Stock Market News for November 14, 2013 – Zacks Investment …
The Dow and S&P 500 finished at record highs on Wednesday boosted by strong earnings result from Macy’s that sparked optimism about a strong holiday season. Also helping the mood were comments from Janet Yellen, ahead of her confirmation as the next Fed chairman. Yellen said there is “more work to do” to boost the economy and labor market. All the sectors in the S&P 500 industry groups ended in the green, with consumer discretionary stocks ending at the top.
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The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 15,821.63. The S&P 500 increased 0.8% to finish yesterday’s trading session at 1,782.00. The tech-laden Nasdaq Composite Index rose 1.2% to end at 3,965.58. The fear-gauge CBOE Volatility Index (VIX) declined 2.34% to settle at 12.52. Consolidated volumes on the New York Stock Exchange were 3.37 billion shares. Advancing stocks outnumbered the decliners. For 66% shares that advanced, only 31% declined.
Much of the day’s gains were aided by Macy’s, Inc. (NYSE:M) which reported better-than-expected quarterly earnings. The company reported net income of $177 million or 47 cents per share in the third quarter, up from $145 million or 36 cents per share earned in the previous year. Comparable store sales increased 3.5% in the third quarter. Shares of the company rose 9.4% to $50.68.
The company gave a positive forecast for its sales in the holiday season. Comparable sales are expected to increase in the range of 2.5% to 4% in the second half of this year, and between 2.5% to 2.9% for the whole year. The company’s expects fiscal earnings for 2013 to be in the range of $3.80 to $3.90 per share. These developments lifted consumer discretionary shares, subsequently driving the broader markets upwards.
Federal Reserve Vice Chairman, Janet Yellen made introductory remarks, before her confirmation hearing as the next Chairman of the Federal Reserve on Thursday. In her prepared speech, Janet Yellen said there is “more work to do” with respect to the economy and the labor market which are still performing below expectations. Market watchers are of the view that these remarks indicate that the Fed may not taper its bond purchases in the near future. Speaking to the Senate Banking Committee on Thursday, Yelllen said: “I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”
In corporate developments, an arbitrator said on Tuesday that Starbucks Corporation (NASDAQ:SBUX) would have to pay Kraft Foods Group (NASDAQ:KRFT) a sum of $ 2.23 billion for damages coupled with $527 million as interest and legal fees. This in lieu of ending its agreement with Kraft relating to retail packaged coffee vending, marketing and distribution.
Following this development, Starbucks will restate its results for the fourth quarter which will reflect a net loss of $1.64 per share. On Wednesday, Starbucks Chief Executive Howard Schultz commented: “It’s difficult when a decision like this goes against you. But it is a one-time charge in a single moment in time, and now it’s behind us.”
The consumer discretionary sector was the biggest gainer among the S&P 500 industry groups and the consumer discretionary SPDR (XLY) gained 1.6%. Stocks such as Amazon.com, Inc. (NASDAQ:AMZN), Comcast Corporation (NASDAQ:CMCSA), the Walt Disney Company (NYSE:DIS), the Home Depot, Inc. (NYSE:HD), and McDonald’s Corporation (NYSE:MCD) added 1.9%, 0.9%, 1.8%, 1.9%, and 0.5%, respectively.
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Stock Market News for November 14, 2013 – Zacks Investment …
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