Benchmarks scaled a new high on Monday, riding on positive
sentiment in the market. The Dow Jones continued rallying towards
another record high despite the absence of any major economic
reports and developments. The S&P 500 breached its highest
intra-day level briefly while the CBOE Volatility Index was at
its lowest level in more than six years. Among the top ten
S&P 500 industry groups, the financial stocks emerged as the
The Dow Jones Industrial Average (DJI) gained 0.4% to close
the day at 14,447.29. The S&P 500 increased 0.3% to finish
yesterday's trading session at 1,556.22. The tech-laden Nasdaq
Composite Index gained 0.3% to end at 3,252.87. The fear-gauge
CBOE Volatility Index (VIX) dropped 8.2% to settle at 11.56.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.36 billion shares, well
below the daily average of 6.48 billion shares. Advancing stocks
outnumbered the decliners. For the 53% that advanced, 43%
The Dow and the S&P 500 finished in the green owing to
positive investor sentiment. The Dow and the S&P 500 have
increased 10% and 9%, respectively this year. Since breaking a
record high last Tuesday, the Dow has increased about 2%
following encouraging economic data on employment and initial
claims. The Federal Reserve's continued support towards economic
stimulus also added fuel to investor sentiment. The S&P 500
is just 10 points short of breaching its all time high. On
Monday, the index touched its highest intraday level of 1,556.27
briefly. This figure was achieved on October 15, 2007.
On the international front, industrial output data released by
China reflects a poor start this year, the weakest since 2009.
Industrial output data came in at 9.9%, below the consensus
estimate of 10.3%. Apart from industrial output, growth in
lending and retail sales was also weak. In the first two months,
production increased 9.9% while retail sales grew 12.3%. Retail
sales data came in below market estimates of 15%.
Meanwhile, Italy faced a downgrade in light of poor economic
growth and unstable political conditions. Fitch downgraded Italy
to a BBB+ rating from A -. Fitch also said Italy's prospects are
negative; hence, further downgrades are possible. According to
the ratings firm: "The increased political uncertainty and
non-conducive backdrop for further structural reform measures
constitute a further adverse shock to the real economy amidst the
On the earnings front, shares of Dicks Sporting Goods Inc.
) plunged about 11% after it posted revenues and earnings below
the Street's estimates. The company also said it expects revenues
for the first quarter of 2013 would fall significantly. Dicks
Sporting added that reducing inventories in December adversely
affected sales of cold-weather clothes in January.
Financial stocks were the biggest gainers among the top ten
S&P 500 industry groups. The Financial Select Sector SPDR
(XLF) gained almost 0.8%. Stocks such as JPMorgan Chase & Co.
), Wells Fargo & Co (NYSE:
), Citigroup Inc. (NYSE:
), Bank of America Corp (NYSE:
) and Goldman Sachs Group, Inc. (NYSE:
) increased 0.6%, 1.7%, 2.0%, 0.7% and 0.2%, respectively.
The Materials sector also had a good run and the Materials
Select Sector SPDR (XLB) gained 0.6%. Stocks such as Alcoa Inc
), E I Du Pont De Nemours And Co (NYSE:
), The Dow Chemical Company (NYSE:
), Monsanto Company (NYSE:
) and FMC Corp (NYSE:
) increased 0.7%, 0.4%, 0.7%, 0.8% and 0.4%, respectively.
ALCOA INC (AA): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis
CITIGROUP INC (C): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
FMC CORP (FMC): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
MONSANTO CO-NEW (MON): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
To read this article on Zacks.com click here.