Benchmarks ended Tuesday's trading session little changed after
investors took a breather. However, the minute gains helped the
blue-chip index close at a record level for the tenth time this
year. The S&P 500 snapped a four-day winning streak and ended
in the red as investors focused on stock valuations. An increase in
job openings and a rise in U.S wholesale inventories hardly
impacted the markets.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained a meager 0.02% to
close Tuesday's trading session at 16,945.92. The Standard &
Poor 500 (S&P 500) dropped a meager 0.02% to finish at
1,950.79. The tech-laden Nasdaq Composite Index went up a tad 0.04%
to 4,338.00. The fear-gauge CBOE Volatility Index (VIX) dropped
1.4% to settle at 10.99. Total volume for the day was roughly 5.20
billion shares, lower than last month's average of 5.76 billion.
Decliners outpaced advancing stocks on the NYSE. For 55%
stocks that declined, 41% advanced.
The S&P 500 ended in negative territory as investors assessed
equity valuations. The S&P 500 traded at 16.5 times the
forecasted earnings of its members. This was more than the multiple
of 14.8 times at the beginning of February. Moreover, the gauge's
14-day relative strength index was at 73.7 on Tuesday, above the
key technical level of 70. Any reading above 70 indicates a sell
signal. Further, analysts have predicted profits from companies on
the S&P 500 might increase 7.4% in 2014, less than January's
projection of a growth of 9.7%.
Molson Coors Brewing Company (NYSE:
) performed the best among the S&P 500 components. Shares of
the company jumped 5.4% to a 52-week high on speculation that the
company might buy MillerCoors, a joint venture between SABMiller
and MolsonCoors. On the other hand, Tyson Foods, Inc. (NYSE:
) was the worst performing stock. Tyson Foods extended Monday's
losses by another 3.8%. Shares of Tyson Foods dropped after it said
on Monday that the company will buy The Hillshire Brands Company
) in an all-cash deal valued at $8.55 billion or $63 per share.
In another development, RadioShack Corp. (NYSE:
) plunged 10.4% after the company reported wider-than-expected
loss. The company reported first quarter 2014 loss of 97 cents per
share, wider than the Zacks Consensus Estimate of a loss of 54
cents per share.
Internet stocks were the biggest gainers on Tuesday. Shares of
Facebook, Inc. (NASDAQ:
) surged 4.6% after eBay Inc. (NASDAQ:
) declared that PayPal President David Marcus will leave the
company to join Facebook. David Marcus will leave on June 27 to
head Facebook's messaging product business. Other Internet names
such as FireEye, Inc. (NASDAQ:
), Yahoo! Inc. (NASDAQ:
), LinkedIn Corporation (NYSE:
), Amazon.com Inc. (NASDAQ:
) and Netflix, Inc. (NASDAQ:
) gained 2.3%, 0.8%, 4.7%, 1.5% and 1.2%, respectively.
Bio-tech stocks also advanced yesterday. Achillion Pharmaceuticals,
) skyrocketed 83.3% after the Food and Drug Administration lifted
the clinical hold on Achillion's lead drug sovaprevir. Receptos,
) shares surged 36.8% following a positive phase 2 result for its
multiple sclerosis drug, RPC1063. Other bio-tech stocks such as
Gilead Sciences Inc. (NASDAQ:
), Amgen Inc. (NASDAQ:
) and Celgene Corporation (NASDAQ:
) increased 0.7%, 0.6% and 0.6%, respectively. Overall, the Health
Care Select Sector SPDR (XLV) led the advance among the S&P 500
sectors. The sector gained 0.3%.
Tuesday's economic data had little impact on the markets. The U.S.
Department of Commerce announced that US wholesale inventories rose
1.1% in April. This rise in wholesale inventories in April was more
than the consensus estimate of a rise of 0.5%. The U.S. Department
of Labor reported job openings at US workplaces rose to 4.46
million in April from 4.17 million in March. This rise in job
openings was also more than the analysts' expectations of a rise to
Six out of 10 sectors of the S&P 500 ended in the red. The SPDR
S&P Homebuilders (XHB) led the decline among the S&P 500
sectors. The sector declined 0.7%. Key housing stocks from the
sector such as DR Horton Inc. (NYSE:
), Lennar Corp. (NYSE:
), Toll Brothers Inc. (NYSE:
), Beazer Homes USA Inc. (NYSE:
) and PulteGroup, Inc. (NYSE:
) lost 0.9%, 0.4%, 0.4%, 1.7% and 0.5%, respectively.
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MOLSON COORS-B (TAP): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis Report
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