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Major indices finished at record highs following better-than-expected economic reports from Germany and corporate results. Encouraging reports from China also boosted investor sentiment. Of the top ten S&P 500 industry groups, utilities stocks gained the most while technology stocks were the only loser.
The Dow Jones Industrial Average (DJI) increased 0.6% to close the day at 15,056.20. The S&P 500 gained 0.5% to finish yesterday’s trading session at 1,625.96. The tech-laden Nasdaq Composite Index rose 0.1% to end at 3,396.63. The fear-gauge CBOE Volatility Index (VIX) increased 0.2% to settle at 12.83. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.8 billion shares, well below 2013’s average of 6.36 billion shares. Advancing stocks outnumbered the decliners. For the 70% that advanced, 27% declined.
The Dow Jones and the S&P 500 closed at record highs yesterday. The Dow moved past the 15000-mark and closed at 15,056.20 while the S&P 500 closed at an all-time high for the fourth consecutive day. Yesterday’s trading session saw stocks chalking up profits as Germany posted better-than-expected industrial orders in March. German industrial orders for March increased to 2.2% compared to estimates of a -0.5%. Foreign orders increased 2.7% on the back of demand from Euro Zone countries, orders of which increased by 4.2%, while domestic orders increased 1.8%. Investors will closely watch German growth numbers for the first quarter scheduled for release next week.
"German industry seems to be overcoming its weak phase slowly. The significant increase in orders brings the quarter as a whole to a slight plus of 0.4 percent," added the ministry.
Encouraging economic data from the world’s second largest economy, China, added to investor optimism. China’s exports and imports surged 14.7% and 16.8%, respectively, compared to market expectations of 10.3% and 13.9%, respectively. The country’s trade surplus came in at $18.16 billion compared to expectations of $15.1 billion. On a sequential basis, exports inched up 2.7% while the imports dropped 7.7%.
These developments follow weak figures released by South Korea and Taiwan, indicating sluggish global demand. In spite of China registering better-than-expected export data, concerns over a global recovery continue to haunt investors as the country had reported weak manufacturing growth and employment figures recently.
On the domestic front, according to the data released by the Federal Reserve System, consumer credit rose 3.5%. Revolving credit decreased marginally while nonrevolving credit came in at 8% compared to the consensus estimate of 16%.
On the earnings front, shares of Fossil Inc. (NASDAQ:FOSL) gained about 9% after earnings beat the Street’s expectations. Net sales of the company increased 15% while earnings of the company increased 30% to $1.21 a share. The company performed well in countries like North America, Europe and Asia. Its Spanish joint venture also contributed to overall profits.
Of the top ten S&P 500 industry groups, utilities stocks gained the most. The Utilities SPDR (XLU) gained about 1.0%. Shares such as Duke Energy Corp (NYSE:DUK), Dominion Resources, Inc. (NYSE:D), Xcel Energy Inc. (NYSE:XEL), American Electric Power Company, Inc. (NYSE:AEP) and PPL Corporation (NYSE:PPL) rose 1.1%, 0.8%, 1.6%, 1.2% and 1.3%, respectively.
Technology shares were the only loser. The Technology SPDR (XLK) fell marginally, by 0.03%. Shares such as Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Facebook Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT) and Cisco Systems, Inc. (NASDAQ:CSCO) dropped 0.5%, 0.5%, 2.5%, 1.3% and 2.1%, respectively.