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Benchmarks ended higher on Monday primarily boosted by encouraging retail sales data. Also, Citigroup’s better-than-expected quarterly earnings contributed to the bullish mood. At the same time, investors kept a close eye on recent updates from Ukraine. 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) gained 0.9% to close Monday’s trading session at 16,173.24. The Standard & Poor (S&P 500) rose 0.8% to finish at 1,830.61. The tech-laden Nasdaq Composite Index went up 0.6% to 4,022.69. The fear-gauge CBOE Volatility Index (VIX) plunged 5.4% to settle at 16.11. Total volume for the day was roughly 5.9 billion shares, lower than this month’s average of 6.9 billion. Declining stocks were outnumbered by advancing stocks on the NYSE. For 33% stocks that declined, 63% advanced.
Benchmarks ended in positive territory as investors were buoyed by encouraging economic data on retail sales. The U.S. Department of Commerce reported that seasonally adjusted sales of retail and food services rose 1.1% in March, its biggest gain since September 2012. This rise in retail sales in March was more than the consensus forecast of it rising by 0.8%.
The gain was led by the increase in demand for auto sales. Sales of motor vehicles jumped 3.1%, its biggest rise since September 2012. Excluding motor vehicles sales, retail sales increased at 0.7%. Also, increase in sales at furniture stores, building materials stores, clothing & accessories stores, nonstore retailers and food services & drinking places were cited to be the reason for the rise in retail sales. However, sales at gas-stations and electronic stores were down by 1.3% and 1.6%, respectively.
Retail stocks mostly ended in the green due to the surge in retail sales. Stocks such as apparel & footwear company Bebe Stores, Inc. (NASDAQ:BEBE), department stores company Bon-Ton Stores Inc.(NASDAQ:BONT), discount stores company Family Dollar Stores Inc.(NYSE:FDO), drugstore chain Vitamin Shoppe, Inc. (NYSE:VSI), food retail company The Fresh Market, Inc.(NASDAQ:TFM), home improvement chain Lowe's Companies Inc. (NYSE:LOW) and specialty stores company Bed Bath & Beyond Inc.(NASDAQ:BBBY) increased 15.2%, 0.4%, 1.9%, 2.4%, 3.1%, 0.7% and 1.1%, respectively.
Separately, the U.S. Department of Commerce reported that business inventories increased 0.4% in February. This was less than the consensus estimate of a rise by 0.5%.
Also, Citigroup Inc.’s (NYSE:C) encouraging quarterly earnings results had a positive impact on the broader markets. Citigroup reported impressive first-quarter 2014 results. Driven by prudent expense management, the banking giant posted first quarter earnings of $1.30 per share, outpacing the Zacks Consensus Estimate of $1.18 per share. Moreover, earnings surpassed the prior-year period earnings by a penny. Shares of the financial behemoth surged 4.4%.
This positive quarterly result from Citigroup was in contrast to last week’s dismal corporate earnings results from JPMorgan Chase & Co. (NYSE:JPM). The less-than-expected first quarter earnings result of JP Morgan had a negative impact on the markets. The banking giant came out with first quarter earnings of $1.28 per share that fell short of Zacks Consensus Estimate of $1.41 per share. This was also significantly lower from the year-ago number of $1.59 per share.
The Financial Select Sector SPDR (XLF) gained 0.8% yesterday. Key stocks from the sector such as Bank of America Corporation (NYSE:BAC), American Express Company (NYSE:AXP) U.S. Bancorp (NYSE:USB) and Morgan Stanley (NYSE:MS) rose 1.5%, 1.1%, 0.3% and 2.1% respectively.
Investors also remained focused on recent developments in Ukraine. In eastern Ukraine, pro-Russian separatists occupied several government buildings. Also, rebels in the town of Slaviansk asked Russian President Vladimir Putin to help them. Tensions between Russia and the West increased after a Russian fighter aircraft flew at low-altitude near a U.S. ship in the Black Sea.
Nine out of 10 sectors of the S&P 500 ended in the green. The Energy Select Sector SPDR (XLE) led the advance as the sector rose 1.4%. Top holdings from the sector such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Schlumberger Limited (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY) and EOG Resources, Inc. (NYSE:EOG) increased 1.2%, 1.4%, 1.4%, 1.1% and 1.5%, respectively.
The Technology sector followed the Energy sector. The Technology Select Sector SPDR (XLK) rose almost 1%. Key stocks from the sector such as Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Verizon Communications Inc. (NYSE:VZ), International Business Machines Corporation (NYSE:IBM) and AT&T, Inc. (NYSE:T) increased 0.4%, 0.4%, 0.4%, 1.3% and 0.5%, respectively.