Benchmarks dropped from their record highs on Monday as lack of any major news left investors worried about where to bet their money on. As a result, it was also the lightest trading session of the year. The only actions of the day worth noting were the better-than-expected July’s non-manufacturing ISM data and Eurozone witnessing a contraction in retail sales. Of the top ten S&P 500 industry groups, technology stocks gained the most, while utilities 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) lost 0.3% to close the day at 15,612.13. The S&P 500 decreased 0.2% to finish Friday’s trading session at 1,707.14. The tech-laden Nasdaq Composite Index gained 0.4% to end at 3,692.95. The fear-gauge CBOE Volatility Index (VIX) dropped 1.2% to settle at 11.84. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.6 billion shares, well below than 2013’s average of 6.4 billion shares. Declining stocks outnumbered the advancers. For the 40% shares that advanced, 57% declined.
The S&P 500 had ended in the green in five out of past six weeks, gaining about 7% to a record high. However, the benchmark retreated from its record high during yesterday’s trading session.
Better-than-expected non-manufacturing ISM released yesterday did little to spark positive sentiment. According to the Institute for Supply Management, non-manufacturing ISM grew to 56% in July, compared with 52.2% recorded in June. Among the factors which constitute the index, business activity index, new orders index and employment index came in at 60.4%, 57.7% and 53.2%, compared with previous month’s reading of 51.7%, 50.8% and 54.7%, respectively. For the month of July, 16 non-manufacturing industries have reported growth.
On the international front, Eurostat reported a 0.5% fall in retail sales in June compared to an increase of 1.1% in May. The decline was attributable to fewer sales of items such as food, drink, tobacco, electronics, clothing and internet goods. Sale of food, drink and tobacco witnessed a fall of 0.6%. However, sale of electronic items, internet goods and clothing slipped 0.2%. Maximum spending was seen on automotive fuel. Retail sales in Germany dropped 1.5%. However, the same increased 0.6% in France.
On the earnings front, shares of HSBC Holdings plc (NYSE:HBC) dropped 4.5% after its results came in below than the Street’s expectations. The company made a profit of $14.1 billion in first half of 2013, while the revenues came in at $34.37 billion for the same period. Both the numbers were marginally below than expectations. However, profits increased 10% year on year.
Shares of Tyson Foods, Inc. (NYSE:TSN) increased 1.2% after its results beat analysts’ expectations. Results of the company improved on the back of increased demand in chicken and beef sales. Sales of chicken increased about 11% to $3.16 billion, while beef sales witnessed an increase of 7% to $3.72 billion. However, pork sales slipped 0.9%.
Technology sector was the biggest gainer among the S&P 500 industry groups. Technology SPDR (XLK) gained 0.2%. Shares of companies like Apple Inc. (NASDAQ:AAPL), Adobe Systems Incorporated (NASDAQ:ADBE), BlackBerry Ltd (NASDAQ:BBRY), Hewlett-Packard Company (NYSE:HPQ) and Yahoo! Inc. (NASDAQ:YHOO) gained 1.5%, 0.4%, 7.4%, 0.1% and 0.1%, respectively.
Utilities stocks suffered the most during yesterday’s trading session. Utilities SPDR (XLU) lost 0.7%. Shares such as NRG Energy Inc. (NYSE:NRG), Wisconsin Energy Corporation (NYSE:WEC), SCANA Corporation (NYSE:SCG), PG&E Corporation (NYSE:PCG) and NextEra Energy, Inc. (NYSE:NEE) lost 0.5%, 0.7%, 0.5%, 1.3% and 1.0%, respectively.