Stock Market News for November 10, 2014 – Zacks Investment …
Benchmarks were little changed on Friday after reports that the U.S. nonfarm payroll employment increased at a slower pace than expected, while unemployment rate declined to a six-year low. The S&P 500 and the Dow posted marginal gains, which were enough to help them settle at record highs for the third consecutive session. On the other hand, the Nasdaq failed to close in positive territory. Healthcare stocks slumped on Friday after the U.S. Supreme Court decided to hear a new challenge to a crucial part of the Affordable Care Act.
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) increased 0.1% to close at 17,573.93. The Standard & Poor 500 (S&P 500) gained a meager 0.03% to close at 2,031.92. The tech-laden Nasdaq Composite Index closed at 4,632.53; declining 0.1%. The fear-gauge CBOE Volatility Index (VIX) went down 4% to settle at 13.12. A total of 6.5 billion shares were traded on Friday, lower than last five day average of 7.24 billion. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 38% declined.
The U.S. Bureau of Labor Statistics said total nonfarm payroll employment increased 214,000 in October, less than the consensus estimate of an increase by 235,000. Moreover, the economy added in excess of 200,000 workers for nine successive months, a figure last achieved in 1994. This year the economy added an average 229,000 jobs a month, the fastest pace since 1999. October’s reading also followed an upward revision of nonfarm payroll employment in the previous two months.
Meanwhile, many companies added workers for the upcoming holiday season. As a result, the unemployment rate edged down to 5.8% in October from September’s 5.9%. This is the lowest figure recorded since Jul 2008.
Separately, the Board of Governors of the Federal Reserve System reported that consumer credit increased by $15.9 billion in September from previous month’s revised figure of $14.1 billion. Non-revolving credit increased at an annual rate of 8% and revolving credit increased at an annual rate of 3%. In September, consumer credit increased at a seasonally adjusted annual rate of 6.5%. Consumer credit is considered to be a good indicator of potential future spending levels.
Eight out of 10 sectors of the S&P 500 ended in the green. The Energy Select Sector SPDR (XLE) gained 1.1% on Friday. The sector was the biggest gainer among the S&P 500 sectors. Key energy stocks including Halliburton Company (HAL – Analyst Report), Chesapeake Energy Corporation (CHK – Analyst Report), Baker Hughes Incorporated (BHI – Analyst Report) and Schlumberger Limited (SLB – Analyst Report) increased 1.3%, 2.9%, 1.6% and 1.8%, respectively.
On the other hand, the Health Care Select Sector SPDR (XLV) declined almost 1%, the highest among the S&P 500 sectors. Healthcare stocks were hit hard after the U.S. Supreme Court decided to hear a new challenge to a crucial part of President Barack Obama’s health care law. Previously, a federal appeals court ruling had supported IRS guidelines that allowed consumers to have health-insurance tax credits under the ObamaCare Act. The Supreme Court has decided to review this ruling as opponents of the law claim the subsidies are illegal.
Companies such as UnitedHealth Group Incorporated (UNH – Analyst Report), WellPoint Inc. (WLP – Analyst Report) and Aetna Inc. (AET – Analyst Report) saw their shares drop 2.7%, 2.9% and 1.9%, respectively.
Meanwhile, The Walt Disney Company (DIS – Analyst Report) ended fiscal 2014 on a high note. The company’s fourth-quarter adjusted earnings per share came in at 89 cents, up 16% year over year and a penny ahead of the Zacks Consensus Estimate. However, profit from its biggest division, TV networks, decreased. Shares dropped by 2.2%.
For the week, the S&P 500, the Dow and the Nasdaq gained 0.7%, 1% and 0.03%, respectively.
Last week, the European Central Bank’s (ECB) President Mario Draghi’s statement regarding possible expansion of monetary stimulus by the ECB improved investor sentiment.
US midterm election results also helped the rally. The Republicans notched a strong win in the midterm elections over the Democrats by having a majority in both chambers of Congress for the first time since 2006. Investors cheered the results as they expect that Republicans winning both chambers should help clear many bills. Encouraging economic data and some upbeat earnings results too had positive impact on the benchmarks.
However, benchmarks were under pressure on the first two days of the week, as oil prices ended lower. Saudi Arabia’s decision to reduce export prices of crude for the US market, while hiking them for Asia was the major trigger for the decline in oil prices. Oil prices snapped four sessions of losses last Wednesday.
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Stock Market News for November 10, 2014 – Zacks Investment …
