Beverage surged 13.1%. However, shares of Herbalife Ltd. (HLF – Snapshot Report) plummeted 10.9% despite posting fourth-quarter adjusted earnings of $1.41 per share, which beat the Zacks Consensus Estimate of $1.16.
For the week, the S&P 500 declined 0.3% and the Dow dropped a meager 0.04%. However, the Nasdaq posted a weekly gain of almost 0.2%. Benchmarks ended mostly in negative territory for the week after decline in oil prices affected energy shares. A drop in consumer price index and increase in initial claims also dented investor sentiment.
Meanwhile, decline in Apple Inc.’s (AAPL) shares and dismal earnings results from Hewlett-Packard Company (HPQ) dragged down technology shares on Wednesday. However, technology shares bounced back on Thursday boosted by Avago Technologies Limited’s (AVGO) encouraging deal news and strong earnings results from salesforce.com, inc. (CRM). Among the other positives, gains in The Home Depot, Inc. (HD), First Solar, Inc. (FSLR) and Toll Brothers Inc. (TOL) boosted markets on Tuesday.
For the month, the S&P 500 gained 5.5%, its best monthly gain since Oct 2011. The Dow also gained 5.6%, its best monthly gain since Jan 2013. The Nasdaq too posted a monthly gain of 7.1%. Benchmarks settled in the green for the month after an agreement on Greece’s bailout program boosted investor sentiment.
Moreover, encouraging earnings results from Cisco Systems, Inc. (CSCO), TripAdvisor Inc. (TRIP), Pepsico, Inc. (PEP), The Coca-Cola Company (KO), Mondelez International, Inc. (MDLZ), The Goodyear Tire & Rubber Company (GT), Medtronic plc (MDT), Hormel Foods Corporation (HRL), T-Mobile US, Inc. (TMUS), The Priceline Group Inc. (PCLN), The Walt Disney Company (DIS), General Motors Company (GM), O’Reilly Automotive Inc. (ORLY) and The Estée Lauder Companies Inc. (EL) helped markets register solid gains. Additionally, deal news between Pfizer Inc. (PFE – Analyst Report) and Hospira Inc. (HSP), and Staples, Inc. (SPLS) and Office Depot, Inc. (ODP) had a positive impact on investor sentiment.
Meanwhile, Fed minutes, 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. Fed chairwoman Janet Yellen said the Fed policy statement may soon remove the word “patient” from its policy statement. However, this does not imply the Fed will raise interest rate immediately. Fed will evaluate economic conditions before considering a rate hike. She added the central bank is looking to retain flexibility to make such a decision “on a meeting-by-meeting basis.”
Stock Market News for March 02, 2015 – March 2, 2015 – Zacks.com