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Benchmarks ended mostly in the red on Thursday as mixed economic data and another decline in oil prices dampened investor sentiment. However, Avago Technologies’ encouraging deal news and strong earnings results from Salesforce.com boosted technology shares. Meanwhile, small cap stocks outpaced large cap stocks, which in turn helped the Russell 2000 Index reach a record high for the eighth time this year. Though the Dow and S&P 500 ended in negative territory, the Nasdaq finished in the green.

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 nearly 0.1% to close at 18,214.42. The Standard & Poor 500 (S&P 500) declined 0.2% to 2,110.74. The tech-laden Nasdaq Composite Index closed at 4,987.89; gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) rose 0.5% to settle at 13.91. A total of about 6.4 billion shares were traded on Thursday, below month-to-date average of 6.8 billion. Decliners outpaced advancing stocks on the NYSE. For 52% stocks that declined, 45% advanced.
 
On Thursday, the U.S. Department of Labor reported that Consumer Price Index (CPI) declined 0.7% in January, witnessing its first drop since 2009. The decline was also wider than the consensus estimate of 0.6% drop. It was reported that slump in energy prices was the major reason behind the decline. The energy index decreased 9.7% mainly due to a drop of 18.7% in the gasoline index. This was also the biggest decline in energy index in last seven months. However, core CPI that excludes food and energy prices rose 0.2%, higher than the consensus estimate of 0.1% rise.
 
Meanwhile, a separate report showed that initial claims increased to 313,000 in the week ending Feb 21 from previous week’s tally of 282,000, higher than the consensus estimate of 290,000. Moreover, the 4-week moving average came in at 294,500 in the week, witnessing a rise of 11,500 from the prior week.
 
However, the U.S. Department of Commerce reported that new orders for manufactured durable goods gained 2.8% in January to $236.1 billion, outpacing the consensus estimate of 1.3% increase. This was also the biggest gain in six months. Improvement in airplanes and appliances orders boosted durable orders in January.
 
Separately, increase in crude inventories weighed on oil prices yesterday. On Wednesday, the U.S. Energy Information Administration (EIA) reported that U.S. commercial crude oil inventories rose 8.4 million barrels in the week ending Feb 20 to 434.1 million. This is highest level of inventories witnessed in last 80 years. The prices of WTI crude oil and Brent crude oil declined 5.9% and 2.6% to $48.17 per barrel and $60.05 a barrel, respectively.
 
Decline in oil prices dragged down the Energy Select Sector SPDR (XLE) by 1.9%, making it the biggest loser among the S&P 500 sectors on Thursday. Key stocks from the sector including Exxon Mobil Corporation (XOM - Free Report) , Chevron Corporation (CVX - Free Report) , Halliburton Company (HAL - Free Report) and Baker Hughes Incorporated lost 1.1%, 1.4%, 2.2% and 1.9%, respectively. Seven out of 10 S&P 500 sectors registered losses yesterday.
 
Separately, shares of Avago Technologies Limited (AVGO - Free Report) surged 14.7% after announcing it will acquire Emulex Corporation for $8 per share or about $600 million. It was reported that the deal is expected to close in the second half of this fiscal year. Emulex’s shares also jumped 24.7% following the news. Meanwhile, shares of Apple Inc. (AAPL - Free Report) rebounded from Wednesday’s losses to gain 1.3% yesterday. Gains in shares of Avago Technologies and Apple boosted the Nasdaq on Thursday.
 
On the earnings front, Salesforce.com, Inc.’s (CRM - Free Report) shares gained 11.7% after announcing fourth quarter revenues of $1.445 billion, which increased 26.1% from the year-ago quarter and also beat the Zacks Consensus Estimate of $1.440 billion. The company reported that higher demand for Salesforce ExactTarget Marketing Cloud platform, part of the Salesforce1 Customer Platform, contributed to the year-over-year revenue increase.
 
Encouraging deal news from Avago Technologies and Salesforce.com’s upbeat earnings results helped the Technology Select Sector SPDR (XLK) to gain 0.6%. The sector was the biggest gainer among the S&P 500 sectors. Key stocks from the sector including Google Inc. (GOOGL - Free Report) , Cisco Systems, Inc. (CSCO - Free Report) , Adobe Systems Incorporated (ADBE - Free Report) and Facebook, Inc. (FB - Free Report) gained 2.2%, 1.4%, 1.1% and 1.1%, respectively.
 
Moreover, shares of Kohl's Corp. (KSS) rose 1.1% after announcing fourth quarter earnings of $1.83 per share, beating the Zacks Consensus Estimate of $1.80. Also, net sales of $6.337 billion beat the Zacks Consensus Estimate of $6.302 billion. For the fiscal year 2014, Kohl’s reported earnings of $4.24 per share, beating the Zacks Consensus Estimate of $4.22. Earnings also improved 5% from the prior fiscal year.


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