Stock Market News for November 24, 2014 – Zacks Investment …
Benchmarks ended higher on Friday after China’s central bank and ECB’s efforts to stimulate their economies boosted investor sentiment. The S&P 500 and the Dow finished at record levels for the 45th and 28th times this year, respectively. The Nasdaq also gained, but its advance was limited due to declines in large-tech companies. Meanwhile, all the three indexes recorded gains for the fifth-straight week.
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The Dow Jones Industrial Average (DJI) gained 0.5% to close at 17,810.06. The Standard & Poor 500 (S&P 500) also rose 0.5% to close at 2,063.50. The tech-laden Nasdaq Composite Index closed at 4,712.97; increasing 0.2%. The fear-gauge CBOE Volatility Index (VIX) declined 5% to settle at 12.90. A total of about 6.5 billion shares were traded on Friday, higher than month-to-date average of 6.35 billion. Advancers outpaced declining stocks on the NYSE. For 65% stocks that advanced, 32% declined.
People’s Bank of China and European Central Bank’s efforts to boost their economies were welcomed by investors. China’s central bank lowered its one-year deposit rate by 40 basis points to 5.60%. The central bank also trimmed its deposit rates by 25 basis points to 2.75%. This was the first time the apex bank cut its interest rates since Jul 2012. This decision came in at a time when China’s industrial production increased at 7.7%, the second weakest pace since 2009. China’s flash composite purchasing manager’s index (PMI) released by HSBC also declined to 50.0 in November, touching a 6-month low.
ECB President Mario Draghi said the apex bank is ready to “step up the pressure” and expand its asset-purchasing program provided inflation fails to return to its desired level. He said: “We will continue to meet our responsibility—we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us.”
ECB declared that it has started purchasing asset-backed securities in order to revive the economy. On Thursday, economic data out of Europe had a negative impact on investors. Markit’s flash PMI in Eurozone had decreased to 51.4 from October’s final reading of 52.1.
These stimulus measures helped the S&P 500 and the Dow to close at record levels. The S&P 500 was also boosted by gains in energy and material stocks. Energy shares gained on rise in oil prices. Prices of WTI crude oil and Brent crude oil increased 0.9% and 1.3% to $76.51 per barrel and $80.36 per barrel, respectively.
The Energy Select Sector SPDR (XLE) rose 1.3%, the highest among the S&P 500 sectors. Shares of key energy stocks including Exxon Mobil Corporation (XOM – Analyst Report), Chevron Corporation (CVX – Analyst Report), Schlumberger Limited (SLB – Analyst Report), ConocoPhillips (COP – Analyst Report) and EOG Resources, Inc. (EOG – Analyst Report) increased 1%, 1.1%, 1.8%, 0.6% and 2.3%, respectively.
The materials sector closely followed the energy sector. The Materials Select Sector SPDR (XLB) went up 1.2%. Key stocks from the sector such as E. I. du Pont de Nemours and Company (DD – Analyst Report), The Dow Chemical Company (DOW – Analyst Report), Monsanto Company (MON – Analyst Report), LyondellBasell Industries NV (LYB – Analyst Report) and Ecolab Inc. (ECL – Analyst Report) advanced 1%, 2.6%, 1.1%, 0.9% and 0.9%, respectively.
Meanwhile, Ross Stores Inc. (ROST – Analyst Report) and Autodesk, Inc. (ADSK – Analyst Report) were the biggest gainers among the S&P 500 components. Shares of Ross Stores and Autodesk climbed 7.3% and 6.1%, respectively. On the other hand, GameStop Corp. (GME) declined the most among the S&P 500 components after the company posted dismal quarterly results. Shares of GameStop plunged 13.1%.
However, declines among large tech-companies limited the tech-laden Nasdaq’s gains. Shares of Microsoft Corporation (MSFT) and Netflix, Inc. (NFLX) declined 1.5% and 2.1%, respectively. Overall, all 10 sectors of the S&P 500 ended in positive territory.
For the week, the S&P 500, the Dow and the Nasdaq gained 1.1%, 1% and 0.5%, respectively.
Benchmarks ended in the green zone for the week on encouraging economic data. Existing home sales gained in October, initial claims dropped and the Philadelphia Fed’s manufacturing index increased to 40.8, surpassing the consensus estimate of 16.8.
Upbeat retail earnings also boosted markets. Best Buy Co., Inc. (BBY), Dollar Tree, Inc. (DLTR), Target Corp. (TGT) and Lowe’s Companies Inc. (LOW) reported strong quarterly results. Moreover, Intel Corporation’s (INTC) encouraging earnings outlook helped tech shares post solid gains.
Meanwhile, rebound in oil prices boosted energy shares and healthcare stocks rallied on deal news between Actavis (ACT) and Allergan Inc. (AGN). On Monday, Actavis confirmed that it will be acquiring Botox maker Allergan in a cash and stock transaction valued at about $66 billion or $219 per share.
Easing global growth worries too boosted benchmarks. Improved investor confidence data from Germany and positive news from Japan reduced worries about global growth.
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Stock Market News for November 24, 2014 – Zacks Investment …
