Better-than-expected results from major companies improved
investor sentiment, helping the benchmarks finish in the green.
Last week, the Dow Jones and the S&P 500 witnessed their
worst drop since November due to discouraging international and
national reports. Among the top ten S&P 500 industry groups,
consumer staples stocks were the biggest gainers, while energy
stocks were the only losers.
The Dow Jones Industrial Average (DJI) increased 0.1% to close
the day at 14,547.51. The S&P 500 gained 0.9% to finish
Friday's trading session at 1,555.25. The tech-laden Nasdaq
Composite Index rose 1.3% to end at 3,206.06. The fear-gauge CBOE
Volatility Index (VIX) lost 14.8% to settle at 14.97.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.4 billion shares, below
2012's average of 6.48 billion shares. Advancing stocks
outnumbered the decliners. For the 71% that advanced, 26%
The major indices witnessed their worst week since November
after dismal growth reports from China triggered a massive
sell-off in commodities, ultimately leading to a sell-off in
equity. The world's second largest economy reported a growth rate
of 7.7% in comparison to the expected growth rate of 7.9%. The
fear from Boston bombings also spilled over to the stock markets.
In addition to these discouraging developments, the manufacturing
activity and an increase in the initial claims indicated
disturbance in the economic weather.
Last week, the Dow, the S&P 500 and the Nasdaq lost 2.1%,
2.1% and 2.7%, respectively. The VIX, known as the fear index,
increased 24% last week to settle at 14.97. This increase was the
highest weekly increase since December. The VIX, which usually
moves opposite to the S&P 500, reached its lowest level in
almost six years last month.
Meanwhile, the President of the Federal Reserve of St. Louis,
James Bullard, expressed concerns about the inflation rate.
Prices of consumer goods have only increased 1.3% year over year.
Usually the Fed tries to maintain the inflation rate at 2%, as it
reflects economic health, rise in wages and a growing employment
"I'm getting concerned about that, and I think that gives the
FOMC some room to maneuver on its monetary policy." he said.
On the earnings front, shares of the world's largest
restaurant chain, McDonald's Corporation (NYSE:
) decreased 1.9% after it reported weaker-than-expected results.
The company reported lower-than-expected first-quarter revenues
following a drop in U.S. same-store sales and weak demand in
Meanwhile, shares of the eight largest U.S. bank by assets,
Capital One Financial Corp. (NYSE:
) increased 6.4% after it reported better-than-expected results.
The company primarily booked profits due to an improvement in
lending margins. According to the Bloomberg data, out of the 103
companies that have reported earnings, 72% have beaten the
Street's estimates out which, 51% has trailed revenues.
Of the top ten S&P 500 industry groups, consumer staples
stocks emerged as the biggest gainer. The Consumer Staples Select
Sect. SPDR (XLP) gained 1.6%. Stocks such as Procter & Gamble
), Coca-Cola Company (NYSE:
), Philip Morris International Inc. (NYSE:
), Wal-Mart Stores, Inc. (NYSE:
) and CVS Caremark Corporation (NYSE:
) gained 2.0%, 1.3%, 0.3%, 1.5% and 2.4%, respectively.
Of the top ten S&P 500 industry groups, energy stocks were
the only losers. The Energy Select Sector SPDR (XLE) lost almost
0.2%. Stocks such as Occidental Petroleum Corporation (NYSE:
), Marathon Oil Corporation (NYSE:
), EOG Resources Inc. (NYSE:
), Hess Corp. (NYSE:
) and Southwestern Energy Company (NYSE:
) lost 0.4%, 0.9%, 1.6%, 0.4% and 1.4%, respectively
CAPITAL ONE FIN (COF): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
EOG RES INC (EOG): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis
MARATHON OIL CP (MRO): Free Stock Analysis
OCCIDENTAL PET (OXY): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
SOUTHWESTRN ENE (SWN): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
To read this article on Zacks.com click here.