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Benchmarks finished in the green propelled by a modest rally in the materials and the energy sectors on Tuesday. The Dow Jones logged a new closing high yesterday. Alcoa was the first Dow company to kick off the earnings season. Meanwhile, China’s consumer price index declined in the month of March. Federal Reserve is scheduled to release its minutes of its latest meeting on Wednesday. The materials sector was the biggest gainer among the S&P 500 industry groups whereas utilities stocks were the major loser.
The Dow Jones Industrial Average (DJI) gained 0.4% to close the day at 14,673.46. The S&P 500 added 0.4% to finish yesterday’s trading session at 1,568.61. The tech-laden Nasdaq Composite Index inched up 0.5% to end at 3,237.86. The fear-gauge CBOE Volatility Index (VIX) fell 2.7% to settle at 12.84. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.71 billion shares, significantly lower than 2012’s daily average of 6.45 billion shares. Advancing stocks outnumbered the decliners. For the 59% that advanced, 37% declined.
Alcoa Inc (NYSE:AA) reported its first quarter results after the close of markets on Monday. The first Dow company to post results, Alcoa’s profits came in above the Street’s estimate due to increase in demand from aircraft and car manufacturers. But revenue fell short of expectations. Shares of the company remained unchanged yesterday. According to Thomson Reuters data, profits of S&P 500 companies are expected to increase by 1.5% from the same quarter a year ago. Banking major JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co (NYSE:WFC) are scheduled to report quarterly results on Friday.
On the international front, China’s consumer price index declined to 2.1% in March from February’s figure of 3.2%. The country was experiencing annual inflation of nearly 4% a year earlier. But producer price deflation has increased. Sun Junwei, China economist at HSBC in Beijing said: “We think the inflation outlook remains benign. If you look at the overall demand picture, China is recovering but the pace is still very gradual which means inflation is not a near-term concern.”
On the home front, the U.S. Census Bureau reported wholesale inventories numbers on Tuesday. According to the report, wholesale inventories posted it biggest decline in nearly one and half years in February. Wholesale inventories fell 0.3% from the revised January’s figure of 0.8%. This was in contrast to the consensus estimate of an increase of 0.5%. Inventories of computer and computer peripheral equipment and software edged up 2.2% from the previous month. Inventories of farm product raw materials declined 5.7% from last month and inventories of drugs and druggists' sundries decreased 3.0%.
Utilities stocks were the major loser among the S&P 500 industry groups and the Utilities SPDR (XLU) lost 0.3%. Stocks such as Duke Energy Corp (NYSE:DUK), Dominion Resources, Inc. (NYSE:D), NextEra Energy, Inc. (NYSE:NEE), The Southern Company (NYSE:SO) and El Paso Electric Company (NYSE:EE) fell 0.5%, 0.4%, 0.9%, 0.4% and 1.3%, respectively.
The materials sector was the biggest gainer among the S&P 500 industry groups and the Materials Select Sector SPDR (XLB) gained 1.2%. Stocks such as E I Du Pont De Nemours And Co (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Monsanto Company (NYSE:MON), American Vanguard Corp. (NYSE:AVD) and 3M Co (NYSE:MMM) added 0.9%, 2.5%, 0.1%, 1.0% and 0.2%, respectively.