Stock Market News for March 17, 2015 – Zacks Investment Research
A pause in the dollar rally helped benchmarks start the week on a positive note. The U.S. dollar weakened ahead of the Federal Open Market Committee’s meeting that is scheduled this week. Rally in international markets also boosted investor sentiment. Separately, gains among bio-tech stocks boosted the Nasdaq. Meanwhile, discouraging reports on manufacturing and housing failed to dent investor confidence.
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The Dow Jones Industrial Average (DJI) jumped 1.3% or 228.11 points to close at 17,977.42. The Standard & Poor’s 500 (S&P 500) gained almost 1.4% to 2,081.19. The tech-laden Nasdaq Composite Index closed at 4,929.51; rising 1.2%. The fear-gauge CBOE Volatility Index (VIX) lost 2.4% to settle at 15.61. A total of about 3.2 billion shares were traded on Monday on the NYSE. Advancers outpaced declining stocks on the NYSE. For 63% stocks that advanced, 35% declined.
Benchmarks gained more than 1% on Monday as the U.S. dollar weakened. The dollar’s rally took a breather on worries that the Federal Reserve may become cautious about hiking interest rates sooner than expected during the Federal Open Market Committee (FOMC) meeting scheduled to begin on Mar 18. Fed officials are expected to alter the guidance on interest rates by dropping the ‘patient’ phrase in the policy meeting.
The U.S. dollar index dropped almost 1% on Monday after it had gained nearly 3% last week. The greenback which gained about 14% against the euro this year saw the euro gaining 0.7% against the dollar to $1.0570 on Monday. Italy’s central bank governor’s comment that the euro has fallen at a faster pace than the European Central Bank’s expectation boosted the euro. His comments hinted that the weakness in euro has been overdone.
The S&P 500 settled above its 50-day moving average on Monday. Nine out of 10 sectors of the S&P 500 ended in the green. The Health Care Select Sector SPDR ETF (XLV) gained 2.2%, the highest among the S&P 500 sectors. Key stocks from the sector such as Johnson & Johnson (JNJ – Analyst Report), Pfizer Inc. (PFE – Analyst Report) and Merck & Co. Inc. (MRK – Analyst Report) advanced 1.9%, 1.3% and 1.6%, respectively. Bio-tech stocks from the sector including Gilead Sciences Inc. (GILD – Analyst Report), Biogen Idec Inc. (BIIB – Analyst Report), Amgen Inc. (AMGN – Analyst Report) and Celgene Corporation (CELG – Analyst Report) increased 1.7%, 1.9%, 5.7% and 2.6%, respectively. Gains among biotechnology stocks helped the Nasdaq settle in positive territory.
The Utilities Select Sector SPDR ETF (XLU) was the second biggest gainer among the S&P 500 sectors. The sector advanced 1.7%. Key stocks from the sector including The AES Corporation (AES – Analyst Report), Duke Energy Corporation (DUK – Analyst Report), Ameren Corporation (AEE – Analyst Report) and Southern Company (SO – Analyst Report) gained 0.8%, 1.5%, 1.8% and 1.6%, respectively.
The materials sector was the only loser, affected by shares of Dow component E. I. du Pont de Nemours and Company (DD – Analyst Report) plunging 4.3%. DuPont shares took a beating after the company criticized hedge fund Trian Fund Management regarding the composition of the firm’s board. The Materials Select Sector SPDR ETF (XLB) declined almost 0.2%.
International markets also rallied on Monday. The German DAX 30 index went up 2.2%. The index jumped above the 12,000 mark for the first time on Monday. France’s CAC-40 also gained 1%. The Shanghai Composite Index too rallied more than 2% after Chinese premier Li Keqiang said the government will take more measures to revive the economy.
Meanwhile, a batch of mixed domestic economic data failed to have a negative impact on investor sentiment. The Board of Governors of the Federal Reserve System reported an increase in industrial production. The report stated industrial production increased 0.1% in February after it decreased 0.3% in January. This rise in industrial production in February was less than the consensus estimate of it increasing by 0.2%. Separately, capacity utilization decreased to 78.9%, in contrast to the consensus estimate of a rise to 79.4%.
Additionally, the Empire State Manufacturing Survey Index came in at 6.9 in March, declining from 7.78 in February. The reading was in contrast to the consensus estimate expecting an uptrend to 8.5. The reading indicated that manufacturing activity expanded at a less-than-expected pace for New York manufacturers. Separately, the NAHB/Wells Fargo Housing Market index slipped to 53 in March from February’s reading of 55.
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Stock Market News for March 17, 2015 – Zacks Investment Research
