Stock Market News for September 02, 2014 – September 2, 2014 …
Benchmarks settled in the green on Friday after promising economic numbers negated overseas tensions. Encouraging economic data on consumer sentiment and Chicago-area business conditions overshadowed concerns related to the Russia-Ukraine crisis and increased terror-threat level in the United Kingdom. Friday’s gains helped the S&P 500 close at a record high. The index finished above the 2k mark for the third time this week. The Nasdaq ended at its highest level since Mar 29, 2000. The blue-chip index is now 0.2% short of its record close achieved on Jul 16.
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The Dow Jones Industrial Average (DJI) gained 0.1% to close at 17,098.45. The Standard & Poor 500 (S&P 500) advanced 0.3% to settle at 2,003.37. The tech-laden Nasdaq Composite Index closed at 4,580.27; gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) dropped 0.6% to settle at 11.98. A total of 3.8 billion shares were traded on Friday, less than the monthly average of 5.29 billion. Advancers outpaced declining stocks on the NYSE. For 67% stocks that advanced, 28% declined.
A positive finish for benchmarks was ensured by encouraging economic data. The University of Michigan and Thomson Reuters’ final reading of consumer sentiment increased to 82.5 in August, up from the earlier estimate of 79.2. The rise in consumer sentiment was also more than the consensus estimate of an increase to 80.3.
Chicago PMI numbers were also encouraging. The Institute for Supply Management-Chicago noted that Chicago Business Barometer jumped to 64.3 in August from July’s reading of 52.6. This rise in the Chicago Purchasing Managers Index in August was more than the consensus estimate of an increase to 56.8.
Separately, according to the Bureau of Economic Analysis, personal income increased 0.2% in July, less than the consensus estimate of a rise by 0.3%. This rise in personal income came after it had increased 0.5% in June. However, personal consumption expenditure decreased 0.1% in July, in contrast to the consensus estimate of an increase by 0.1%. Personal consumption expenditure rose 0.4% in June.
Encouraging economic data overshadowed geopolitical concerns. Russian President Vladimir Putin accused Ukraine of continuing military operations. Putin has compared Ukrainian military tactics to that of Nazis when they invaded Russia. His statements came in as Ukraine sought full membership of North Atlantic Treaty Organization and the abolishment of a law banning membership in military blocs.
Meanwhile, in United Kingdom the international terror threat level was increased to “severe” from “substantial” by the country’s Joint Terrorism Analysis Centre. Home Secretary Theresa May said: “The increase in the threat level is related to developments in Syria and Iraq where terrorist groups are planning attacks against the West.”
Coming back to domestic events, shares of Avago Technologies Limited (AVGO – Analyst Report) climbed 7.5% after the company recorded strong third-quarter fiscal 2014 results. The chipmaker ended at an all-time high of $82.09. Avago Technologies also performed the best among the S&P 500 components. Shares of Avago’s key customer, Apple Inc. (AAPL – Analyst Report), also closed at an all-time high of $102.50, up 0.2%
Eight out of 10 sectors of the S&P 500 ended in the green. The Utilities Select Sector SPDR ETF (XLU) was the biggest gainer among the S&P 500 sectors. The sector gained almost 0.7%. Key utilities stocks from the sector such as Exelon Corporation (EXC – Analyst Report), Duke Energy Corporation (DUK – Analyst Report), DTE Energy Company (DTE – Analyst Report) and Southern Company (SO – Analyst Report) increased 1.3%, 0.9%, 0.4% and 0.4%, respectively.
Benchmarks posted gains for the fourth successive week. For the holiday shortened-week, the S&P 500, the Dow and the Nasdaq gained 0.8%, 0.6% and 0.9%, respectively.
During the week, the S&P 500 ended above the 2k mark for the first time following encouraging economic data on Tuesday. A rise in Consumer Confidence Index and positive durable orders report boosted investor sentiment. Benchmarks were also boosted by a new deal between Burger King Worldwide (BKW – Analyst Report) and Tim Hortons Inc. (THI – Snapshot Report).
Possibility of stimulus measures in the Eurozone lifted benchmarks on Monday. However, dismal inflation rate data from Eurozone and concerns about Russia-Ukraine tension had negative impact on benchmarks on Thursday.
For the month, the S&P 500 advanced 3.8%. The index registered its best August performance since 2000. The Dow and the Nasdaq too gained 3.2% and 4.8%, respectively. The Dow and S&P 500 registered best monthly gains since February.
Encouraging economic data from the housing sector, upbeat ISM Services Index, positive factory orders and favorable trade balance helped benchmarks end in the green for the month.
Upbeat earnings from companies such as Home Depot, Inc. (HD – Analyst Report), Target Corp. (TGT – Analyst Report), American Eagle Outfitters, Inc. (AEO – Analyst Report), Time Warner Inc. (TWX – Analyst Report), Twenty-First Century Fox, Inc. (FOXA), Molson Coors Brewing Company (TAP), Coach, Inc. (COH) and Toyota Motor Corporation (TM) helped to improve investor sentiment.
News of a deal between Dollar General Corporation (DG) and Family Dollar Stores Inc. (FDO) was also welcomed by investors.
Geopolitical tensions continued to affect mood. The Russia-Ukraine crisis led to fresh sanctions against Russia. In response, Russia imposed ban on food import from Europe and the US. Violence in Iraq was also a lingering problem. Economic data from Europe were dismal. However, a recovery plan for Portugal’s banking crisis improved sentiment.
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Stock Market News for September 02, 2014 – September 2, 2014 …
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