Stock Market News for November 20, 2014 – Zacks Investment …
Markets retreated from record highs on Wednesday to finish in the red as Fed minutes failed to provide any clear indications about a possible rate hike. Moreover, mixed housing data also weighed on investor sentiment. However, upbeat earning results helped retail stocks to post solid gains on Wednesday.
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) declined meager 0.01% to close at 17,685.73. The Standard & Poor 500 (S&P 500) decreased almost 0.2% to close at 2,048.72. The tech-laden Nasdaq Composite Index closed at 4,675.71; declining 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 0.7% to settle at 13.96. A total of about 6.3 billion shares were traded on Wednesday, lower than monthly average of 6.4 billion. Decliners outpaced advancing stocks on the NYSE. For 60% stocks that declined, 37% advanced.
On Wednesday, the Federal Open Market Committee (FOMC) released minutes for the meeting that took place on Oct 28-29. In the minutes, FOMC mentioned that some Federal Reserve officials had doubts about whether the 2% inflation rate target could be achieved. The minutes stated: “Participants anticipated that inflation would be held down over the near term by the decline in energy prices and other factors, but would move toward the Committee’s 2 percent goal in coming years, although a few expressed concern that inflation might persist below the Committee’s objective for quite some time.”
Fed officials also debated over the issue of hiking interest rate. Though the FOMC reaffirmed that it would maintain interest rate near zero level for “a considerable time,” they also said it may hike the same earlier if the economy strengthens. Policymakers voted 9:1 in favor of terminating the bond purchasing program. Lack of enough clues regarding hiking interest rates dented investor sentiment on Wednesday.
Separately, the U.S. Department of Commerce reported that privately-owned housing starts declined by 2.8% to 1,009,000 from September’s revised tally of 1,038,000. The October number was also behind the consensus estimate of 1,025,000. However, single-family housing starts gained 4.2% in October to 696,000 from September’s revised figure of 668,000. This was the highest rate of increase in this category since Nov 2013. Additionally, building permits also increased at a rate of 4.8% in October to 1,080,000, beating the consensus estimate of 1,040,000.
On the earnings front, shares of Target Corp. (TGT – Analyst Report) jumped 7.4% after posting third quarter adjusted earnings per share of 54 cents, ahead of the Zacks Consensus Estimate of 47 cents. The company also reported quarterly revenues of $17,732 million, higher than the Zacks Consensus Estimate of $17,529 million. Better-than-expected U.S. sales and improved performance from Canada were responsible for these impressive results.
Lowe’s Companies Inc.’s (LOW – Analyst Report) shares gained 6.4% after announcing third quarter earnings per share of 59 cents, a cent higher than the Zacks Consensus Estimate and 25.5% higher than year-ago quarter. Further, Lowe’s raised its earnings guidance for fiscal 2014 to $2.68 per share compared with $2.63 per share guided earlier. Currently, the Zacks Consensus Estimate for the fiscal stands at $2.62 per share.
These solid earnings results helped the Consumer Discretionary Select Sector SPDR (XLY) gain 0.4% on Wednesday. Key stocks from this sector including Best Buy Co., Inc. (BBY – Analyst Report), Urban Outfitters Inc. (URBN – Analyst Report), Macy’s, Inc. (M – Analyst Report) and The Gap, Inc. (GPS – Analyst Report) gained 1.8%, 2.6%, 0.9% and 0.5%, respectively.
However, technology shares suffered most in Wednesday’s trading. The Technology Select Sector SPDR (XLK) was the biggest loser among the S&P 500 sectors which declined 0.7% yesterday. Key technology stocks including Yahoo! Inc. (YHOO – Analyst Report), Facebook, Inc. (FB – Analyst Report), Microsoft Corporation (MSFT – Analyst Report) and Apple Inc. (AAPL – Analyst Report) declined 2.3%, 1.4%, 1.1% and 0.7%, respectively. Six of the 10 S&P sectors registered losses on Wednesday.
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Stock Market News for November 20, 2014 – Zacks Investment …
