Benchmarks finished in the green in the wake of better-than-expected earnings and encouraging domestic & international economic data. The S&P 500 touched a five-year high while the Nasdaq closed at a 12- year high following optimism among investors. Trade deficit declined in December, thereby pushing up stocks. Among the 10 industry groups within the S&P 500, energy stocks emerged as the biggest gainers while consumer staples was the only losing sector.
The Dow Jones Industrial Average (DJI) rose 0.4% to close the day at 13,992.97. The S&P 500 increased 0.6% to finish yesterday’s trading session at 1,517.93. The tech-laden Nasdaq Composite Index gained 0.9% to end at 3,193.87. The fear-gauge CBOE Volatility Index (VIX) decreased 3.6% to settle at 13.02. Consolidated volumes on the New York Stock Exchange came in at 3.2 billion. Advancing stocks outnumbered the decliners on the NYSE. For 66% stocks that advanced, 30% declined.
On the international front, China and Germany reported some positive economic data. China witnessed a surge in imports, by 28.8%, while exports of the country increased by 25%, beating the Street’s expectations. At 7.8%, China’s growth rate in 2012 was the slowest since 2010. Following a series of economic stimulus packages and growing international demand, the country is slowly on route for growth.
Europe’s largest economy, Germany posted encouraging numbers on the trade surplus front. The exports of the country grew by 3.4% year over year while imports inched up 0.7% for 2012. This is the highest growth in terms of exports and imports in the past five years and second highest in more than 60 years.
On the domestic front, according to the U.S. Department of Commerce, trade deficit for December 2012 contracted by $13.2 billion on a year over year basis. Exports of the country increased 4.9% while imports fell by 2%. On a month over month basis, the trade deficit for the month of December came in at $38.5 billion while the trade deficit for the month of November was $48.6 billion.
Shares of Linkedin Corporation (NYSE:LNKD) surged 21.3% after earnings soared 60% year over year. The company posted profits for seventh quarter in a row. About 62% of the company’s revenue came from the domestic market while the remaining came from international markets. The company raised its guidance for revenue above the Street’s expectations for first-quarter 2013. AOL, Inc. (NYSE:AOL), reported a rise in revenue after a span of eight years. Shares of the company rose 7.4% after earnings beat the Street’s estimates. Profits increased on account of high worldwide advertising sales.
Semiconductor maker Microchip Technology Inc. (NASDAQ:MCHP) reported better-than-expected profits. Shares of the company increased 7.2% on account of robust bookings. Shares of Moody's Corporation (NYSE:MCO) plunged 7.7% despite the fact that earnings beat estimates. Earnings of the company increased 66%. Shares of the company declined on fears that Moody’s will be the next company to be sued by the Justice Department after it sued Standard & Poor for its illicit involvement in grading before the financial crisis began.
Among the top 10 S&P 500 groups, the major gainer was the energy sector. The Energy SPDR (XLE) increased 1%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Schlumberger Limited. (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY) and Anadarko Petroleum Corporation (NYSE:APC) increased 0.4%, 0.5%, 1.4%, 0.2% and 0.4%, respectively.
The only loser among the S&P 500 industry groups was the Consumer Staples sector. The Consumer Staples SPDR (XLP) decreased about 0.1%. Stocks such as The Procter & Gamble Company (NYSE:PG), The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), Colgate-Palmolive Company (NYSE:CL) and H.J. Heinz Company (NYSE:HNZ) declined 0.5%, 0.4%, 0.3%, 1.5% and 0.2%, respectively.