The Dow Jones and S&P 500 bolstered gains after former Treasury Secretary Lawrence Summers withdrew his name for consideration to succeed Federal Reserve chairman Ben Bernanke. The Nasdaq, however, was pulled marginally into the red due to the poor response for the new products launched by Apple Inc. Meanwhile, industrial production for the month of August came in as per estimates. However, the New York Empire State Index fell short of expectations. Of the top ten S&P 500 industry groups, industrials stocks gained the most. However, technology stocks suffered maximum losses.
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The Dow Jones Industrial Average (DJI) gained 0.8% to close the day at 15,494.78 The S&P 500 increased 0.6% to finish yesterday’s trading session at 1,697.6. The tech-laden Nasdaq Composite Index declined 0.1% to end at 3,717.84. The fear-gauge CBOE Volatility Index (VIX) increased 1.6% to settle at 14.38. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.63 billion shares, below 2013’s average of 6.24 billion shares. Advancing stocks outnumbered the decliners. For 31% shares that declined, 67% advanced.
During the early part of the trading day, benchmarks gained nearly 1% after Lawrence Summers withdrew his candidature for the Federal Reserve chairmanship. Investors welcomed this development positively as Summers was in favor of tapering the bond purchase program. With Summers withdrawal, investors believe the massive $85 billion monthly bond purchase program might stay in place. This decision comes at a time when the US Central bank is due to announce its decisions on the bond purchase program. Early gains were trimmed after US President Barack Obama reiterated that the debt ceiling of the country would not be extended.
A couple of domestic reports were released during yesterday’s trading session. According to a report released by the Federal Reserve System, industrial production for the month of August grew by 0.4%. This is line with the consensus estimate. Manufacturing production increased 0.7% compared to previous month’s drop of 0.4%. Manufacturing production increased primarily on the back of gains in automobile assembly. Automobile assembly grew by 5.2% compared to a drop of 4.5% last month. Utilities output declined for the fifth month in a row while mining production increased marginally, by 0.3%, compared to July’s reading of 2.4%.
The Empire State Manufacturing Survey Index released by the Federal Reserve Bank of New York declined 2 points to 6.3. This was below the consensus estimate of 9.3. Among its constituents, the new orders index and shipments index increased to 2.4 and 16.4, respectively. Prices paid came in at 21.5 while prices received increased to 8.6. General business conditions increased for the third consecutive month to 40.6.
The Nasdaq ended in the red as share prices of Apple Inc. (NASDAQ:AAPL) dropped 3.2% during yesterday’s trading session. Since last week, the share price of Apple has declined nearly 11%. This is primarily because its new iPhones have disappointed investors.
Industrial stocks gained the most during yesterday’s trading session. The Industrials SPDR (XLI) gained 1.3%. The General Electric Company (NYSE:GE), United Technologies Corporation (NYSE:UTX), The Boeing Company (NYSE:BA), Union Pacific Corporation (NYSE:UNP) and 3M Co (NYSE:MMM) gained 1.5%, 1.2%, 3.9%, 1.0% and 0.5%, respectively.
Technology stocks were the biggest loser among the top ten S&P 500 industry groups. The Technology SPDR (XLK) lost 0.1%. Stocks such as Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Hewlett-Packard Company (NYSE:HPQ) and Intel Corporation (NASDAQ:INTC) declined 0.2%, 0.7%, 1.5% and 0.2%, respectively.