Stock Market News for March 03, 2015 – March 3, 2015 – Zacks.com
Nasdaq closed above the 5000 mark for the first time since Mar 2000 boosted by a new deal in technology sector. The Dow and the S&P 500 also touched record highs as the US economy is seen to be gradually picking pace. Markets ended in the green, despite reports of slowdown in manufacturing activity and consumer spending. Meanwhile, interest cuts in China also drove benchmarks higher on Monday.
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 almost 0.9% to close at 18,288.63. The Standard & Poor 500 (S&P 500) advanced 0.6% to 2,117.39. The tech-laden Nasdaq Composite Index closed at 5,008.10; gaining 0.9%. The fear-gauge CBOE Volatility Index (VIX) dropped 2.3% to settle at 13.04. A total of about 6.4 billion shares were traded on Monday, higher than last five sessions’ average of 6.3 billion. Advancers outpaced declining stocks on the NYSE. For 58% stocks that advanced, 39% declined.
VIX dropped on Monday and closed at its lowest level this year. VIX has shaved more than 30% over the last month when benchmarks moved higher to post their biggest monthly percentage gains in more than two years. The fear-gauge index has an inverse relationship with the markets.
The Nasdaq closed above the key 5000 level for the first time since the dot-com bubble in 2000. A new deal among chipmakers boosted the tech-heavy index yesterday. NXP Semiconductors NV (NXPI – Snapshot Report) agreed to buy Freescale Semiconductor, Ltd. (FSL – Snapshot Report) for $11.8 billion in cash and stock. Shares of NXP Semiconductors and Freescale Semiconductor soared 17.3% and 11.8%, respectively.
Among other deals, Hewlett-Packard Company (HPQ – Analyst Report) agreed to acquire Aruba Networks, Inc. (ARUN – Snapshot Report) for about $2.7 billion in cash. This will turn out to be the biggest deal for Hewlett-Packard since 2011. Separately, Cardinal Health, Inc. (CAH – Analyst Report) announced that the company will acquire Johnson & Johnson’s (JNJ – Analyst Report) Cordis business for $1.94 billion in cash. While, shares of Hewlett-Packard, Cardinal Health and Johnson & Johnson went up 0.2%, 1.7% and 0.7%, respectively, shares of Aruba Networks dropped 0.6%.
The S&P 500 closed at a record high for the fifth time this year. The Consumer Discretionary Select Sector SPDR (XLY) led the gains among the S&P 500 sectors. The sector advanced 1.2%. Key stocks from the sector including Macy’s, Inc. (M – Analyst Report), Amazon.com Inc. (AMZN – Analyst Report), McDonald’s Corp. (MCD – Analyst Report) and The Priceline Group Inc. (PCLN – Analyst Report) rose 0.3%, 1.5%, 1.1% and 0.9%, respectively.
On the other hand, the Utilities Select Sector SPDR (XLU) dropped 1.9%, the highest among the S&P 500 sectors. Key utilities stocks including Duke Energy Corporation (DUK – Analyst Report), NextEra Energy, Inc. (NEE – Analyst Report), Southern Company (SO) and Exelon Corporation (EXC) decreased 1.9%, 1.9%, 2% and 3.2%, respectively. Overall, 8 out of 10 sectors of the S&P 500 ended in the green.
The Dow also closed at a record high for the fourth time this year, with 26 out of its 30 components ending in the green. While, Visa Inc. (V) gained the highest among Dow components, International Business Machines Corporation (IBM) dropped the most. Shares of Visa went up 2.6%, while shares of IBM declined 0.9%.
Meanwhile, investors assessed a batch of economic reports that indicated a slowdown in manufacturing activity as well as consumer spending. The Institute for Supply management reported its February PMI had decreased 0.6 percentage points from January’s reading of 53.5% to 52.9%. The drop to 52.9% in February was more than the consensus estimate of a decrease to 53%. However, financial data company Markit reported that its U.S. Manufacturing Purchasing Managers Index (PMI) increased to 55.1 in February from 53.9 in January. The index touched its highest level since Oct 2014.
According to the Bureau of Economic Analysis, personal consumption expenditure decreased 0.2% in January, more than the consensus estimate of a 0.1% decrease. However, it dropped less than the decline of 0.3% in December’s personal consumption expenditure. Personal income increased 0.3% in January, less than the consensus estimate of a 0.4% gain. This rise in personal income came after it had increased 0.3% in December.
Separately, the US Census Bureau of the Department of Commerce reported a 1.1% drop in construction spending from revised December estimate of $982 billion to $971.4 billion in January. This decrease in the payout by builders on residential and nonresidential structures was in contrast to consensus estimate of a 0.3% increase.
Investors also focused on news emanating from China. Last Saturday, The People’s Bank of China (PBOC) trimmed its benchmark interest rates by 25 basis points to 5.35%. PBOC cut its interest rates for the second time in three months due to deteriorating economic conditions in China. Meanwhile, the HSBC/Markit Purchasing Managers’ Index (PMI) for China touched 50.7 last month, its highest level since Jul 2014.
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Stock Market News for March 03, 2015 – March 3, 2015 – Zacks.com
