The Dow Jones and S&P 500 finished in the green on Tuesday
following better-than-expected retail sales numbers which negated
concerns about raising the debt ceiling. But shares of technology
bellwether Apple once again pushed the Nasdaq lower. Meanwhile,
the New York Empire State Index declined in January for the sixth
consecutive month. The consumer discretionary sector enjoyed a
decent gain following positive retail sales data and was the
major gainer among the S&P 500 industry groups whereas
technology once gain emerged as the biggest loser.
The Dow Jones Industrial Average (DJI) gained 0.2% to close the
day at 13,534.89. The Standard & Poor 500 (S&P 500) added
0.1% to finish yesterday's trading session at 1,472.34. The
tech-laden Nasdaq Composite Index dropped 0.2% to end at
3,110.78.The fear-gauge CBOE Volatility Index (VIX) gained 0.2%
to settle at 13.55. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 5.8
billion shares, significantly lower than 2012's daily average of
6.45 billion shares. Advancing stocks outpaced decliners on the
NYSE; as for 55% stocks that rose, 41% moved lower.
Investor concerns about the debt ceiling and earnings pushed
benchmarks into negative territory during the morning trading
session. But an encouraging report from the retail sector pushed
the S&P 500 and the blue-chip index higher in the late
afternoon. Apple Inc. (NASDAQ:
) continued to decline following Monday's reports that demand for
the company's products has declined and dragged the Nasdaq lower
for the second consecutive day.
Meanwhile, the U.S. Census Bureau revealed that retail sales
surged in December. According to the report, advance monthly
sales for retail and food services increased 0.5% to $415.7
billion in December from the previous month. This was above
consensus estimates of an increase of 0.2%. Retail trade sales
added 0.4% from the previous month and 4.4% from the comparable
period last year. Better-than-expected retail sales was primarily
driven by gains in sales of auto, furniture and clothing.
Following the report, the consumer discretionary sector had a
good run and the Consumer Discretionary SPDR (XLY) gained 0.7%.
Stocks such as J.C. Penney Company, Inc. (NYSE:
), American Eagle Outfitters (NYSE:
), Dillard's, Inc. (NYSE:
), Dollar Tree, Inc. (NASDAQ:
) and The Gap Inc. (NYSE:
) jumped 3.4%, 4.8%, 2.8%, 1.5% and 3.4%, respectively.
Treasury Secretary Timothy Geithner informed Congress leaders
that the U.S. government will exhaust its borrowing limits
between mid- February and the beginning of the March. He also
said if Congress fails to raise the debt ceiling by the beginning
of March then this could "impose severe economic hardship."
President Barack Obama said he is unwilling to bargain with
Congress on the issue on Monday. He also said: "If congressional
Republicans refuse to pay America's bills on time, Social
Security checks and veterans' benefits will be delayed." "We
might not be able to pay our troops, or honor our contracts with
small business owners. Food inspectors, air traffic controllers,
specialists who track down loose nuclear material wouldn't get
Separately, the Federal Reserve Bank of New York reported that
manufacturing activity declined in January. According to the
report, the general business conditions index declined for the
sixth consecutive month and was at -7.8. This is contrary to
consensus estimates of 2.25. The new order index declined to -7.2
whereas shipment index fell to -3.1.
The technology sector emerged as the biggest loser for the second
consecutive day and the Technology SPDR (XLK) slipped 0.7%. The
sector was largely affected by fall in Apple's share price. Apple
has lost nearly 7% in the previous three trading session. Stocks
such as Intel Corporation (NASDAQ:
), Hewlett-Packard Company (NYSE:
), Super Micro Computer, Inc. (NASDAQ:
), IAC/InterActiveCorp (NASDAQ:
) and Oracle Corporation (NASDAQ:
) lost 0.5%, 2.5%, 1.4%, 1.7% and 0.7%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
AMER EAGLE OUTF (AEO): Free Stock Analysis
DILLARDS INC-A (DDS): Free Stock Analysis
DOLLAR TREE INC (DLTR): Free Stock Analysis
GAP INC (GPS): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
IAC/INTERACTIV (IACI): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
SUPER MICRO COM (SMCI): Free Stock Analysis
To read this article on Zacks.com click here.