Stock Market News for March 05, 2015 – March 5, 2015 – Zacks.com
Markets ended in the red for the second consecutive day, handing the Dow and S&P 500 their worst closing levels since Feb 19. Some opined there were no real panic in the markets, nonetheless the Nasdaq was dragged away from its 5K for the second day in a row. Among the day economic numbers, the private-sector employment gains in February were lower than prior month. Separately, ISM services index showed modest improvement.
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The Dow Jones Industrial Average (DJI) lost 0.6%, or 106.47 points, to close at 18,096.90. The Standard & Poor’s 500 (S&P 500) dropped 0.4% to 2,098.53. The tech-laden Nasdaq Composite Index closed at 4,967.14; losing 0.3%. The fear-gauge CBOE Volatility Index (VIX) edged up 2.7% to settle at 14.23. The composite volume on the New York Stock Exchange was 3.4 billion. The decliners beat the advancers on the NYSE, for 60% stocks that dropped, 37% advanced.
It is a busy week in terms of labor reports, with three of them scheduled this week. The first among them was released yesterday – private-sector job creation numbers from the Automatic Data Processing, Inc. (ADP – Analyst Report). A total of 212,000 private jobs were added in February, reported ADP. This was lower than the 250,000 job additions in January, which however was revised higher. February’s job gains were also at the slowest pace since Aug 2014, according to ADP and Moody’s Analytics. The numbers were short of market expectations too, as economists were eyeing an addition of 218,000 – 220,000 jobs.
Service sector added most of the jobs. It created 181,000 jobs, which however was a 12% decline from January. Professional businesses and services added 34,000 jobs, lower than January’s 49,000. However, financial services added 15, 000 more jobs than January, its biggest gain since Mar 2006.
Investors are now focused on the initial claims numbers on Thursday, sandwiched between the private sector jobs data and the most crucial total non-farm payroll numbers scheduled for release on Friday. It accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States.
The day’s other key economic data was the better-than-expected economic activity in the non-manufacturing sector in February. According to the Institute for Supply Management Non-Manufacturing Business Survey Committee, the NMI edged 0.2 percentage point higher than January’s reading to 56.9% in February. The consensus estimate had pegged the same at 56.1%. The Non-Manufacturing Business Activity Index however dropped 2,1 percentage points to 59.4%.
The 61st consecutive month of improved activity in the non-manufacturing sector (as reading stayed above 50) hinted at the gradual economic recovery in the US. The US central bank had said they would evaluate economic conditions for its decision on rate hike.
However, Chicago Federal Reserve President Charles Evans called for being “patient in raising interest rates”. He said: “I think economic conditions will evolve in a way such that it will be appropriate to delay normalizing monetary policy–that is, to hold off on raising short-term rates–until 2016”. While he acknowledged the “solid, sustainable growth path,” the economic activity is on, he was concerned about inflation running even lower than estimates.
Yesterday’s loss was broad based, as nine out of ten S&P sectors ended in the red. The only gainer was the healthcare sector. Health Care Select Sector SPDR ETF (XLV) rose 0.5%. Among key stocks, Pfizer Inc. (PFE – Analyst Report), Amgen Inc. (AMGN – Analyst Report), UnitedHealth Group Incorporated (UNH – Analyst Report), AbbVie Inc. (ABBV – Analyst Report) and Celgene Corporation (CELG – Analyst Report) gained 0.2%, 0.4%, 0.9%, 1.1% and 0.9%, respectively.
Industrials and Consumer staples were the day’s big losers. While Industrial Select Sector SPDR ETF (XLI) lost about 0.8%, Consumer Staples Select Sector SPDR ETF (XLP) dropped 0.7%. Among industrial stocks, General Electric Company (GE – Analyst Report), 3M Company (MMM – Analyst Report), United Technologies Corporation (UTX – Analyst Report) and The Boeing Company (BA – Analyst Report) lost 0.8%, 0.7%, 0.5% and 0.8%, respectively. From the consumer staples sector, losers included The Procter & Gamble Company (PG – Analyst Report), The Coca-Cola Company (KO – Analyst Report), Wal-Mart Stores Inc. (WMT) and Philip Morris International, Inc. (PM). They lost 1%, 1.1%, 1% and 0.6%, respectively.
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Stock Market News for March 05, 2015 – March 5, 2015 – Zacks.com
