Investor apprehensions about Friday's non-farm payroll data
dragged benchmarks lower on Thursday. Benchmarks ended in the red
for the second consecutive day. Meanwhile, initial claims showed
weak signs after logging encouraging numbers in the previous two
weeks. Personal income increased in December but failed to impress
the markets. Materials were the major loser among the S&P 500
industry groups, while the biggest gainer was the utilities
sector.DU PONT (EI) DE (DD): Free Stock Analysis
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The Dow Jones Industrial Average (DJI) lost 0.4% to close the day
at 13,860.58. The S&P 500 decreased 0.3% to finish yesterday's
trading session at 1,498.11. The tech-laden Nasdaq Composite Index
decreased marginally by 0.18 point to end at 3,142.13. The
fear-gauge CBOE Volatility Index (VIX) decreased 0.3% to settle at
14.28. Consolidated volumes on the New York Stock Exchange,
American Stock Exchange and Nasdaq were roughly 7.1 billion shares,
higher than the daily average of 6.45 billion shares in 2012.
Advancing stocks were marginally higher than decliners on the NYSE.
For 49% stocks that advanced, 47% declined.
Markets enjoyed a decent rally in the month of January following a
solution to the Fiscal Cliff dilemma and encouraging numbers from
the housing sector. Better-than-expected earnings for the fourth
quarter coupled with a brighter employment scenario boosted the
Street's sentiments. On the international front, data showed that
the Chinese manufacturing sector has improved the most in the past
two years. The blue-chip index surged 5.8%, S&P 500 increased
5.1% and Nasdaq rose 4.1% over the month. The Dow registered its
largest increase in January since 1994.
According to the U.S. Department of Labor, the number of Americans
filing for unemployment benefits increased in the previous week
after declining to its lowest level in five years in prior week.
Seasonally adjusted initial claims rose by 38,000 to 368,000, from
the prior week's unrevised figure of 330,000. This was above the
consensus estimate of 343,000. Investors are wary about non-farm
payroll data, which is due to release on Friday, following the
sharp rise in initial claims.
The U.S. Department of Commerce reported encouraging personal
income data, which is at its highest level in more than eight
years. Personal income increased 2.6% while disposable personal
income rose 2.7% for December. Personal consumption expenditure
also increased by 0.2% following the increase in personal
Earnings of United Parcel Service, Inc. (NYSE: UPS ) failed to meet
the Street's estimates following which the company's shares
decreased nearly 2.4%. The profits of the company were adversely
affected due to low demand in shipping globally. Shares of the Dow
Chemical Company (NYSE: DOW ) plunged 7%, after
earnings of the company missed analysts' expectations. Earnings of
the company decreased following lower sales in Europe.
Meanwhile, the Chicago Purchasing Managers released some
encouraging news. According to the Chicago PMI, the business
barometer increased to 55.6 in January from 50 in December. This
increased was boosted by improvements in employment, production and
new orders. This index has climbed to its highest level since April
Utilities emerged as the biggest gainer for second consecutive day
among the S&P 500 industry groups. The Utilities SPDR (XLU)
increased 0.3%. Stocks such as Public Service Enterprise Group Inc.
(NYSE: PEG ), NRG
Energy Inc (NYSE: NRG ), Exelon
Corporation (NYSE: EXC ), Duke Energy Corp
(NYSE: DUK ) and
Wisconsin Energy Corporation (NYSE: WEC ) increased 1.0%,
0.6%, 0.6%, 0.4% and 0.7%, respectively.
The materials sector was the biggest loser among the S&P 500
industry groups. The Materials Select Sector SPDR (XLB) lost 1.0%.
Stocks such as E I Du Pont De Nemours And Co. (NYSE: DD ), Monsanto Company
(NYSE: MON ), FMC
Corporation (NYSE: FMC ) and Eastman
Chemical Company (NYSE: EMN ) decreased 0.4%,
1.3%, 0.1% and 0.5%, respectively.