Benchmarks finished marginally in the green due to rising prices of gold and copper. Dismal home sales and weaker-than-expected earnings from McDonalds trimmed yesterday’s gains to a large extent. On the international front, a couple of countries of the Euro Zone region managed to reduce debt in the first quarter. Of the top ten S&P 500 industry groups, financials stocks gained the most. Energy stocks were the biggest losers.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) increased 0.01% to close the day at 15,545.55. The S&P 500 added 0.2% to finish yesterday’s trading session at 1,695.53. The tech-laden Nasdaq Composite Index added 0.4% to end at 3,600.39. The fear-gauge CBOE Volatility Index (VIX) declined 2.0% to settle at 12.29. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.2 billion shares, below 2013’s average of 6.4 billion shares. Advancing stocks outnumbered the decliners. For the 55% that advanced, 41% declined.
Benchmarks eked out profits yesterday on the back of rising gold and copper prices. Gold prices plunged last month due to the fact that the bond purchase program is nearing its end. However, after it was confirmed that the closure of the program depends on the economic situation of the country, prices have started rising. Rise in the gold prices weakened the impact of negative earnings from McDonalds and weak home sales data.
Shares of McDonald's Corporation (NYSE:MCD) lost 2.7% after it posted revenue and earnings below the Street’s estimates. Low revenue and earnings is attributable to weak sales in Asia and Europe. However, the company witnessed strong sales in the U.S. Sales and earnings of the company came in at $7.08 billion and $1.38 a share, respectively. The company said this year’s results could pose a challenge for the company as sales in Europe are on the decline. According to the Thomson Reuters data, 109 S&P 500 companies have declared results up to now. 64.2% of these companies have beaten estimates.
According to the National Association of Realtors, existing home sales data for June came in 5.08 million, well above previous year’s figure of 4.41 million. However, this was below the consensus estimates of 5.26 million. Available for sale homes increased 1.9% to 2.19 million which is equivalent to 5.2 months of supply, at the prevailing rate. For the 16th straight month, median price of all types of homes increased 13.5% year over year to $214,200.
On the international front, only two countries of the Euro Zone region managed to cut short their deficit in the first quarter of 2013. Germany reduced its public debt to 81.2% of its Gross Domestic Product (GDP) from 81.9% in the fourth quarter of 2012. Estonia reduced its public debt marginally to 10.0% from 10.1%. Estonia also holds the lowest GDP to debt ratio in the whole region. In the Euro Zone region, there are five countries whose public debt is more than 100% of its GDP. The list is led by Greece whose public debt is 160.5% of its GDP, followed by Italy whose public debt is 130.3% of its GDP.
Of the top ten S&P 500 industry groups, financials stocks were the biggest gainers. On 10 out of the past 12 trading days, the Financials SPDR has minted highest gains. The Financials SPDR (XLF) gained 0.7%. Shares such as Bank of America Corp (NYSE:BAC), Goldman Sachs Group Inc. (NYSE:GS), Wells Fargo & Co. (NYSE:WFC), JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc. (NYSE:C) gained 1.2%, 1.2%, 0.4%, 0.7% and 1.2%, respectively.
The energy sector was the biggest loser among the S&P 500 industry groups and the Energy Select Sector SPDR (XLE) lost 0.3%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Anadarko Petroleum Corporation (NYSE:APC), Hess Corp. (NYSE:HES), Occidental Petroleum Corporation (NYSE:OXY) and ConocoPhillips (NYSE:COP) declined 0.4%, 1.9%, 0.9%, 0.1% and 0.3%, respectively.