Benchmarks ended in the green on Friday following exceptionally strong manufacturing data that negated concerns related to the Federal Reserve’s tapering of its stimulus program. Market watchers believe that the Fed might now lower its quantum of bond purchases sooner than expected. Among the S&P 500 industry groups, the industrial sector gained the most while energy stocks ended on the losing side.
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The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 15,615.55. The S&P 500 added 0.3% to finish Friday’s trading session at 1,761.64. The tech-laden Nasdaq Composite Index increased 0.1% to end at 3,922.04. The fear-gauge CBOE Volatility Index (VIX) declined 3.4% to settle at 13.28. Total volume on the NYSE was 3.7 billion shares. Declining stocks outnumbered the advancers. For 53% shares that declined, 44% advanced.
According to the Institute of Supply Management, the Purchasing Managers Index (PMI) for October increased to 56.4% from September’s figure of 56.2%. This is also higher than the consensus estimate of 54.9%. The New Orders Index increased 0.1% to 60.6% in October, while the Production Index dropped 1.8% to finish at 60.8%. Both the New Orders Index and Production Index have now come in above the 60% mark for three consecutive months in a row. The Employment Index was at 53.2%, a decrease of 2.2% compared to September results of 55.4%.
The report shows that the country’s manufacturing sector has expanded at its fastest pace in two and half years. Strong ISM data negated concerns arising out of speculation that the Fed may taper its bond purchases sooner than expected. On Wednesday, the Fed had announced its decision not to taper its $85 billion bond buying program due to the series of weak domestic reports that have been released recently.
Chevron Corporation’s (NYSE:CVX) earnings numbers came in behind the Street’s expectations. The company reported earnings per share of $2.57 and revenues of $118.01 billion. Net income fell to $4.95 billion from $5.25 billion a year earlier. Shares fell 5 cents to $125.45 in afternoon trading and had declined almost 1.7% by the end of the session.
Also, First Solar, Inc. (NASDAQ:FSLR) reported its third quarter earnings on Thursday, beating the Street’s expectations. The company reported adjusted earnings per share of $2.28 and revenues of nearly $1.3 billion. The company was estimated to report earnings per share of $1.00 and revenues of $988.63 million. First Solar had gained nearly 17% by the end of the session.
The industrials sector was the biggest gainer among the S&P 500 industry groups on Friday. The Industry SPDR (XLI) gained 0.7%. Stocks such as General Electric Company (NYSE:GE), The Boeing Company (NYSE:BA), United Technologies Corporation (NYSE:UTX), 3M Co (NYSE:MMM), and Union Pacific Corporation (NYSE:UNP) increased 1.5%, 1.9%, 1.2%, 0.04%, and 0.9%, respectively.
The Energy sector was the biggest loser among the S&P 500 industry groups on Friday. The Energy SPDR (XLE) lost 0.4%. Stocks such as Chevron Corporation (NYSE:CVX), Schlumberger Limited. (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY), ConocoPhillips (NYSE:COP) and Anadarko Petroleum Corporation (NYSE:APC) decreased 1.6%, 0.8%, 0.5%, 0.3%, and 0.9% respectively.