Stock Market News for July 02, 2014 - Market News


Benchmarks started the second half of 2014 on a positive note after economic data showed manufacturing activity picked up in U.S and Asia. Gains in health-care, technology and consumer discretionary sectors also propelled the S&P 500 and the Dow to close at record highs. Bio-tech stocks primarily boosted the Nasdaq. Upbeat U.S. auto sales in June also boosted investor sentiment.

For a look at the issues currently facing the markets, make sure to read today's  Ahead of Wall Street  article

The Dow Jones Industrial Average (DJI) jumped more than 129 points or about 0.8% to close Tuesday's trading session at 16,956.07. The Standard & Poor 500 (S&P 500) advanced almost 0.7% to finish at 1,973.32. The tech-laden Nasdaq Composite Index closed at 4,458.65; gaining 1.1%. The fear-gauge CBOE Volatility Index (VIX) dropped 3.6% to settle at 11.15. Total volume for the day was roughly 5.84 billion shares, almost in line with last month's average of 5.80 billion. Advancers outpaced declining stocks on the NYSE. For 65% stocks that advanced, 32% declined.

The blue-chip index was within two points of 17,000 during the intra-day session. It closed at a record level for the twelfth time this year. The S&P 500 ended at another high; the twenty-third one this year.

The Institute for Supply management reported June PMI of 55.3%. Manufacturing activity in June was a tad lower than May's reading of 55.4%. However, it indicated expansion in factory output for the 13th successive month. Any reading above 50 suggests expansion.

New orders climbed 2 percentage points to 58.9% in June from May's reading of 56.9%. New orders for cars, computers, chemicals and various other products hit the highest level since the end of last year. Separately, Markit's final U.S. Manufacturing Purchasing Managers Index was at 57.3 in June, the highest reading since May 2010.

Manufacturing activity also picked up in Asia. Investors were encouraged by a survey showing China's manufacturing activity improved in June for the first time in six months. China's final reading of the HSBC/Markit purchasing managers' index (PMI) rose to 50.7 in June from May's reading of 49.4.

Moreover, Japan's manufacturing activities also expanded in June. The final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.5 in June, more than June's preliminary reading of 51.1.

Coming back to the domestic front, better-than-expected U.S. car sales indicated a rise in consumer spending. Domestic-made vehicle sales climbed to an annualized rate of 13.5 million in June, more than the consensus estimate of an increase to 12.9 million. Total vehicle sales also increased to an annualized rate of 17.0 million in June, more than the consensus estimate of a rise to 16.4 million. U.S. car and light truck sales reached the highest level in more than eight years.

Shares of major auto manufacturer, General Motors Company (NYSE: GM ) surged almost 3.6% after the company reported its sales of U.S. car and light trucks rose 1% in June to 267,461 vehicles. Sales of other auto majors such as Chrysler Group, Toyota Motor Corporation (NYSE: TM ), Nissan Motor Co Ltd and Hyundai Motor Co increased by 9.0%, 3.0%, 5.0% and 2.0%, respectively on a year-on-year basis. Separately, sales of Ford Motor Co. (NYSE: F ) dropped by 5.0% to 222,064 vehicles. However sales exceeded the forecast of 217,007 vehicles.

In another report, the US Census Bureau of the Department of Commerce reported a 0.1% rise in construction spending from revised April estimate of $955.1 billion to $956.1 billion in May. However, this increase in the payout by builders on residential and nonresidential structures was less than the consensus estimate of an increase of 0.5%.

Gains in bio-tech stocks ensured a positive finish for the Nasdaq. Gilead Sciences Inc. (NASDAQ: GILD ), Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX ) Amgen Inc. (NASDAQ: AMGN ), Biogen Idec Inc. (NASDAQ: BIIB ), Celgene Corporation (NASDAQ: CELG ) and Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN ) increased 2.9%, 1.2%, 1.6%, 2.9%, 3.1% and 7.4%, respectively. The Health Care Select Sector SPDR (XLV) gained 1.3%, the highest among the S&P 500 sectors.

The blue-chip index came close to the 17,000 milestone in early afternoon trading led a by a surge in shares of International Business Machines Corporation (NYSE: IBM ) and Visa Inc. (NYSE: V ). Shares of IBM and Visa went up 2.8% and 1.7%, respectively. Other key technology stocks such as Apple Inc. (NASDAQ: AAPL ), Microsoft Corporation (NASDAQ: MSFT ), Verizon Communications Inc. (NYSE: VZ ), AT&T, Inc. (NYSE: T ) and Google Inc. (NASDAQ: GOOGL ) gained 0.6%, 0.4%, 0.9%, 0.3% and 1.2%, respectively. Overall, the Technology Select Sector SPDR (XLK) advanced 1.0%.

Elsewhere, the consumer discretionary sector also showed signs of strength. Shares of Netflix, Inc. (NASDAQ: NFLX ) soared 7.4% after The Goldman Sachs Group, Inc. (NYSE: GS ) upgraded its rating. Key stocks from the sector such as The Walt Disney Company (NYSE: DIS ), Comcast Corporation (NASDAQ: CMCSA ) and Inc. (NASDAQ: AMZN ) increased 0.9%, 0.8% and 2.3%, respectively. The Consumer Discretionary Select Sector SPDR (XLY) gained 1.1%, the second highest among the S&P 500 sectors. Overall, 9 out of 10 sectors of the S&P 500 ended in the green.

Small-cap stocks also extended their gains on Tuesday. The Russell 2000 Index of small-cap stocks gained 1.1% to end at 1205.82, slightly less than the previous record close of 1208.65, acheived on March 4.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , US Markets

Referenced Stocks: XLV , XLK , XLY , GM , TM

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