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Stock Market News for August 20, 2014

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Encouraging housing data and upbeat earnings results ensured a positive finish for benchmarks on Tuesday. The positives offset negative sentiment arising from ongoing geopolitical tensions in Ukraine. Meanwhile, Apple hit a record split-adjusted closing high, which also contributed to the bullish mood. The S&P 500 is now 10 points away from its record high. The Nasdaq closed above 4,500 points for the second-day in a row.

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The Dow Jones Industrial Average (DJI) gained 0.5%, to close at 16,919.59. The Standard & Poor 500 (S&P 500) too advanced 0.5% to settle at 1,981.60. The tech-laden Nasdaq Composite Index closed at 4,527.51; gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) dropped 0.9% to settle at 12.21. A total of 4.5 billion shares were traded on Tuesday, less than last five day’s average of 5.2 billion. Advancers outpaced declining stocks on the NYSE. For 61% stocks that advanced, 35% declined.
The U.S. Census Bureau and the Department of Housing and Urban Development announced privately-owned housing starts surged 15.7% in July to a seasonally adjusted annual rate of 1,093,000. Construction on new U.S. homes touched the highest level in July since Nov 2013. This figure was also higher than consensus estimate of housing starts staying at a level of 970,000. Building permits also increased 8.1% from June to a seasonally adjusted annual rate of 1,052,000 in July. Building permits were expected to come in at 1,007,000.
Upbeat housing data boosted housing stocks for the second-straight day. The SPDR S&P Homebuilders (XHB) was the biggest gainer among the S&P 500 sectors. The sector gained 2%. Key stocks from the sector such as PulteGroup, Inc. (PHM - Free Report) , Toll Brothers Inc. (TOL - Free Report) , DR Horton Inc. (DHI - Free Report) , Lennar Corp. (LEN - Free Report) , Beazer Homes USA Inc. (BZH - Free Report) and KB Home (KBH - Free Report) increased 1.5%, 2.2%, 3.3%, 3.3%, 2% and 2.7%, respectively.
Separately, the US Bureau of Labor Statistics came out with consumer price data; wherein it reported Consumer Price Index for All Urban Consumers improved just 0.1% in July. The increase was in line with the consensus estimate. A drop in energy prices checked the rise in consumer prices.
Strong earnings results from The Home Depot, Inc. (HD - Free Report) and The TJX Companies, Inc. (TJX - Free Report) were welcomed by investors. Home Depot reported adjusted earnings of $1.52 per share, up 22.6% year on year and beat the Zacks Consensus Estimate of $1.44. Shares of the home improvement retailer gained 5.6%, its highest one-day percentage gain since May 2009. Home Depot advanced the most among the Dow components.
TJX Companies reported earnings of 75 cents per share in the second quarter of fiscal 2015, beating the Zacks Consensus Estimate of 73 cents. Earnings were also ahead of the year-ago results by 14%. Shares of the company surged 8.7%.
Meanwhile, shares of Apple Inc. (AAPL - Free Report) gained 1.4% to settle at $100.53. This was the first time the stock touched the $100 mark since the 7-for-1 stock split in June. This was the highest spilt-adjusted closing high for Apple. The tech-bellwether was the biggest percentage gainer among both the S&P 500 and Nasdaq components.
The Utilities Select Sector SPDR (XLU) advanced 1.3%, the second highest among the S&P 500 sectors. Key utilities stocks from the sector such as such as Duke Energy Corporation (DUK - Free Report) , NextEra Energy, Inc. (NEE - Free Report) and Southern Company (SO - Free Report) increased 1.1%, 1.2% and 0.9%, respectively. Overall, all the 10 sectors of the S&P 500 ended in the green.

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