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Benchmarks finished Monday’s trading session nearly flat after recovering from day’s initial losses caused due to a drop in China’s export data and less-than-expected growth in Japan’s economy. Also, ‘hairline cracks’ in Boeing’s 787 dreamliners weighed somewhat on the mood. However, a new deal between two of the world’s oldest fruit importers Chiquita and Fyffes, and better-than-expected earnings forecast from Alexion Pharma restricted losses. 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 0.2% to close Monday’s trading session at 16,418.68. The Standard & Poor (S&P 500) edged down 0.05% to finish at 1,877.17. The tech-laden Nasdaq Composite Index declined marginally by 0.04% to 4,334.45. The fear-gauge CBOE Volatility Index (VIX) increased 0.6% to settle at 14.20. Total volume on the New York Stock Exchange was 3 billion shares. Advancing stocks were outnumbered by declining stocks on the NYSE. For 43% stocks that advanced, 54% declined.
Benchmarks slipped on Monday after the General Administration of Customs reported that China’s exports plummeted unexpectedly by 18.1% year over year in February. On the other hand, imports climbed 10.1% for the month. This resulted in a trade deficit of $22.98 billion in February.
This fall in export data was in sharp contrast to analysts’ expectation of a rise of 6.8%. The decline sparked concerns among investors of a possible slowdown in the world’s second-largest economy. The fall in February also came after exports rose 10.6% in January. Also, China had a trade surplus of $31.86 billion in January. This sharp fall in exports in February was said to be due to the weakness in economic activities in China during Lunar New Year holidays.
Separately, Japan said on Monday that its economy grew at just 0.2% in the fourth quarter. This growth in gross domestic product was less than the expected growth of 0.3%.
Major Dow component The Boeing Company’s (NYSE:BA) stock fell 1.3% after it inspected “hairline cracks” in some of its 787 Dreamliner. According to Boeing, this production setback was due to a change in the manufacturing process by supplier Mitsubishi Heavy Industries Ltd. Separately, during the weekend a 777 jet operated by Malaysia Airlines vanished on its flight to Beijing and a Tokyo-bound 787 from San Francisco was compelled to make an emergency landing in Hawaii due to complications arising in the engine.
News on the mergers and acquisitions front was reassuring for the investors. Shares of Chiquita Brands International Inc. (NYSE:CQB) jumped 10.7% to $12 after it agreed to acquire Irish fruit supply company Fyffes PLC for $559 million to create the world’s biggest banana supplier. The combined company is expected to be called ChiquitaFyffes.
Alexion Pharmaceuticals, Inc.’s (NASDAQ:ALXN) shares gained 7.1% after the biopharmaceutical company raised its 2014 adjusted earnings outlook to a range of $4.37 to $4.47 from a prior range of $3.70 to $3.80.
Six out of ten sectors of the S&P 500 ended in red. SPDR S&P Homebuilders ETF (XHB) led the decline as the sector fell 0.9%. Top holdings from the sector such as DR Horton Inc. (NYSE:DHI), NVR, Inc. (NYSE:NVR), Lennar Corp. (NYSE:LEN) Ryland Group Inc. (NYSE:RYL) and Lumber Liquidators Holdings, Inc. (NYSE:LL) plunged 2.9%, 1.4%, 2.4%, 2.6% and 1.2%, respectively.
Among the advancing stocks, Health Care Select Sector SPDR (XLV) led the gains as the sector rose 0.4%. Key stocks from the sector such as Johnson & Johnson (NYSE:JNJ), Gilead Sciences Inc. (NASDAQ:GILD), Amgen Inc. (NASDAQ:AMGN), Bristol-Myers Squibb Company (NYSE:BMY) and Biogen Idec Inc. (NASDAQ:BIIB) gained 0.1%, 0.8%, 2.6%, 0.6% and 2.8%, respectively.