Benchmarks closed Friday's trading session with modest gains as
optimism from Wednesday's policy statement spilled over into a
second successive day. Friday's modest gains helped the S&P 500
to close at a record high for the third straight day. The Dow also
extended its winning streak to six sessions; it's longest since
December 2013. The blue-chip index also settled at a record high.
The Nasdaq closed at a level last seen in April 2000. On Friday,
volume was also higher than usual on a "quadruple witching" day.
Benchmarks also ended the week with gains with S&P 500
recording its biggest weekly percentage gain since April 17.
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The Dow Jones Industrial Average (DJI) added almost 0.2% to close
at 16,947.08. The Standard & Poor 500 (S&P 500) gained 0.2%
to finish at 16,962.87. The tech-laden Nasdaq Composite Index also
gained 0.2% and closed Friday's session at 4,368.04. The fear-gauge
CBOE Volatility Index (VIX) went up 2.2% to settle at 10.85. Total
volume for the day was roughly 7.2 billion shares, lower than this
month's average of 5.5 billion. Advancers beat the declining stocks
on the NYSE. For 56% stocks that advanced, 41% declined.
Optimism over the Federal Reserve's commitment to keep interest
rate low coupled with Federal Reserve Chairwoman Janet Yellen's
dovish comments on Wednesday helped benchmarks end higher on
Friday. On Wednesday, the Federal Open Market Committee (FOMC) had
decided in its two-day policy meeting to remain committed to
low-interest rates. The FOMC released a statement that said
benchmark interest rates were left unchanged at 0.00-0.25%.
Further, the Fed reduced its monthly asset repurchase plan. The
central bank trimmed its bond buyback plan for the fifth
consecutive month, by $10 billion. The asset repurchase plan
currently stands at $35 billion a month.
Federal Reserve Chairwoman Janet Yellen's dovish comments after the
release of the FOMC statement was also welcomed by investors.
According to Yellen, the central bank will consider a "wide range
of indicators" on the labor market for decisions on hikes in key
interest rates. She was also optimistic about the present economic
situation. She said: "Economic activity is rebounding in the
current quarter and will continue to expand at a moderate pace
On Friday, total volume on all stock exchanges was the largest
since April 15 on a "quadruple witching" day. A quadruple witching
refers to the third Friday of every March, June, September and
December. On these days, market index futures, market index
options, stock options and stock futures expire, usually resulting
in increased volatility
Meanwhile, the health-care sector was somewhat boosted after Shire
) rejected a $46.5 billion takeover bid from Illinois-based AbbVie
). This was AbbVie's third takeover bid. Shares of Shire plc surged
16.3%, whereas shares of AbbVie dropped 1.6%. Other health-care
stocks such as Johnson & Johnson (NYSE:
), Pfizer Inc. (NYSE:
), Merck & Co. Inc. (NYSE:
), Gilead Sciences Inc. (NASDAQ:
) and Amgen Inc. (NASDAQ:
) increased 1.4%, 0.6%, 1.1%, 1.8% and 2.7%, respectively. Overall,
the Health Care Select Sector SPDR (XLV) gained 0.9%.
Separately, CarMax Inc. (NYSE:
) gained the most among the S&P 500 components. Shares of
CarMax soared 16.5% after the company reported upbeat quarterly
results. The company reported first quarter 2014 earnings per share
of 76 cents, beating the Zacks Consensus Estimate of 66 cents per
share. The used-car retailer's net sales and operating revenues in
the quarter also increased 13.3% to $3.75 billion.
Friday's gains helped the S&P 500 record its biggest weekly
percentage gain since April 17. The S&P 500 advanced 1.4%. The
Dow and the Nasdaq too gained 1.0% and 1.3%, respectively, for the
Benchmarks ended in positive territory for the week as optimism
from Wednesday's policy statement continued. Gains in financial and
small-cap stocks also ensured a positive finish for the benchmarks.
Further, new deals between Medtronic, Inc. (NYSE:
) and Covidien plc (NYSE:
), Williams Companies, Inc. (NYSE:
) and Access Midstream Partners, L.P. (NYSE:
), Level 3 Communications, Inc.'s (NYSE:
) and TW Telecom Inc. (NASDAQ:
), and SanDisk Corp. (NASDAQ:
) and Fusion-io, Inc. (NYSE:
) boosted investor sentiment. Encouraging data on manufacturing
activity in the New York region, industrial production and U.S.
homebuilders' confidence also added to the bullish sentiment.
However, the gains were kept in check, owing to concerns over
sectarian clashes in Iraq and its effect on crude
. The Shiite group reportedly ignored Western calls for a
discussion with the Sunnis to curb the uprising in the northern
part of the country. On Monday, militants in Iraq published images
of hundreds of executed Shiite Iraqi soldiers. The militants
claimed to have executed the soldiers. The Wall Street Journal had
reported that militant rebels and government forces continued their
fight and killed 28 ISIS fighters. Iraq accounts for 3.3 million
barrels of crude every day.
Coming back to Friday, 5 out of 10 sectors of the S&P 500 ended
in the green. The energy sector notched significant gains on Friday
and emerged as the best gainer among the S&P industry groups.
The Energy Select Sector SPDR ETF (XLE) gained 1.0%. Key energy
stocks such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Schlumberger Limited (NYSE:
), Halliburton Company (NYSE:
), Transocean Ltd. (NYSE:
) and ConocoPhillips (NYSE:
) increased 1.2%, 0.3%, 1.1%, 1.8%, 1.5% and 0.7%,
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SHIRE PLC-ADR (SHPG): Free Stock Analysis
ABBVIE INC (ABBV): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis
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WILLIAMS COS (WMB): Free Stock Analysis Report
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