Stock Market News for May 14, 2015 – Zacks Investment Research
Benchmarks were little changed on Wednesday amid discouraging retail sales numbers and rise in bond yields. While disappointing retail sales figures in April dragged the S&P 500 and the Dow into negative territory, gains in bond yields across the U.S. and Europe made investors nervous. Separately, a drop in DuPont’s shares weighed on the Dow. However, the Nasdaq bucked the trend and ended in the green, boosted by gains in technology stocks.
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The Dow Jones Industrial Average (DJI) declined a meager 0.04% to close at 18,060.49. The Standard & Poor’s 500 (S&P 500) decreased a meager 0.03% to 2,098.48. The tech-laden Nasdaq Composite Index closed at 4,981.69; gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) dropped 0.7% to settle at 13.76. A total of about 6.1 billion shares were traded on Wednesday, lower than the last five trading days’ average of 6.6 billion. Advancers outpaced declining stocks on the NYSE. For 54% stocks that advanced, 43% declined.
Benchmarks finished almost unchanged on Wednesday amid lower-than-expected monthly retail sales numbers. The U.S. Department of Commerce reported that seasonally adjusted sales of retail and food services were hardly changed in April. This compared unfavorably with the consensus forecast of a 0.2% gain. Additionally, retail sales numbers in April were up 0.9% year over year, the smallest annual gain since Oct 2009.
While sales in restaurants and Internet sites picked up, consumers reduced their spending on autos, home furnishing, electronic goods and gasoline. Retail sales numbers excluding motor vehicle sales, which accounts for one-fifth of total retail purchases, gained 0.1%. The number was well below the consensus estimate of an increase of 0.4%. Retail sales figures minus both auto and gasoline edged up 0.2%.
April’s retail sales numbers turned out to be disappointing despite rise in consumer confidence in April, steady job creation and cheaper gasoline prices. Consumers chose to cut back on purchases in order to pay their debts and stack more cash in bank accounts. Separately, March’s retail sales figure was revised to 1.1% gain, instead of 0.9%.
Among retail earnings numbers, shares of Macy’s, Inc. (M – Analyst Report) declined 2.5% after the company reported first quarter earnings per share of 56 cents that fell short of the Zacks Consensus Estimate of 61 cents. Revenues of $6,232 million also came in below the Zacks Consensus Estimate of $6,316 million.
Ralph Lauren Corporation (RL – Analyst Report) posted fourth quarter earnings per share of $1.41 that came ahead of the Zacks Consensus Estimate of $1.32. However, revenues of this luxury apparel retailer came in at $1,885 million, less than the Zacks Consensus Estimate of $1,906 million. Shares of Ralph Lauren declined 3%.
Among other economic data, the U.S. Department of Commerce reported that business inventories increased 0.1% in March. This was less than the consensus estimate of a rise by 0.2%.
Meanwhile, rise in bond yields continued to make investors jittery. Benchmark U.S. 10-year Treasury note yields went up to 2.28% for the day. 30-year Treasury note yields also edged up to 3.07%. In Europe, 10-year German government bonds yields also increased to 0.72%.
Separately, E. I. du Pont de Nemours and Company (DD – Analyst Report) defeated the campaign by activist investor Nelson Peltz to join the chemical firm’s board. Peltz had criticized DuPont for suffering from its bloated corporate structure and declining profit margins. Shares of DuPont plunged 6.8%, which eventually weighed on the Dow.
However, gains in technology shares helped the Nasdaq settle in the green. The Technology SPDR ETF (XLK) gained 0.4%, the highest among the S&P 500 sectors. Key technology stocks including Apple Inc. (AAPL – Analyst Report), Microsoft Corporation (MSFT – Analyst Report), Verizon Communications Inc. (VZ – Analyst Report), Google Inc (GOOGL – Analyst Report) and International Business Machines Corporation ( (IBM – Analyst Report) increased 0.1%, 0.6%, 0.2%, 0.1% and 1%, respectively.
On the other hand, the Utilities Select Sector SPDR (XLU) dropped almost 1% and was the biggest loser among the S&P 500 sectors. Key utilities stocks including Duke Energy Corporation (DUK – Analyst Report), Dominion Resources, Inc. (D – Snapshot Report), Exelon Corporation (EXC – Analyst Report), Southern Company ( (SO – Analyst Report) and PG&E Corporation (PCG) decreased 1.4%, 0.3%, 0.8%, 0.2% and 1.4%, respectively. Overall, 5 out of 10 sectors of the S&P 500 ended in the red.
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Stock Market News for May 14, 2015 – Zacks Investment Research
