The Veterans Day holiday kept volumes down on Monday and benchmarks added meager gains during a mostly uneventful trading session. However, the gains were sufficient for the Dow to clinch another record high, the thirty fifth such instance this year. Among the S&P 500 industry groups, health care stocks gained the most, whereas the consumer staples sector incurred huge losses.
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The Dow Jones Industrial Average (DJI) climbed 0.1% to close the day at 15,783.10. The S&P 500 rose 0.1% to finish yesterday’s trading session at 1,771.89. The tech-laden Nasdaq Composite Index gained 0.01% to end at 3,919.79. The fear-gauge CBOE Volatility Index (VIX) dropped 2.9% to settle at 12.53. Consolidated volumes on the New York Stock Exchange were roughly 2.54 billion shares. Advancing stocks outnumbered the decliners. For 50% shares that advanced, only 46% declined.
Stocks moved moderately higher on Monday during a thinly traded session owing to the Veterans Day holiday. Nonetheless, the Dow rallied toward a record high for the third time in the month, and the thirty fifth time this year. Such gains are primarily attributable to an encouraging jobs report. Investors now believe that the economy’s has gained sufficient strength to withstand the Federal Reserve’s tapering of its stimulus program. Such a move is expected to happen as soon as December.
Apart from yesterday’s session being low on volumes, there was little news which could impact the benchmarks’ movement. Among the few developments, Viropharma Inc. (NASDAQ:VPHM) shares jumped 25.5 % to $49.41, following news that Shire PLC will purchase the company for $4.2 billion.
Shares of Transocean Ltd. (NYSE:RIG) gained 3.8% to touch $55.49 per share, after the company announced it had reached an agreement with investor Carl Icahn to pay a dividend of $3 per share. The offshore driller has also reached an agreement with Icahn to reduce the size of its board.
Jobs data published on Friday showed that 204,000 jobs were created in October, better than the consensus estimate of 114,000 jobs. The report led investors to believe that the Federal Reserve would reduce its level of bond purchases by next month itself.
Supporting the above expectations are last week’s comments from members of the central bank who said the Federal Reserve should reduce its asset purchases only when it receives clear indications that the economy is improving. However, the three Fed officials did not comment on exactly when they believe the stimulus program should be withdrawn.
Twitter Inc. (NYSE:TWTR) which made its debut in the stock market on Thursday last week, dropped marginally, by 0.05% to end yesterday’s trading day at $41.63 per share. The company ended Thursday trading session at $44.90, a 73% jump from its $26 initial public offering (IPO) price. Prices had increased to more than $50 during the trading day.
Coming back to yesterday’s session, the healthcare sector was the biggest gainer among the S&P 500 industry groups and the Health Care SPDR (XLV) gained 0.24%. Stocks such as Johnson & Johnson (NYSE:JNJ), Merck & Co., Inc. (NYSE:MRK), Gilead Sciences, Inc. (NASDAQ:GILD), Bristol-Myers Squibb Co (NYSE:BMY), and AbbVie Inc. (NYSE:ABBV) added 0.3%, 0.4%, 0.2%, 0.4%, and 1.1%, respectively.
Consumer staples were the biggest loser among the S&P 500 industry groups as the Consumer Staples SPDR (XLP) lost 0.3%. Stocks such as The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), Altria Group Inc. (NYSE:MO), and Colgate-Palmolive Company (NYSE:CL) slipped 0.3%, 0.5%, 0.5%, 0.3%, and 0.3%, respectively.