Major indices finished in the green following encouraging
mergers & acquisitions news. The Dow Jones is just 0.9% short
of its all-time high which was achieved in October 2007.
President Barack Obama addressed the nation on Tuesday regarding
the "spending cuts" which would be implemented from March. Among
the top ten S&P 500 industry groups, energy stocks were the
biggest gainer while the materials sector was the only loser.
The Dow Jones Industrial Average (DJI) increased 0.4% to close
the day at 14,035.67. The S&P 500 increased 0.7% to finish
yesterday's trading session at 1,530.94. The tech-laden Nasdaq
Composite Index gained 0.7% to end at 3,213.59. The fear-gauge
CBOE Volatility Index (VIX) decreased 1.2% to settle at 12.31.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.9 billion shares, below
the daily average of 6.45 billion shares in 2012. Advancing
stocks outnumbered the declining stocks. For the 66% that
advanced, 31% declined.
Benchmarks finished yesterday's trading session on a positive
note due to optimism created by developments on the mergers &
acquisitions front. According to the Wall Street Journal, Office
Depot Inc (NYSE:
) and OfficeMax incorporated (NYSE:
) entered into negotiations for a merger. Shares of Office Depot
increased 9.4%, while OfficeMax surged almost 21%. This
development comes after Berkshire Hathaway Inc. (NYSE:BRK.A) and
a partner decided to buy H.J. Heinz Company (NYSE:
) last week.
On Tuesday, President Barack Obama gave a speech on reducing
government spending. The President said that if spending cuts of
$1.2 trillion are allowed then it would directly affect
investments in energy and medical research, military spending and
increase unemployment significantly. According to his State of
the Union speech, he intends to bring about investments and
increase employment in the country, but a "meat cleaver" approach
to these issues could just do the opposite.
The President added if lawmakers are unable to decide by next
Friday, "At minimum, Congress should pass a smaller package of
spending cuts and tax reforms ... to give them time to work
together on a plan that finishes the job of deficit reduction in
a sensible way."
On the earnings front, shares of Express Scripts Holding
) surged 2.5%. Profits of the company surged 74% year over year;
beating the Street's expectations. The company guided adjusted
earnings per share for fiscal 2013 in the range of $4.20 and
$4.30. According to Thomson Reuter's data, 391 companies in
S&P 500 have reported their results, among which 70.1% have
topped the Street's estimates.
According to the Centre of European Economic Research (ZEW),
the ZEW institute's index increased to 48.2 in February from
previous month's 31.5. The index beat consensus expectations of
36 points. The German economy contracted by 0.6% in the fourth
quarter, increasing fears of further recession. However,
economists believe the contraction was just a brief phase and
that the economy will bounce back quickly.
The energy sector emerged as the biggest gainer among the
S&P 500 industry groups. The Energy Select Sector SPDR (XLE)
gained 1.2%. Stocks such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Marathon Oil Corporation (NYSE:
), Suncor Energy Inc. (NYSE:
) and Hess Corp. (NYSE:
) gained 1.1%, 0.8%, 3.0%, 0.6% and 1.2%, respectively.
The materials sector was the only loser among the S&P 500
industry groups and the Materials Select Sector SPDR (XLB) lost
0.4%. Stocks such as Monsanto Company (NYSE:
), Ceres Inc (NASDAQ:
), FMC Corporation (NYSE:
) and Celanese Corporation (NYSE:
) declined 1.6%, 1.4%, 0.3% and 0.8%, respectively.
BERKSHIRE HTH-A (BRK.A): Free Stock Analysis
CELANESE CP-A (CE): Free Stock Analysis
CERES INC (CERE): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis
EXPRESS SCRIPTS (ESRX): Free Stock Analysis
FMC CORP (FMC): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
HEINZ (HJ) CO (HNZ): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
MARATHON OIL CP (MRO): Free Stock Analysis
OFFICE DEPOT (ODP): Free Stock Analysis
OFFICEMAX INC (OMX): Free Stock Analysis
SUNCOR ENERGY (SU): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
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