Stock Market News for May 05, 2015 – May 5, 2015 –

Stock Market News for May 05, 2015 – May 5, 2015 –

Benchmarks ended in the green for the second straight session on Monday boosted by a handful of upbeat earnings results. Meanwhile, investors continued to focus on economic data to gauge the timing of an interest rate hike. An expansion in the Eurozone’s manufacturing activity in April also boosted investor sentiment. The S&P 500 touched its highest level since Apr 28 and was just a few points shy of a record close.

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The Dow Jones Industrial Average (DJI) gained 0.3% to close at 18,070.40. The Standard & Poor’s 500 (S&P 500) also advanced 0.3% to 2,114.49. The tech-laden Nasdaq Composite Index closed at 5,016.93; increasing 0.2%. The fear-gauge CBOE Volatility Index (VIX) went up 1.2% to settle at 12.85. A total of about 5.6 billion shares were traded on Monday, lower than the last five trading days’ average of 7.2 billion. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 41% declined.

Benchmarks started the week on a positive note following better-than-expected earnings results. Berkshire Hathaway Inc. (BRK-B) reported first quarter earnings per share of $1.72, beating the Zacks Consensus Estimate by 6.2%. Shares of the insurance and investment conglomerate gained almost 2%, giving the biggest boost to the S&P 500.

The Financial Select Sector SPDR (XLF) gained almost 1%, the highest gainer among the S&P 500 sectors. Key holdings from the sector including Wells Fargo & Company (WFCAnalyst Report), JPMorgan Chase & Co. (JPMAnalyst Report), Bank of America Corporation (BACAnalyst Report) and Citigroup Inc. (CAnalyst Report) increased 0.9%, 1.8%, 2.1% and 0.8%, respectively.

Among other earnings results, Cognizant Technology Solutions Corporation (CTSHAnalyst Report) posted first quarter earnings per share of 71 cents that came in ahead of the Zacks Consensus Estimate of 63 cents. Comcast Corporation (CMCSAAnalyst Report) also reported first quarter earnings per share of 79 cents that outpaced the Zacks Consensus Estimate of 74 cents. Tyson Foods, Inc. (TSNAnalyst Report) too reported second quarter earnings per share of 75 cents that exceeded the Zacks Consensus Estimate by 2.7%. Shares of Cognizant, Comcast and Tyson Foods gained 6.2%, 0.6% and 1.5%, respectively.

Including these reports, about 371 S&P 500 members have reported first quarter earnings results so far. Among the 371 members, first quarter earnings are up 5% on 3.7% lower revenues, with 66.1% beating earnings per share estimates and 43.8% coming ahead of top-line expectations.

Investors also remained focused on economic data for signals on timing of the interest rate hike. According to the U.S. Department of Commerce, new orders for manufactured goods increased 2.1% in March, its biggest rise in eight months. This increase in factory orders for March was in line with the consensus estimate. However, the underlying trend remains weak as the increase in new orders for manufactured goods was due to a 13.5% jump in transportation orders. Excluding transportation, factory orders were flat in March. Separately, unfilled orders and shipments were up 0.1% and 0.5%, respectively. However, inventories data decreased 0.2%.

Investors are also waiting for the April’s jobs report to get further indications about the timing of the rate hike. April’s nonfarm payroll report is scheduled to be released on Friday. Meanwhile, president of the Federal Reserve Bank of Chicago, Charles Evans, said hiking federal funds rate won’t be appropriate until next year due to weak first quarter economic reports.

Utilities stocks moved north on Monday as they tend to thrive on a low interest rate environment. The Utilities Select Sector SPDR (XLU) advanced 0.7% and was the second biggest gainer among the S&P 500 sectors. Key utilities stocks including NextEra Energy Inc (NEEAnalyst Report), Exelon Corporation (EXCAnalyst Report), Southern Company (SOAnalyst Report) and PG&E Corporation (PCGAnalyst Report) increased 0.9%, 2%, 0.4% and 0.3%, respectively. Overall, 8 out of 10 sectors of the S&P 500 ended in the green.

Meanwhile, the iShares Nasdaq Biotechnology (IBB) gained 0.4% and outperformed the broader markets. Shares of major biotech companies including Gilead Sciences Inc. (GILD), Amgen Inc. (AMGN) and Regeneron Pharmaceuticals, Inc. (REGN) advanced 0.6%, 1.1% and 0.6%, respectively.

Positive news emanating from Europe also added to the bullish sentiment. Eurozone’s purchasing managers index dropped to 52 in April from 52.2 in March. However, the reading came above 50, which indicated Eurozone’s manufacturing sector expanded although at a slightly slower pace.

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Stock Market News for May 05, 2015 – May 5, 2015 –

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