Benchmarks added modest gains on Monday as investors were hesitant to take any position ahead of the U.S. presidential elections. Thin trading action led to the Street registering one of its lightest trading days of the year. Meanwhile, the ISM manufacturing index fell during the month of October. Materials and energy sectors were the major gainer among the S&P 500 industry groups.
The Dow Jones Industrial Average (DJI) rose 0.2% to close the day at 13,112.44. The Standard & Poor 500 (S&P 500) gained 0.2% to finish yesterday’s trading session at 1,417.26. The tech-laden Nasdaq Composite Index advanced 0.6% to end at 2,999.66. The fear-gauge CBOE Volatility Index (VIX) surged 4.7% to settle at 18.42. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.16 billion shares, significantly lower than the daily average of 6.5 billion shares. Advancing stocks outpaced the decliners on the NYSE; as for 49% stocks that rose, 47% stocks moved lower.
Investors remained apprehensive ahead of the presidential elections and were hesitant to make any big moves. Benchmarks were flat initially, but added gains during the later part of the day. Both President Barack Obama and Republican challenger Mitt Romney were busy making last minute efforts before Tuesday’s elections by holding rallies in Ohio and other states. National polls hint President Barack Obama and Mitt Romney are going almost neck to neck.
According to market experts, uncertainty surrounding the results has kept the market stagnant for the past few weeks. A report from CNBC shows that stock markets have done well under Democratic Presidents and under them the Dow managed an average gain of 74% while the S&P 500 returned an average gain of 80%. Under Republican presidents, the Dow and S&P 500 managed average gains of 47% and 41%, respectively. For the Dow, this is true since 1901, while for the S&P 500 this has happened since 1928.
Demand Media Inc’s (NYSE:DMD) shares surged 6.1% after reporting better-than-expected quarterly results. The company reported record quarterly revenues and profits. According to the company, more people are visiting their websites such as eHow, Livestrong and Cracked. However, Time Warner Cable Inc’s (NYSE:TWC) quarterly results missed the Street’s estimates. The company’s shares tumbled 6.4% following the announcement of quarterly results.
Separately, the Institute for Supply Management’s (ISM) non-manufacturing index decreased to 54.2 in October from 55.1 in September. This was below consensus estimates of 55.4. The business activity index fell to 55.4 in October from 59.9 in September, while the new orders index fell to 54.8 from the September figure of 57.7. The employment index rose 3.8 points to 54.9 in October. According to the report, Agriculture, Construction and Finance & Insurance industries have reported growth while mining, while Arts and Wholesale trades reported contraction in October.
The energy sector had a good run yesterday and the Energy Select Sector SPDR (XLE) surged 0.8%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Marathon Oil Corporation (NYSE:MRO), Petroleo Brasileiro Petrobras SA (NYSE:PBR) and Statoil ASA (NYSE:ST) rose 0.4%, 0.8%, 1.9%, 1.3% and 0.2%, respectively.
Technology bellwether Apple Inc. (NASDAQ:AAPL) gained 1.4% after the company said it sold 3 million iPads since it launched the iPad mini and the fourth-generation iPad. The Technology SPDR (XLK) gained 0.6%. Stocks such as Hewlett-Packard Company (NYSE:HPQ), Dell Inc. (NASDAQ:DELL), Microsoft Corporation (NASDAQ:MSFT) and SanDisk Corporation (NASDAQ:SNDK) surged 1.8%, 2.2%, 0.4% and 2.0%, respectively.