Strong earnings from major companies once again propelled
benchmarks to a finish in the green. Following these
results, the S&P 500 climbed above 1,500 for the first time
in more than five years. New home sales decreased for the month
of December; but increased in 2012 to their highest point since
2009. Meanwhile, on the international front, German data
reflected an improvement in the business sentiment, which was at
its highest level in past six months. The Consumer Discretionary
sector was the major gainer among the S&P 500 industry
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The Dow Jones Industrial Average (DJI) gained 0.5% to close the
day at 13,895.98. The Standard & Poor 500 (S&P 500)
increased 0.5% to finish Friday's trading session at 1,502.96.
The tech-laden Nasdaq Composite Index surged 0.6% to end at
3149.71.The fear-gauge CBOE Volatility Index (VIX) rose 1.6% to
settle at 12.89. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.2
billion shares, lower than 2012's daily average of 6.45 billion
shares. Advancing stocks easily outnumbered decliners on the
NYSE; as for 59% stocks that rose, only 38% moved lower.
The blue-chip index gained 1.8%, S&P 500 surged 1.1% and
Nasdaq added 0.5% over the week. During the previous week,
better-than-expected earnings from major companies helped
benchmarks finish in the green. Initial claims dropped to their
lowest level in five years, also boosting investor sentiment. The
S&P 500 finished in the green for eight consecutive days for
the first time since 2004.
Software major Microsoft Corporation (NASDAQ:
) reported revenues trailing the Street's expectations. However,
the company beat the Street's consensus in terms of earnings per
share. Shares of Microsoft Corporation increased almost 1%
following its quarterly results. The company's profits decreased
3.7% year over year on account of increased expenses towards
marketing of Windows Operating System, tablets and smart phones.
Shares of the Procter & Gamble Company (NYSE:
) surged 4% after revenue and earnings beat the Street's
forecast. Growth came from the new products it introduced in
Brazil, Egypt and the US. The company has revised its outlook for
fiscal 2013. It expects to increase its revenue between 1% to 2%
from a previously estimated 1% while earnings are expected to be
between $3.97 and $4.07 per share compared to prior estimates of
$3.80 to $4.00 per share.
Following Procter & Gamble's results, the Consumer Staples
SPDR (XLP) surged 0.6%. Apart from P&G, PepsiCo, Inc. (NYSE:
), H.J. Heinz Company (NYSE:
), Kellogg Company (NYSE:
) and Kraft Foods Group Inc (NASDAQ:
) increased 0.4%, 0.1%, 0.4 and 0.5% respectively.
Meanwhile, the U.S. Census Bureau and the Department of Housing
and Urban Development reported new home sales data which noted
that new home declined in December. According to the report,
sales of single family homes declined in December to a seasonally
adjusted annual rate of 369,000 from the previous month's revised
estimates of 398,000. This was below the consensus estimate of
387,000. However, in the previous year, new home sales reached
their highest point since 2009.
Encouraging data from Germany indicated the revival of its
economy after the EU crisis. German business sentiment improved
for the third month, moving to the highest level in the past six
months. European banks are expected to repay a higher portion of
the loans the ECB provided them than originally expected.
Consumer Discretionary stocks rallied, gaining 1.1%. Major
gainers among the sector were Amazon.com, Inc. (NASDAQ:
), Comcast Corporation (NASDAQ:
), The Home Depot, Inc. (NYSE:
), The Walt Disney Company (NYSE:
) and McDonald's Corporation (NYSE:
) which increased 3.8%, 0.5%, 0.7%, 0.8% and 0.4%, respectively.