Stock Market News for May 22, 2015 – Zacks Investment Research
Benchmarks ended marginally higher on Thursday following mixed economic data. While reports on housing, manufacturing and labor market were discouraging, Conference Board’s leading economic index was up for April. The day’s mostly weaker-than-expected economic data increased expectations of delayed rate hike, which eventually helped the S&P 500 to close at a record high.
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The Dow Jones Industrial Average (DJI) added just 0.34 points to close at 18,285.74. The Standard & Poor’s 500 (S&P 500) increased 0.2% to 2,130.82. The tech-laden Nasdaq Composite Index closed at 5,090.79; gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) declined almost 6% to settle at 12.11. A total of about 5.6 billion shares were traded on Thursday, lower than this months’ average of 6.3 billion. Advancers outpaced declining stocks on the NYSE. For 53% stocks that advanced, 43% declined.
Economic data came in mixed on Thursday. The National Association of Realtors reported existing home sales declined 3.3% to a seasonally adjusted annual rate of 5.04 million in April from March’s upwardly-revised figure of 5.21 million. This was also less than the consensus estimate of 5.22 million. The National Association of Realtors chief economist Lawrence Yun said that existing home sales dropped due to lack of supply, which in turn increased prices.
Treasury yields ended lower due to discouraging existing home sales numbers. The benchmark U.S. 10-year Treasury note decreased 6 basis points to 2.188% on Thursday. The 30-year Treasury note yields also declined 7.5 basis points to 2.976% yesterday.
Meanwhile, the manufacturing sector continues to face headwinds after two reading of manufacturing sentiment dipped in May. The Philadelphia Federal Reserve’s manufacturing index fell to 6.7 in May from a 7.5 in April. Additionally, Markit’s flash manufacturing purchasing managers index dropped to 53.8 in May from 54.1 in April. However, the Conference Board’s leading economic index increased 0.7% in April after it rose a 0.4% in March.
Separately, the U.S. Department of Labor reported that jobless claims increased 10,000 for the week ending May 16 to 274,000, higher than the consensus estimate of 270,500. However, the 4-week moving average decreased 5,550 from previous week’s level to 266,250.
Investors are keeping an eye on economic data to gauge the timing of a rate hike. The day’s mostly weaker-than-expected data increased expectations that the Federal Reserve may delay hiking interest rates in the near term. On Wednesday, minutes from the Federal Open Market Committee meeting stated officials opined that a rate hike in June is “unlikely” as they remained concerned about weak economic growth in the first quarter. Only some officials believed they had enough confidence to increase interest rates from near zero levels at the June 16-17 meeting.
Among earnings news, shares of Best Buy Co., Inc. (BBY – Analyst Report) gained 3.9% after the company reported first quarter earnings per share of 37 cents that beat the Zacks Consensus Estimate of 29 cents. Revenues of $8,558 million also beat the Zacks Consensus Estimate of $8,518 million.
Shares of salesforce.com, Inc.’s (CRM – Analyst Report) also advanced 3.9% a day after the company posted first quarter earnings per share of 2 cents that exceeded the Zacks Consensus Estimate by a cent. Revenues of $1.511 billion also beat the Zacks Consensus Estimate of $1.501 billion.
Eight out of 10 sectors of the S&P 500 ended in the green. The Energy Select Sector SPDR (XLE) gained 0.9%, the highest among the S&P 500 sectors. Dow components Exxon Mobil Corporation (XOM – Analyst Report) and Chevron Corporation ( (CVX – Analyst Report) advanced 0.1% 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 0.2%, 1.4% and 1.2%, respectively.
The Industrial Select Sector SPDR (XLI) gained almost 0.6% and was the second biggest gainer among the S&P 500 sectors. Key holdings including 3M Company (MMM – Analyst Report), Union Pacific Corporation (UNP – Analyst Report), The Boeing Company (BA – Analyst Report), United Technologies Corporation ( (UTX – Analyst Report) and Honeywell International Inc. (HON – Analyst Report) increased 0.1%, 1.6%, 0.6%, 0.2% and 0.1%, respectively.
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Stock Market News for May 22, 2015 – Zacks Investment Research
