Investors focused on some encouraging earnings results and
better-than-expected consumer sentiment gauge numbers to help
drive benchmarks into the positive zone on Friday. Gains on
Friday came despite a surprise drop in industrial production
data. Eventually, Nasdaq soared to its best level since July 2000
and benchmarks had their best weekly run this year.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) jumped a tad short of 127
points, or 0.8%, to close Friday's trading session at 16,154.39.
The Standard & Poor 500 (S&P 500) moved up 0.5% to end at
1,838.63. The tech-laden Nasdaq Composite edged up a modest 0.08%
to 4,244.03. The fear-gauge CBOE Volatility Index (VIX) dropped
4% to settle at 13.57. Roughly 5.1 billion shares changed hands
on US exchanges on Friday. Advancers had a better run than the
decliners on the New York Stock Exchange. For 2 stocks that
gained, 1 stock closed lower.
Despite modest gains from the Nasdaq, the tech-heavy index has
now posted gained for seven-straight sessions. This helped Nasdaq
to hit its highest level since July 2000. Friday's finish in the
positive territory also helped benchmarks to register a second
consecutive week of gains. Both Dow and S&P 500 were up 2.3%
for the week. Nasdaq closed the week with gains of 2.9%.
Much of the weekly gains came on the back of optimism offered by
Federal Reserve Chairwoman Janet Yellen. Her pledge to keep
interest rates low led benchmarks sharply higher last Tuesday. In
her first speech before Congress after taking up the top position
at the central bank, Yellen also supported the tapering process.
Yellen had said: "Let me emphasize that I expect a great deal of
continuity in the Federal Open Market Committee's approach to
Coming back to Friday's events, the Board of Governors of the
Federal Reserve System reported a surprise drop in industrial
production. The report stated industrial production had declined
0.3% in January. This contradicted expectations of a 0.2%
increase, following December's gains of 0.3%. Moreover,
manufacturing output dropped 0.8% in January, which was said to
be "partly because of the severe weather that curtailed
production in some regions of the country".
However, investors chose to overlook the weak industrial
production data and focused on somewhat positive consumer data
and encouraging earnings numbers. The University of Michigan and
Thomson Reuters' preliminary reading of consumer sentiment showed
no change in February. The gauge was stable at 81.2 in February,
better than consensus forecast of it dropping to 80.5.
Consumer sector ended in the green on Friday with Consumer
Discrete Select Sector SPDR (XLY) gaining 0.6%. Among key stocks,
The Walt Disney Company (NYSE:
), McDonald's Corp. (NYSE:
), Twenty-First Century Fox, Inc. (NASDAQ:
), priceline.com Incorporated (NASDAQ:
) and Nike, Inc. (NYSE:
) gained 1.7%, 0.3%, 1.1%, 0.3% and 0.3%, respectively.
Consumer Staples Select Sector SPDR (XLP) was also up 0.6% and
stocks such as The Procter & Gamble Company (NYSE:
), The Coca-Cola Company (NYSE:
), Philip Morris International, Inc. (NYSE:
) and Wal-Mart Stores Inc. (NYSE:
) increased 2.1%, 0.7%, 1.5% and 0.6%, respectively.
Markets also received certain strong corporate results. Among
others, Campbell Soup Company (NYSE:
) reported second-quarter fiscal 2014 adjusted earnings from
continuing operations of 76 cents per share, beating the Zacks
Consensus Estimate of 73 cents per share and improving 19% year
on year. Reported earnings of 74 cents jumped 37% year on year.
Shares of Campbell Soup gained almost 5%.
Cliffs Natural Resources Inc.'s (CLF) shares jumped 5.8% after it
also reported strong fourth quarter numbers. Adjusted earnings
from continuing operations (barring special items) of $1.22 per
share in fourth quarter came in nearly twice as much as the 63
cents per share reported in the year-ago period. It also outpaced
the Zacks Consensus Estimate of 77 cents.
Among the S&P industry groups, energy sector led the gains
with Energy Select Sector SPDR (XLE) gaining 1.31%. Stocks from
the sector such as Murphy Oil Corp. (NYSE:
), Occidental Petroleum Corp. (NYSE:
), Exxon Mobil Corp. (NYSE:
) and Western Refining, Inc. (NYSE:
) surged 5.0%, 3.8%, 2.9% and 1.5% respectively.