Benchmarks moved up on Thursday as investors received a boost
after a reading on manufacturing activity hit a four year high.
Also, Facebook's deal to buy WhatsApp and Tesla Motors' strong
results somewhat added to the positive sentiment. The gains on
Thursday came despite weak data from China, Japan and Euro zone
amidst a report of contraction in Philadelphia Fed's gauge of
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.6% to close
Thursday's trading session at 16133.23. The Standard & Poor
500 (S&P 500) too moved up 0.6% to finish at 1839.78. The
tech-laden Nasdaq Composite Index rose 0.7% to move up to
4267.55. The fear-gauge CBOE Volatility Index (VIX) dropped
4.6% to settle at 14.79. Total volume on the New York Stock
Exchange was 3.4 billion shares. Advancers outpaced the decliners
on the NYSE. For 63% stocks that gained, 33% stocks closed lower
on the NYSE.
Dismal data from China, Japan and Euro zone weighed on the
benchmarks for a while in the morning. China's HSBC Manufacturing
PMI dropped from 49.5 to 48.3; Japan reported a
larger-than-expected trade deficit and the Euro zone
Manufacturing PMI dropped to 52.7 in February from 52.9 in
However, the markets overcame these
bottlenecks as they gained strength
on release of better-than-expected reading of
Markit's preliminary US Manufacturing Purchasing Managers
Index. The preliminary reading showed Markit US flash
purchasing managers index climbing to 56.7 in February from 53.7
in January. This was the highest level in almost four years.
However, the Philadelphia Federal Reserve's manufacturing index
plummeted to negative 6.3 in February from 9.4 in January. It
also stated that demand for manufactured goods as measured by
current new orders index decreased and current shipments also
plunged. Incidentally this was the first negative reading of the
index in nine months.
Separately, the U.S. Department of Labor reported that seasonally
adjusted initial claims dropped 3000 to 336,000 in the week
ending February 15. The drop was smaller than consensus
expectations of initial claims declining to 330,000.
The US Bureau of Labor Statistics came out with consumer price
data; wherein it reported Consumer Price Index for All Urban
Consumers (CPI-U) had improved marginally, by 0.1%, in January.
The increase was in line with the consensus estimate.
News on the merger and acquisition front also helped the bullish
rally. Social networking giant Facebook Inc. (NASDAQ:
) entered into a landmark deal when it expressed its interest to
buy mobile-messaging company WhatsApp for a whopping $19 billion
in cash and stock. Facebook's shares improved 2.3% to close at
The Technology Select Sector SPDR (XLK) gained 0.3%. Key
technology stocks such as Microsoft Corp. (NASDAQ:
), AT&T Inc. (NYSE:
), Oracle Corp. (NYSE:
) and International Business Machines Corporation (NYSE:
) gained 0.6%, 1%, 1.1% and 0.7%, respectively.
Earnings news was also reassuring to investors. Tesla Motors
) stock jumped 8.4% to $209.97 after hitting an intraday record
of $215.21. The electric car maker reported better-than-expected
fourth quarter profit after the closing bell on Wednesday. The
company is optimistic about its luxury car segment and believes
that sales will improve by 55% this year.
Coming back to the sectors, all the ten sectors of the S&P
500 settled in the green with materials increasing the most. The
Materials Select Sector SPDR (XLB) led the race as it gained
1.1%. Stocks from the sector such as E. I. du Pont de Nemours and
), Monsanto Co. (NYSE:
), Dow Chemical Company (NYSE:
) and LyondellBasell Industries N. V. (NYSE:
) surged 1.7%, 1.4%, 1.5% and 1.8%, respectively.
DU PONT (EI) DE (DD): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis
INTL BUS MACH (IBM): Free Stock Analysis
LYONDELLBASEL-A (LYB): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis
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