Stock Market News for March 21, 2014 – Zacks Investment Research
Benchmarks rallied on Thursday after encouraging economic numbers boosted investors sentiment. The rise in Philadelphia Fed’s manufacturing index and an increase in Conference Board’s leading economic index was welcomed by investors. Positive economic data overshadowed Wednesday’s negative sentiment arising from Federal Reserve’s indication of a possible hike in key lending rates sooner than expected. At the same time, investors were kept on the edge by recent developments in the Crimea region of Ukraine.
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 0.7% to close Thursday’s trading session at 16,331.05. The Standard & Poor (S&P 500) rose 0.6% to finish at 1,872.01. The tech-laden Nasdaq Composite Index went up 0.3% to 4,319.29. The fear-gauge CBOE Volatility Index (VIX) dropped almost 7.2% to settle at 14.52. Total volume on the New York Stock Exchange was 3.3 billion shares. Advancing stocks were outnumbered by declining stocks on the NYSE. For 48% stocks that advanced, 49% declined.
U.S. stocks rallied on Thursday following promising economic numbers. The Philadelphia Federal Reserve’s manufacturing index surged to 9.0 in March from a negative 6.3 in February. It also stated that demand for manufactured goods as measured by current new orders index entered positive territory. Current shipments also increased. Additionally, the Conference Board’s leading economic index increased 0.5% in February after it rose a meagre 0.1% in January. The positive results likely hinted that the negative impact of the harsh winter weather on the economy was momentary.
Positive economic numbers eased much of the tensions that impacted markets on Wednesday. On Wednesday, Federal Reserve Chairwoman Janet Yellen stated that interest rate hikes might happen in about six months after the end of the quantitative easing program.
However, economic data on existing home sales was not encouraging. Existing home sales data released by National Association of Realtors fell 0.4% to a seasonally adjusted annual rate of 4.60 million in February from 4.62 million in January. In February, severe winter weather, rise in mortgage rates and increase in home prices led to decline in existing home sales. Last month, the slid in existing home sales touched the slowest rate since July 2012. Separately, the U.S. Department of Labor reported that seasonally adjusted initial claims rose 5000 to 320,000 in the week ending March 15.
Investors also kept an eye on the lingering tension between Russia and the West over Crimea region of Ukraine. On Thursday, Russian troops took over two Ukrainian naval bases, including the Crimean port of Sevastopol. On Tuesday, Russian President Vladimir Putin signed treaty for annexing Crimea.
However, US President Barack Obama refused to recognize the validity of the referendum. On Thursday, he declared sanctions on a Russian bank and prominent Russian officials, including close allies of Putin. The Russian President hit back, declaring sanctions against nine US officials and lawmakers.
Nine out of ten sectors of the S&P 500 ended in the green. The Financial Select Sector SPDR (XLF) led the advance as the sector rose 1.6%. Top holdings from the sector such as Wells Fargo & Company (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM), Berkshire Hathaway Inc. (NYSE:BRK-B), Bank of America Corporation (NYSE:BAC) and Citigroup Inc. (NYSE:C) increased 2.6%, 3.1%, 1.5%, 2.8% and 2.6%, respectively.
The materials sector closely followed the financials sector. The Materials Select Sector SPDR (XLB) went up 1.3%. Key stocks from the sector such as E. I. du Pont de Nemours and Company (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Monsanto Company (NYSE:MON), LyondellBasell Industries NV (NYSE:LYB) and Ecolab Inc. (NYSE:ECL) rose 0.8%, 1.3%, 1%, 0.6% and 0.7%, respectively.
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Stock Market News for March 21, 2014 – Zacks Investment Research
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