A more optimistic outlook on emerging markets and promising
consumer data helped benchmarks rebound to a positive finish
after three consecutive sessions of losses. In fact, the Dow
snapped its five-day rout and was 10 points short of a 100-point
gain. Pfizer's earnings beat also helped benchmarks buck the
downtrend. Investors will now closely watch what the Federal
Reserve has to say after its FOMC meeting.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) jumped over 90 points, or
0.6%, to finish yesterday's trading session at 15,928.56. The
Standard & Poor 500 (S&P 500) too gained 0.6% to close at
1,792.50. The tech-laden Nasdaq Composite Index gained 0.4% and
signed off Tuesday's session at 4,097.96. The fear-gauge CBOE
Volatility Index (VIX) dropped 9.3% to 15.80. U.S. exchanges saw
about 6.6 billion shares changing hands. Advancers outpaced
decliners on the New York Stock Exchange. For 73% stocks that
gained, 24% ended lower.
Yesterday's gains helped the Dow and S&P 500 erode their
weekly losses. The benchmarks are now up 0.3% and 0.1%,
respectively, this week. However, Nasdaq gained the least among
these benchmarks yesterday and is still down 0.7% so far this
week. Apple Inc. (NASDAQ:
) was one of the most actively traded stocks yesterday, but
Nasdaq's biggest component largely saw a selloff. The iPhone
maker saw its shares sliding roughly 8% after its earnings result
failed to impress investors.
However, investors took notice of an earnings beat from Pfizer
) along with positive results from the likes of DR Horton Inc.
) and Comcast Corporation (NASDAQ:
Pfizer's fourth quarter 2013 earnings of 56 cents beat consensus
estimates and also improved 22% year on year. DR Horton beat
consensus estimates on both counts while Comcast topped revenue
estimates. Comcast also added 43,000 video subscribers compared
with a net loss of 7,000 video customers in the prior-year
quarter. Shares of Pfizer, DR Horton and Comcast gained 2.6%,
9.8% and 1.6%, respectively.
Investor sentiment also improved because of an increase in
consumer confidence. The Conference Board said the Consumer
Confidence Index had moved up to 80.7 in January from December's
reading of 77.5. The gain outpaced the consensus estimate of an
improvement to 78.2. This was also the second-straight month of
gain. Lynn Franco, Director of Economic Indicators at The
Conference Board, said: "Consumers' assessment of the present
situation continues to improve, with both business conditions and
the job market rated more favorably".
The retail sector ended in the green with the SPDR S&P Retail
ETF (XRT) settling for a 0.2% gain. Among retail stocks, Target
), Macy's, Inc. (NYSE:
), Wal-Mart Stores Inc. (NYSE:
), Bon-Ton Stores Inc. (NASDAQ:
) and Kohl's Corp. (NYSE:
) gained 0.3%, 0.5%, 0.7%, 1.0% and 1.9%, respectively.
However, the other report on new orders for manufactured durable
goods was far from optimistic after new orders dropped 4.3% in
December. The U.S. Census Bureau's decline was also in sharp
contrast to consensus estimate of a gain of 2%.
Markets' northward movement was also a result of concerns over
emerging markets receding. Markets were routed last week
following political and economic concerns emanating from emerging
markets that dragged currencies to multi-months low.
In fact, emerging-market currencies suffered their worst selloff
in five years. Argentina's peso had its worst fall since 2002. A
threat to the stability of the government in Turkey has seen its
currency hitting record lows of late. Separately, hryvnia,
Ukraine's currency, dropped to a four-year low. South Africa's
rand saw itself weakening beyond 11 per dollar for the first time
since 2008. Benchmarks were also dented a sever blow following
the report of a contraction in China's manufacturing