Stock Market News for May 13, 2015 – Zacks Investment Research

Benchmarks ended in the red on Tuesday after volatility in global bond markets made investors jittery. While the German bond yields gained amid selloff in European bonds, U.S Treasury bonds touched the highest level since mid-November.

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 0.2% to close at 18,068.23. The Standard & Poor’s 500 (S&P 500) decreased 0.3% to 2,099.12. The tech-laden Nasdaq Composite Index closed at 4,976.19; declining almost 0.4%. The fear-gauge CBOE Volatility Index (VIX) went up 0.1% to settle at 13.86. A total of about 3.1 billion shares were traded on the NYSE on Tuesday. Decliners outpaced advancing stocks on the NYSE. For 53% stocks that declined, 44% advanced.

Bond prices declined across most parts of Europe on Tuesday. Increase in bond yields dragged bond prices down. The 10-year German government bonds yields increased 12 basis points to 0.703%, while the yields on 30-year government bonds gained 14 basis points to 1.296% on Tuesday. German bond yields moved north on optimism that inflation has touched the bottom in the Eurozone, which eventually boosted the euro. Separately, Spain, Italy and Portugal also witnessed their government bond yields climb between 10 to 13 basis points.

Meanwhile, the euro strengthened after Greece was able to pay its debt of about 750 million euros to the International Monetary Fund. The euro gained 0.7% to $1.1217. Gains in euro had a negative impact on European equity markets as a stronger euro could weigh on European multinationals’ profit margins. While the German DAX fell 1.7%, France’s CAC lost 1.1%. Selloffs in European equity and bond markets had a negative impact on the U.S. markets.

Further, the U.S. 10-year Treasury yields touched its highest level since Nov 21. The benchmark U.S. 10-year Treasury note yields climbed 5.9 basis points to 2.331%. The 30-year Treasury note yields also hit a six month high of 3.06%. Higher yields also affected the markets adversely.

However, benchmarks were able to erode some losses after U.S. Treasury yields gave away some of their earlier gains. The U.S. 10-year Treasury yields settled at near 2.26% for the day. The 30-year Treasury note yields also closed near 3.02%. The bond yields fell slightly after buyers entered the market, which helped the Treasury Department sell $24 billion in new 3-year notes at a high yield of 1%.

Yesterday’s losses were broad based with 9 out of 10 sectors of the S&P 500 ending in the red. The Materials Select Sector SPDR ETF (XLB) declined 1.1%, the highest among the S&P 500 sectors. Key stocks from the sector including E. I. du Pont de Nemours and Company ( (DD – Analyst Report), Monsanto Company (MON – Analyst Report), The Dow Chemical Company (DOW – Analyst Report), Praxair Inc. (PX – Analyst Report) and LyondellBasell Industries N.V. (LYB – Analyst Report) decreased 0.7%, 1.6%, 1.8%, 1.1% and 0.2%, respectively.

The energy sector was the only sector that bucked the trend and settled in the green. The Energy Select Sector SPDR (XLE) gained 0.5% due to rise in oil prices. WTI crude oil gained 2.5% to $60.75 per barrel, the second-highest level of the year. Oil prices gained following a report that forecasted U.S. oil production level may decline in June. Additionally, Brent crude oil advanced 2.9% to $66.86 per barrel.

Dow components Exxon Mobil Corporation (XOM – Analyst Report) and Chevron Corporation ( (CVX – Analyst Report) gained 0.3% and 0.2%, respectively. Among other key stocks from the energy sector, Kinder Morgan, Inc. (KMI – Analyst Report), Schlumberger Limited (SLB – Analyst Report) and ConocoPhillips (COP – Analyst Report) increased 0.1%, 0.8% and 0.2%, respectively.

In deal news, Verizon Communications Inc. (VZ – Analyst Report) agreed to acquire AOL Inc. ( (AOL – Snapshot Report) in a deal valued at $4.4 billion, or $50 per share. While shares of Verizon Communications dropped 0.4%, AOL’s shares soared 18.6%.

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Stock Market News for May 13, 2015 – Zacks Investment Research