An unexpected improvement in Gross Domestic Product (GDP)
along with positive initial claims data drove benchmarks into
positive territory. However, investors remained cautious over a
possible attack on Syria. On the international front,
unemployment rate in Germany remained at a low level while
inflation for the month of August declined. Of the top ten
S&P 500 industry groups, the technology sector gained the
most. Energy stocks suffered maximum losses.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.1% to close the
day at 14,840. 87. The S&P 500 added 0.2% to finish
yesterday's trading session at 1,638.17. The tech-laden Nasdaq
Composite Index increased 0.8% to end at 3,620.30. The fear-gauge
CBOE Volatility Index (VIX) gained 1.9% to settle at 16.81.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 4.74 billion shares, well
below 2013's average of 6.31 billion shares. Advancing stocks
outnumbered the decliners. For 61% shares that advanced, 36%
Benchmarks bolstered gains on the back of an improving economy.
However, towards the end of yesterday's trading session, fears of
a possible military strike on Syria gripped investors. Real GDP
for the second quarter came in at 2.5%, ahead of previous
quarter's figure of 1.1%. This was also well ahead of the
consensus estimate of 2.1%. Significant improvement was witnessed
in several pockets of the economy. Real personal consumption
expenditure, real nonresidential fixed investment and real
exports of goods and services witnessed increases of 1.8%, 4.4%
and 8.6%, respectively.
A bunch of economic reports were also released yesterday which
boosted investor sentiment. The number of Americans filing for
unemployment benefits has decreased week over week. Initial
claims numbers came in at 331,000, lower than previous week's
figure of 337,000. The 4-week moving average basis came in at
331,250, up 750 from previous week's number of 330,500.
The Bloomberg Consumer Confidence Index dropped for the third
week in a row. The consumer confidence index came in at -31.7
compared to -28.8, recorded in the previous week. The index has
dropped nearly 8.2 points after peaking to a five-year high.
Increase in mortgage rates and tensions brewing up in Syria are
the factors responsible for low consumer confidence. Fears of an
imminent attack have raised concerns over a possible increase in
fuel costs. The barometer which measures the state of the
economy has dropped 2.5% points to -55.1. The gauge which
indicates the buying climate decreased to -38.7 from previously
week's figure of -36.7.
On the international front, Germany continues to show signs of an
economic recovery. Germany's inflation for the month of August
came in at 1.5%. This is well below previous month's figure of
1.9%. Germany's inflation is marginally below the Euro Zone's
figure of 1.6%. Employment numbers of the country also improved
month over month, last witnessed during May. According to the
German Labor Office data, the number of jobless individuals for
the month of August came in at 2.943 million, an increase of
7,000. For the fourth consecutive month, less than 3 million
people remained unemployed in Germany
Technology stocks gained the most during yesterday's trading
session. The Technology SPDR (XLK) gained 0.6%. Stocks such as
Apple Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
), Google Inc (NASDAQ:
), International Business Machines Corp. (NYSE:
) and Oracle Corporation (NYSE:
) gained 0.2%, 1.6%, 0.8%, 0.3% and 0.1%, respectively.
Energy stocks suffered the most. Energy Select Sector SPDR (XLE)
lost nearly 1%. Stocks such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Hess Corp. (NYSE:
), ConocoPhillips (NYSE:
) and Marathon Petroleum Corp (NYSE:
) lost 1.8%, 1.2%, 0.9%, 0.9% and 0.6%, respectively.