Markets ended in the green as Russian president's comments eased
concerns related to geopolitical tensions. This, along with
positive earnings results, offset jitters over downbeat European
growth numbers. Moreover, dismal initial claims data turned out to
be positive for the market as it eased sooner-than-expected rate
hike fears. Trading volume was very low, making it the
second-lowest full trading session of the year.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) rose about 0.4% to close at
16,713.58. The Standard & Poor 500 (S&P 500) also increased
0.4% to close at 1,955.18. The tech-laden Nasdaq Composite Index
closed at 4,453; rising just over 0.4%. The fear-gauge CBOE
Volatility Index (VIX) declined 3.7% to settle at 12.90. A total of
4.7 billion shares were traded on Thursday, lower than the five-day
average of 5.4 billion. Advancers outpaced declining stocks on the
NYSE. For 65% stocks that advanced, 31% declined.
On Thursday, Russian president Vladimir Putin said that Russia will
try its best to stop the conflicts in Ukraine. He also said that
there is a need for 'consolidation and mobilization', but not at
the expense of confrontation with other countries. The comments
helped ease concerns about the Russia-Ukraine crisis.
Meanwhile though, it was also reported that Russian trucks carrying
humanitarian aid for Ukraine were standing near the Ukraine
border. Earlier, the Ukraine government had announced that they
would not allow the Russian trucks to cross their border.
In Gaza, the Israel and the Palestinians agreed to extend the
ceasefire settlement by another five days. Before Thursday, they
were maintaining a 72-hour ceasefire agreement proposed by the
Egyptian government. Meanwhile, the U.S. President Barack Obama
announced that the U.S. will continue with their airstrikes over
rebels in ISIS. He also mentioned that the situation in Mount
Srinjar improved impressively.
Separately, GDP report from the Eurozone was dismal and that
affected the US markets negatively in the initial hours.
The European Union's statistics office reported that second
quarter GDP growth was flat in Europe. It also missed the markets'
expectations. Recession in Italy and contraction of German economy
were the main reasons behind the stagnant GDP growth.
However, the dismal GDP data had little effect by the end of the
day on US markets. Economic data was also dismal in US, as initial
claims jumped more than expected for the week ending Aug 9.
According to Labor Department, jobless claims increased 21,000 to
311,000 in the previous week. The consensus estimate had forecasted
intial claims to be 295,000. Nonetheless, investors grew hopeful
that dismal data will deter the Fed from raising rates earlier than
Coming to the company news, Shares of Berkshire Hathaway Inc. (
) crossed the $200,000 mark for the first time since its debut. The
shares gained 1.6% to finish at $202,850. On the other hand, share
of Cisco Systems, Inc. (
) dropped 2.6% after announcing that it will curtail 6,000 jobs.
Wal-Mart Stores Inc. (
) reported second quarter profits and net sales of $4.1 billion and
$119.3 billion, respectively. The earnings and the net sales were
up 0.6% and 2.8% year over year. These were also in line with
expectations. However, the retailer lowered current year earnings
per share guidance from $5.10-$5.45 to $4.90-$5.15. Shares of
Wal-Mart rose 0.5%.
Shares of Kohl's Corp. (
) gained 3.3% after posting second-quarter fiscal
2014 earnings of $1.13 per share, beating the Zacks
Consensus Estimate of $1.07 by 5.6% and prior-year quarter earnings
by 9%. Perrigo Company's (
) shares jumped 7.3% after reporting robust fourth quarter results.
Fourth-quarter fiscal 2014 (ended Jun 28, 2014) earnings of $1.74
per share beat the Zacks Consensus Estimate of $1.55. Fourth
quarter earnings were up 11% year on year.
The Health Care Select Sector SPDR ETF (XLV) was the biggest gainer
among the S&P 500 sectors. The sector gained 1.2%. Key
healthcare stocks from the sector such as Pfizer Inc. (
), Alexion Pharmaceuticals, Inc. (
), Regeneron Pharmaceuticals, Inc. (
) and Merck & Co. Inc. (
) rose 1.8%, 3%, 1.4% and 1.6%, respectively. 9 out of 10 S&P
500 sectors gained on Thursday.
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