Benchmarks finished Wednesday's trading session nearly flat as
investors received discouraging economic reports. Modest
expansion in economic conditions, greater-than-expected fall in
ISM Services Index and dismal private sector hiring were
overlooked as an outcome of the bitter winter season. Investors
also remained focused on the recent developments in Ukraine.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) lost 0.2% to close
Wednesday's trading session at 16,360.18. The Standard & Poor
(S&P 500) declined marginally, by 0.01% to finish at 1873.81.
However, the tech-laden Nasdaq Composite Index edged up 0.1% to
4,357.97. The fear-gauge CBOE Volatility Index (VIX) dropped 1.5%
to settle at 13.89. Total volume on the New York Stock Exchange
was 3.3 billion shares. Advancing stocks were outnumbered by
declining stocks on the NYSE. For 47% stocks that advanced, 49%
On the domestic front, the Federal Reserve's Beige Book indicated
that economic conditions expanded moderately in most of the 12
Federal Reserve Districts. However, New York and Philadelphia
experienced a slight decline in economic activities, citing
severe winter weather for their weakness. The rough weather
affected retail sales and manufacturing activities in most part
of the country.
According to data from the Institute for Supply Management, its
Non-Manufacturing Index for February has decreased 2.4 percentage
points to 51.6% from January's reading of 54%. The fall was more
than economists' expectation of a decrease to 53.8%. The ISM
Employment gauge also tumbled to 47.5% in February from a
three-year high of 56.4% in January. This was the first
contraction in 25 months.
Separately, a report from Automatic Data Processing, Inc.
) showed private sector hiring was lesser than expected in
February due to the harsh winter season. Private-sector jobs
increased from 127,000 in January to 139,000 in February.
However, this rise in jobs was much less than 205,000 in
Investors also kept a close eye on the updates from Crimea,
located in Southern Ukraine. Escalating political tension between
Russia and Ukraine had resulted in the worst selloff in about a
month on Monday. However, benchmarks bounced back on Tuesday
after fears of confrontation between both the parties subsided.
Eighteen of Dow's 30 components ended in the red yesterday. Exxon
Mobil Corporation (NYSE:
) led the fall as its shares plunged 2.8% to $93.80. The nation's
biggest oil company said its production is likely to be flat this
year. Delays in projects in Kazakhstan and Australia were cited
to be the reason behind flat production estimate.
Five out of ten sectors of the S&P 500 ended in green.
Financial Select Sector SPDR (XLF) led the gains as the sector
rose 1.1%. Top holdings from the sector such as Wells Fargo &
), JPMorgan Chase & Co. (NYSE:
), Berkshire Hathaway Inc. (NYSE:BRK-B), Bank of America
) and Citigroup Inc. (NYSE:
) increased 0.8%, 1.6%, 0.4%, 3.2% and 1.2%, respectively.
Among the declining sectors, Energy Select Sector SPDR (XLE) led
the decline as the sector fell 0.9%. Key stocks from the sector
such as Chevron Corporation (NYSE:
), Schlumberger Limited (NYSE:
), Occidental Petroleum Corporation (NYSE:
), ConocoPhillips (NYSE:
) and EOG Resources, Inc. (NYSE:
) decreased 0.8%, 0.5%, 0.4%, 0.3% and 0.6%, respectively.