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Stock Market News for May 02, 2014

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Benchmarks finished Thursday’s choppy run mostly lower as investors took a cautious approach ahead of Friday’s nonfarm payroll report. While the day’s mixed economic reports had some negative impact on the S&P 500 and the Dow, the Nasdaq ended in positive territory due to gains in Internet stocks.

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) dropped 0.1% to close Thursday’s trading session at 16,558.87. The Standard & Poor 500 (S&P 500) dropped a meager 0.01% to finish at 1,883.68. The tech-laden Nasdaq Composite Index went up 0.3% to 4,127.45. The fear-gauge CBOE Volatility Index (VIX) dropped 1.2% to settle at 13.25. Total volume for the day was roughly 6.4 billion shares, lower than this month’s average of 6.7 billion. Advancers outpaced declining stocks on the NYSE. For 55% stocks that advanced, 42% declined.
The S&P 500 and the Dow ended their three day winning streak yesterday. Markets witnessed mixed economic data on Thursday. While data on consumer spending and ISM reports were better-than-expected, claims for unemployment benefits and construction spending report were dismal.
According to the Bureau of Economic Analysis, personal income increased 0.5% in March, more than the consensus estimate of a 0.4% gain. This rise in personal income came after it had increased 0.4% in December. This was the strongest gain in income since last August. Also, personal consumption expenditure increased 0.9% in April, more than the consensus estimate of 0.6%. It was also higher than the 0.5% growth in March’s personal consumption expenditure. Consumer spending increased at the fastest pace since August 2009.
The Institute for Supply management reported its April PMI had increased 1.2 percentage points from March’s adjusted reading of 53.7%.  The rise to 54.9% in April was more than the consensus estimate of an increase to 54.2%. The ISM Manufacturing Index reached the highest level since December 2013.

However, construction spending in March missed forecasts. The US Census Bureau of the Department of Commerce reported a 0.2% rise in construction spending to $942.5 billion in March from revised February estimate of $940.8 billion. However, this increase in the payout by builders on residential and nonresidential structures was less than the consensus estimate of an increase by 0.5%.
Separately, the U.S Department of Labor reported that seasonally adjusted initial claims increased 14,000 to 344,000 in the week ending April 26. This rise in application for unemployment benefits reached the highest level since the end of February. The rise was in sharp contrast to the consensus estimate of initial claims decreasing to 318,000.
Investors remained focused on the U.S. Bureau of Labor Statistics’ upcoming report on nonfarm payroll data. The data is scheduled for release on Friday. The total non-farm payroll accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States.
The tech-heavy Nasdaq closed in the green boosted primarily by gains in Internet stocks. Stocks such as Inc. (NASDAQ:AMZN), Netflix, Inc. (NASDAQ:NFLX), TripAdvisor Inc. (NASDAQ:TRIP) and The Priceline Group Inc. (NASDAQ:PCLN) increased 1.2%, 4.5%, 3.4% and 1.9%, respectively.
Internet stocks from the Technology sector such as Facebook, Inc. (NASDAQ:FB), Google Inc. (NASDAQ:GOOG) and Yahoo! Inc. (NASDAQ:YHOO) increased 2.3%, 0.9% and 1.6%, respectively. Also, shares of Yelp, Inc. (NYSE:YELP) surged 9.8% after the company reported encouraging result.
After the closing bell on Wednesday, Yelp posted a loss of 4 cents per share in the first quarter of 2014, narrower than the Zacks Consensus Estimate of a loss of 6 cents per share. The company’s revenues surged 65.6% from the year-ago quarter to $76.4 million, beating the Zacks Consensus Estimate of $75.0 million.
Six out of 10 sectors of the S&P 500 ended in the green. The SPDR S&P Homebuilders ETF (XHB) led the advance among the S&P 500 sectors. The sector rose almost 1.0%. Key housing stocks such as PulteGroup, Inc. (NYSE:PHM), Lennar Corp. (NYSE:LEN), DR Horton Inc. (NYSE:DHI) and Beazer Homes USA Inc. (NYSE:BZH) increased 0.8%, 2.0%, 2.5% and 4.4%, respectively.
On the other hand, the Materials Select Sector SPDR (XLB) led the decline among the S&P 500 sectors. The sector decreased 0.6%. Top holdings from the Materials sector such as E. I. du Pont de Nemours and Company (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Monsanto Company (NYSE:MON), LyondellBasell Industries NV (NYSE:LYB) and Praxair Inc. (NYSE:PX) dropped 0.8%, 2.4%, 0.4%, 0.1% and 0.2%, respectively.

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