The Dow and S&P 500 hit new highs on Friday, notching up their sixth consecutive week of gains riding high on Federal Reserve chair nominee Janet Yellen’s recent comments supporting the Central Bank’s stimulus program. Shares of Exxom Mobil Corp. moved higher after Warren Buffett’s Berkshire Hathaway Inc. revealed that it had acquired an additional stake worth $3.45 billion in the company on Friday. All S&P 500 sectors finished in the green, with the materials sector taking the lead.
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The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 15,961.70. The S&P 500 added 0.4% to finish Friday’s trading session at 1,798.18. The tech-laden Nasdaq Composite Index increased 0.3% to end at 3,985.97. The fear-gauge CBOE Volatility Index (VIX) declined 1.5% to settle at 12.19. Total volume on the NYSE was 3.3 billion shares. Advancing stocks outnumbered the decliners. For 63% shares that advanced, 33% declined.
The benchmarks’ strong finish on Friday can be largely attributed to Exxom Mobil Corporation (NYSE:XOM). Shares of Exxom Mobil increased 2.2% to $95.27 per share after Warren Buffet’s Berkshire Hathaway Inc. (NYSE:BRK.B) announced it had acquired an additional stake worth $3.45 billion-worth in Exxom Mobil.
Also helping the markets ends in the positive territory was Janet Yellen’s support for the central bank’s monetary stimulus measures. Yellen’s recent comments before the Senate Banking Committee gave indications that the current $85-billion stimulus program devised to support the economy will continue for some time. Holding true to her “dovish” stance, Yellen was vocal about her intentions to support the stimulus program during her confirmation hearing on Thursday. Yellen’s statements assured markets that the central bank might not reduce its $85 billion of monthly bond purchases until the very least, till March.
According to the Board of Governors of the Federal Reserve System, industrial production declined 0.1% in October. This was in contrast to the consensus estimate of a 0.1% gain and a 0.7% improvement in September. Manufacturing production gained 0.3% in October, registering its third consecutive month of gains. The index for mining dropped 1.6% after having climbed for six consecutive months, and the output of utilities dropped 1.1% after having jumped 4.5% in September. Capacity utilization for the industrial sector declined 0.2% in October to settle at 78.1%.
Separately, the November 2013 Empire State Manufacturing Survey released by the Federal Reserve Bank of New York indicated that manufacturing conditions weakened partially for New York manufacturers. The report shows that the general business conditions index fell four points to -2.2, its first negative reading since May. The new orders index entered negative territory, dropping thirteen points to -5.5. Also, the shipments index moved below zero with a 14 point drop to -0.5. The prices paid index dropped by 5 points to 17.1, acting as an indicator of a deceleration in input price increase. The prices received index declined to -4.0, signalling that selling prices had declined for the first time in two years.
Meanwhile, the U.S. Department of Commerce said wholesale inventories improved 0.4% in September, in line with the consensus estimate. The inventories sales ratio for September came in at 1.18, compared to 1.20 a year ago.
Shares of InterCloud Systems Inc. (NASDAQ:ICLD) rose nearly 271% after the cloud-based communications, computing and consulting service company declared its results. Third quarter revenues increased to $16.2 million. In the first three quarters, The Company reported a 448% increase in third quarter revenue, amounting to $13.2 million, compared to $3 million the year ago.
The materials sector was the biggest gainer among the S&P 500 industry groups on Friday. The materials SPDR (XLB) gained 0.6%. Stocks such as Monsanto Company (NYSE:MON), E I Du Pont De Nemours And Co (NYSE:DD), the Dow Chemical Company (NYSE:DOW), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), and Praxair, Inc. (NYSE:PX) added 0.5%, 0.5%, 0.3%, 1.4%, and 0.9% respectively.
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