Stocks ended nearly flat, as investors took a breather after yesterday’s bull run. Meanwhile the Dow finished at new record high for the second consecutive day. Trading volumes for the day remained low. The energy sector was the biggest gainer among the S&P 500 industry groups while utilities stocks incurred maximum losses.
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The Dow Jones Industrial Average (DJI) gained about 0.1% to close the day at 16179.08. The S&P 500 declined 0.1% to finish yesterday’s trading session at 1809.60. The tech-laden Nasdaq Composite Index decreased 0.3% to end at 4058.13. The fear-gauge CBOE Volatility Index (VIX) increased 2.54% to settle at 14.15. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.4 billion shares. Declining stocks outnumbered the advancers. For 57% shares that declined, only 40% advanced.
Benchmarks ended nearly unchanged as investor sentiment dipped following the release of disappointing economic reports. The Federal Reserve’s stimulus program will undergo a modest taper of $10 billion, reducing bond purchases to $75 billion a month from January 2014. The announcement which had led markets to record highs on Wednesday. However, the effects of this development faded yesterday.
The National Association of Realtors reported existing home sales numbers. According to the report, existing home sales fell 4.3% to a seasonally adjusted annual rate of 4.90 million in November from 5.12 million in October. This was below the consensus estimate of 5.03 million. Existing home sales were also 1.2% below the 4.96 million-unit pace in November 2012. This was the first time in twenty-nine months that sales fell below year ago levels.
Commenting on these numbers, NAR chief economist Lawrence Yun said: “home sales are hurt by higher mortgage interest rates, constrained inventory and continuing tight credit”. Yun added: “There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new home construction. As such, rents are rising at the fastest pace in five years, while annual home prices are rising at the highest rate in eight years”.
Coming to initial claims numbers, the U.S. Department of Labor noted that initial claims increased 10,000 to 379,000 from previous week’s figure of 369,000. This was below the consensus estimate of 334,000. The four-week moving average increased 13,250 to 343,500 from previous week’s revised average of 330,250.
Shares of Oracle Corporation (NYSE:ORCL) jumped nearly 5.8% to $36.60 per share after the company announced its quarterly results. The company’s earnings came in above the Street’s estimates. Excluding one-time items, Oracle reported earnings per share of $0.69, beating the analysts’ expectations of $0.67. Revenue increased to $9.3 billion, beating expectations of $9.2 billion. However, the company posted a decline of 1% in sales of new software and Internet based software subscriptions.
The energy sector was the biggest gainer among the S&P 500 industry groups on Thursday. The Energy SPDR (XLE) gained 0.3%. Stocks such as Chevron Corporation (NYSE:CVX), Occidental Petroleum Corporation (NYSE:OXY), Pioneer Natural Resources (NYSE:PXD), EOG Resources Inc. (NYSE:EOG), and Apache Corporation (NYSE:APA) increased 1.3%, 0.7%, 2.0%, 2.1% and 0.8%, respectively.
The utilities sector incurred maximum losses. The Utilities SPDR (XLU) lost 0.7%. Stocks such as Duke Energy Corp (NYSE:DUK), Dominion Resources, Inc. (NYSE:D), The Southern Company (NYSE:SO), Exelon Corporation (NYSE:EXC), and American Electric Power Company Inc. (NYSE:AEP) decreased 0.8%, 0.4%, 0.5%, 2.5%, and0.3%, respectively.