Stock Market News for March 09, 2015 – March 9, 2015 – Zacks.com

Stock Market News for March 09, 2015 – March 9, 2015 – Zacks.com

Benchmarks ended in negative territory on Friday as upbeat nonfarm payroll data reignited fears about sooner-than-expected interest rate hike. Meanwhile, the unemployment rate declined to six and a half year low in February. The S&P 500 witnessed its biggest one-day decline in last two months on Friday. Moreover, benchmarks finished in the red for the second consecutive week.

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) declined more than 1.5%, or 278.94 points, to close at 17,856.78. The Standard & Poor’s 500 (S&P 500) plunged 1.4% to 2,071.26. The tech-laden Nasdaq Composite Index closed at 4,927.37; losing 1.1%. The fear-gauge CBOE Volatility Index (VIX) rose nearly 8.3% to settle at 15.20. A total of about 3.86 billion shares were traded on NYSE on Friday. Decliners outpaced advancing stocks on the NYSE. For 84% stocks that declined, 15% advanced.

According to the Bureau of Labor Statistics (BLS), the U.S. economy created a total of 295,000 jobs in February, beating the consensus estimate of 235,000. The tally was also significantly higher than January’s revised job number of 239,000. It was revised down from last month’s reported figure of 257,000. Moreover, the unemployment rate went down to six and a half year low figure of 5.5% in February from 5.7% the month before, which is also down from 6.7% in Feb 2014. The unemployment rate was also lower than the consensus estimate of 5.6%.

However, the average hourly earnings gained 0.1% in February from previous month’s figure to $24.78 per hour, lower than the consensus estimate of a 0.2% rise. The average hourly earnings witnessed a 2% rise from the year-ago figure. This is a slower wage growth pace compared to what we saw in January, but modestly better than the December rate, likely indicating some improvement in this key measure.

These strong job data had a negative impact on investor sentiment as it raised the possibility of a sooner-than-expected rate hike. In their recent meetings, the Fed continued to emphasize that it is in no hurry and would prefer to remain ‘patient,’ particularly with inflation readings remaining below its target levels. However, the solid nonfarm payroll data somehow indicated that the U.S. economy may be strong enough to easily withstand a well-telegraphed slow increase in rates. Analysts speculated that the Fed may opt for an earlier-than-estimated rate hike in this favorable environment.

Rate hike fear had a negative impact on the Utilities Select Sector SPDR (XLU) on Friday. The sector declined 3% and was the biggest loser among the S&P 500 sectors. Key stocks from the sector including The AES Corporation (AESAnalyst Report), Duke Energy Corporation (DUKAnalyst Report), Ameren Corporation (AEEAnalyst Report) and Southern Company (SOAnalyst Report) lost 3.7%, 3.4%, 2.9% and 2.1%, respectively. All the 10 S&P 500 sectors registered losses on Friday.

Meanwhile, the oil prices dropped again on Friday as strong U.S. job data boosted dollar on Friday. The prices of WTI crude oil and Brent crude oil declined 2.3% and 1.3% to $49.61 per barrel and $59.73 a barrel, respectively. Decline in oil prices dragged down the Energy Select Sector SPDR (XLE) 1.8%. Key stocks from the sector including Cabot Oil & Gas Corporation (COGAnalyst Report), EOG Resources, Inc. (EOGAnalyst Report), Halliburton Company (HALAnalyst Report) and Baker Hughes Incorporated (BHIAnalyst Report) decreased 2.1%, 1.1%, 1.3% and 1.9%, respectively.

Separately, it was announced on Friday that Apple Inc. (AAPLAnalyst Report), the world’s biggest company by market cap, will be joining the Dow 30 to become a major component in what forms the Dow Jones Industrial Average (DJIA). The tech giant will replace AT&T, Inc. (TAnalyst Report) in the index. The swap in the index will be effective on Mar 19. Shares of Apple rose a meager 0.2% following the announcement.

On the earnings front, shares of Staples, Inc. (SPLSAnalyst Report) dropped 2.7% after reporting fourth quarter revenues of $5,656.5 million, which decreased 3.7% year over year and also fell short of the Zacks Consensus Estimate of $5,747 million. Moreover, adjusted fourth quarter earnings per share of 31 cents declined 6% from the year-ago figure. However, Foot Locker, Inc.’s (FLSnapshot Report) shares gained 4.1% after announcing fourth quarter earnings per share of $1.00, beating the Zacks Consensus Estimate of 90 cents.

Over the week, the Dow, S&P 500 and Nasdaq lost 1.5%, 1.6% and 0.7%, respectively.

Benchmarks had started the previous week on a positive mood as the Nasdaq closed above the 5000 mark for the first time since Mar 2000 . Encouraging deal news involving NXP Semiconductors NV (NXPI) and Freescale Semiconductor, Ltd. (FSL), Hewlett-Packard Company (HPQ) and Aruba Networks, Inc. (ARUN), and Cardinal Health, Inc. (CAH) and Johnson & Johnson’s (JNJ) boosted markets. Markets were also aided later by the European Central Bank (ECB) after it announced a 1 trillion euro ($1.1 trillion) bond-buying program. The repurchase is due to start from Mar 9. Moreover, interest cuts in China also had positive impact on markets.

However, dismal monthly car sales report and disappointing economic data including ISM Manufacturing Index, personal consumption expenditure, construction spending, initial claims and factory orders, dented investor sentiment. Separately, Israeli Prime Minister Benjamin Netanyahu’s warning over the attempts of White House-Iran’s nuclear deal affected sentiment, causing fears of risks in the Middle East.

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Stock Market News for March 09, 2015 – March 9, 2015 – Zacks.com

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