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The Dow Jones and the S&P 500 garnered further gains following encouraging economic data. The Dow touched a new high while the S&P came closer to its highest point. Improved job data provided by the ADP report acted as a catalyst to investor sentiment yesterday. Meanwhile, positive sentiments were also fuelled by encouraging data provided by the Fed’s Beige Book. Among the top ten S&P 500 industry groups, materials were the biggest gainer and consumer staples stocks were the biggest losers.

The Dow Jones Industrial Average (DJI) gained 0.3% to close the day at 14,296.24. The S&P 500 increased 0.1% to finish yesterday’s trading session at 1,541.46. The tech-laden Nasdaq Composite Index lost 0.1% to end at 3,222.36. The fear-gauge CBOE Volatility Index (VIX) gained almost 0.1% to settle at 13.53. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.3 billion shares, below the daily average of 6.48 billion shares. Advancing stocks outnumbered the decliners. For the 54% that advanced, 43% declined.

Positive economic data fuelled optimism in investor sentiment yesterday. According to the Federal Reserve’s Beige Book, the country’s housing market is experiencing a recovery and consumer spending is increasing, indicating growth in the economy. There has been a gradual growth in January and early-February. Most of the districts witnessed growth in consumer spending, retail sales, tourism, manufacturing sector, auto sector and residential construction industries. On the negative side, districts faced inventory shortage problems and pricing pressures. Wages were mostly constant and there was a shortage of skilled people.

Positive investor sentiment was also fuelled by encouraging private sector employment numbers. According to Automatic Data Processing (NASDAQ:ADP) 198,000 jobs were added to the U.S. nonfarm private business sector from January to February. Out of 198,000, 77,000 jobs were added by small businesses, 65,000 jobs were added by medium businesses and 57,000 were added by large businesses. The goods-producing sector added 34,000 jobs, of which 9,000 were in the manufacturing sector and 21,000 in the construction sector. Service sector accounted for 164,000 more jobs.

Meanwhile, the U.S. Department of Commerce, new orders for manufactured goods decreased in January by 2% or $9.6 billion. This is was above the consensus estimate of a decrease of 2.3% and below December’s figure of a 1.3% increase. New orders have been down for two out of three months. Shipments decreased marginally by 0.2% or $1.0 billion. This is the second consecutive month when the shipments have decreased. Unfulfilled orders declined after four consecutive monthly increases of 0.2% or $2.0 billion.

On the earnings front, shares of Staples, Inc. (NASDAQ:SPLS) dropped 7.2% after quarterly revenue missed the Street’s estimates. However, earnings marginally beat the expectations. The company also provided weak guidance for the next fiscal due to lower discretionary spending in North America and Europe.

Materials stocks were the biggest gainers among the top ten S&P 500 groups. The Materials Select Sector SPDR (XLB) gained 0.9%. Stocks such as the Dow Chemical Company (NYSE:DOW), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), LyondellBasell Industries NV (NYSE:LYB), Ecolab Inc. (NYSE:ECL) and International Paper Company (NYSE:IP) gained 1.6%, 4.1%, 2.9%, 0.5% and 1.8%, respectively.

Consumer staples were the biggest losers among the top ten S&P 500 groups. The Consumer Staples Select Sect. SPDR (XLP) lost 0.2%. Stocks such as Wal-Mart Stores, Inc. (NYSE:WMT), PepsiCo, Inc. (NYSE:PEP), Altria Group Inc. (NYSE:MO), Walgreen Company (NYSE:WAG) and General Mills, Inc. (NYSE:GIS) lost 0.5%, 0.1%, 0.3%, 1.9% and 0.1%, respectively.

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