Stock Market News for May 01, 2015 – May 1, 2015 – Zacks.com
Benchmarks ended the last trading session of the month in the red dragged by losses in technology and biotechnology stocks. While, decline in Apple’s shares weighed on the technology sector, Celegen’s lower-than-expected quarterly revenues had a negative impact on biotech shares. Yesterday’s losses were broad based with all 10 sectors of the S&P 500 ending in the red and 27 out of 30 Dow components finishing in negative territory. However, benchmarks were able to register gains for the month of April.
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 1.1% to close at 17,840.52. The Standard & Poor’s 500 (S&P 500) decreased 1% to 2,085.51. The tech-laden Nasdaq Composite Index closed at 4,941.42; declining 1.6%. The fear-gauge CBOE Volatility Index (VIX) climbed 6.8% to settle at 13.12. A total of about 231 million shares were traded on NYSE on Thursday. Decliners outpaced advancing stocks on the NYSE. For 74% stocks that declined, 23% advanced.
Decline in technology stocks had a negative impact on broader markets. Shares of Apple Inc. (AAPL – Analyst Report) dropped 2.7% after a key component of Apple Watch provided by AAC Technologies was found to be defective. Other key technology stocks including Microsoft Corporation (MSFT – Analyst Report), AT&T Inc. (T – Analyst Report), Google Inc (GOOGL – Analyst Report) and International Business Machines Corporation (IBM – Analyst Report) decreased 0.9%, 0.4%, 2.3% and 1.8%, respectively. Overall, the Technology Select Sector SPDR (XLK) declined 1.4%.
Meanwhile, decline in biotech stocks affected the Nasdaq. Shares of Celgene Corporation (CELG – Analyst Report) declined 4.5% after the company reported first quarter revenues of $2.08 billion, short of the Zacks Consensus Estimate of $2.12 billion. Shares of other major biotech stocks such as Biogen Inc. (BIIB), Amgen Inc. (AMGN), Gilead Sciences Inc. (GILD) and Regeneron Pharmaceuticals, Inc. (REGN) decreased 2.6%, 1.9%, 1.8% and 2.6%, respectively. Overall, the iShares Nasdaq Biotechnology (IBB) fell 3.2%, while the broader Health Care Select Sector SPDR (XLV) declined 1.4%, the second highest among the S&P 500 sectors.
Separately, the SPDR S&P Homebuilders ETF (XHB) dropped 1.7% and was the biggest loser among the S&P 500 sectors. Key holdings including KB Home (KBH), Beazer Homes USA Inc. (BZH), Ryland Group Inc. (RYL), Toll Brothers Inc. (TOL) and The Home Depot, Inc. (HD) decreased 1.8%, 0.2%, 5.9%, 1.7% and 1.6%, respectively.
Coming to earnings reports, ExxonMobil Corporation (XOM – Analyst Report) posted first-quarter earnings per share of $1.17, beating the Zacks Consensus Estimate of 80 cents. Also, CME Group Inc. (CME – Analyst Report) reported first-quarter earnings per share of 98 cents that came ahead of the Zacks Consensus Estimate of 95 cents. Viacom, Inc. (VIAB – Analyst Report) reported second quarter earnings per share of $1.16 that beat the Zacks Consensus Estimate of $1.08. Meanwhile, ConocoPhillips’ (COP – Analyst Report) first quarter loss of 18 cents per share was narrower than the Zacks Consensus Estimate of a loss of 19 cents.
On the other hand, Colgate-Palmolive Co. (CL – Analyst Report) reported first quarter earnings per share of 66 cents per share, in line with the Zacks Consensus Estimate. IMAX Corporation’s (IMAX – Analyst Report) break-even earnings per share for the first quarter also came in line with the Zacks Consensus Estimate.
Shares of ExxonMobil, ConocoPhillips, Viacom, Colgate-Palmolive and IMAX declined 0.6%, 0.2%, 1.8% and 0.6%, respectively. CME Group’s shares gained 1.9%.
Including these reports, about 333 S&P 500 members have reported first quarter earnings results so far. Among the 333 members, first quarter earnings are up 4.9% on 3.6% lower revenues, with 66.5% beating earnings per share estimates and 40.1% coming ahead of top-line expectations.
On the economic front, the Bureau of Economic Analysis reported that personal income improved marginally in April, less than the consensus estimate of an increase by 0.2%. Personal consumption expenditure increased 0.4% in April also less than the consensus estimate of an increase by 0.5%.
Additionally, the Institute for Supply Management-Chicago noted that Chicago Business Barometer increased to 52.3 in April from March’s reading of 46.3. This rise in the Chicago Purchasing Managers Index in April was more than the consensus estimate of an increase to 50.
Separately, the U.S Department of Labor reported that seasonally adjusted initial claims decreased 34,000 to 262,000 in the week ending Apr 25. The fall was more than the consensus estimate of initial claims decreasing to 286,000.
For the month, the S&P 500, the Dow and the Nasdaq gained 0.9%, 0.4% and 0.8%, respectively. Benchmarks ended in the green for the month following China’s stimulus measures, prospects of Visa Inc. (V) gaining access to China and McDonald’s Corp.’s (MCD) turnaround plans.
Meanwhile, a slew of positive earnings results from Apple Inc., International Business Machines Corporation, Morgan Stanley (MS), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C), Goldman Sachs Group Inc (GS), BlackRock, Inc. (BLK), Caterpillar Inc. (CAT), Pepsico, Inc. (PEP), The Coca-Cola Co (KO), The Boeing Company (BA), E. I. du Pont de Nemours and Company (DD), United Technologies Corporation (UTX), UnitedHealth Group Inc. (UNH), Intel Corporation (INTC), Johnson & Johnson (JNJ), Merck & Co. Inc. (MRK), and Pfizer Inc. (PFE) added to the bullish sentiment.
Additionally, new deal between Mylan N.V. (MYL) and Teva Pharmaceutical Industries Limited (TEVA), Mylan N.V. and Perrigo Company Plc (PRGO), and FedEx Corporation (FDX) and TNT Express boosted investor confidence.
Separately, European Central Bank’s decision to keep interest rates unchanged while continuing with its asset purchasing program was welcomed by investors.
On the other hand, Fed officials gave no clear guidance on the timing of interest rate hike, which did little to boost investor sentiment. They remain uncertain as to when the economic growth will gain momentum due to lack of firm evidence. U.S. first quarter GDP data came in weaker than expected due to harsh winter weather, cheaper oil prices, stronger dollar and disruptions in Western Coast ports.
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Stock Market News for May 01, 2015 – May 1, 2015 – Zacks.com
