Markets snapped two days of losses and ended higher on Friday
boosted by encouraging consumer spending data. However,
benchmarks lost some of their initial gains as the bio-tech
stocks adversely impacted markets in late afternoon. Microsoft's
strong gains following its announcement of launching Microsoft
Office on iPads propelled the Dow to end in the green.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.4% to close
Friday's trading session at 16,323.06. The Standard & Poor
(S&P 500) rose 0.5% to finish at 1,857.62. The tech-laden
Nasdaq Composite Index went up 0.1% to 4,155.76. The fear-gauge
CBOE Volatility Index (VIX) dropped 1.4% to settle at 14.41.
Total volume for the day was roughly 5.7 billion shares, lower
than this month's average of 6.9 billion. Declining stocks were
outnumbered by advancing stocks on the NYSE. For 28% stocks that
declined, 69% advanced.
Benchmarks opened in the positive territory as investors cheered
encouraging economic data on consumer spending. According to the
Bureau of Economic Analysis, personal consumption expenditure
increased 0.3% in February, in line with the consensus
expectation. It rose more than the 0.2% increase in January. Rise
in spending on health care and utilities were cited as the prime
factors for the increase in consumer spending.
Also, personal income increased 0.3% in February. This was in
line with consensus expectation and also with the rate of growth
in January. Disposable personal income (DPI) too increased 0.3%
in February, up from 0.2% increase in January.
However, another data from Thomson Reuters/University of Michigan
survey of consumers showed consumers felt less confident about
their financial and employment prospects as the March reading for
consumer sentiment dipped to 80.0. The consumer sentiment index
touched its lowest level since November 2013. This fall was more
than the consensus estimate of 80.6. However, the drop in
consumer sentiment was less than the University of Michigan and
Thomson Reuters' preliminary consumer sentiment reading of 79.9.
Microsoft Corporation (NASDAQ:
) was the biggest gainer among the Dow components. Shares of the
company went up 2.4% after it announced that it will bring
Microsoft Office to the iPad. The company also spoke of shifting
attention from Windows. This move was cheered by the investors.
The news also boosted other technology companies such as Oracle
), Cisco Systems, Inc. (NASDAQ:
) and Intel Corporation (NASDAQ:
) as the shares of these companies advanced 0.8%, 1.4% and 1.2%,
respectively. Overall, the Technology Select Sector SPDR (XLK)
In contrast to the technology stocks, bio-tech stocks had a poor
day. Shares of bio-tech companies such as Gilead Sciences Inc.
), Biogen Idec Inc. (NASDAQ:
) and Vertex Pharmaceuticals Incorporated (NASDAQ:
) plunged 4%, 5.1% and 4.2%, respectively. Overall, the Health
Care Select Sector SPDR (XLV) fell 0.4%.
For the week, the S&P 500 slipped 0.5% and the Dow ended
higher by 0.1%. The tech-heavy Nasdaq Composite Index dropped
almost 3%, its worst performance since October 2012.
The S&P 500 and the Nasdaq Composite Index ended the week in
red due to drop in bio-tech stocks. Declines in financial and
material sectors also dragged the markets lower. On Thursday,
investors' concerns about possibility of sooner-than-expected
rate hike had dragged down the S&P 500 to fall below the key
technical level of 1,850 and Nasdaq dropped to its lowest point
in six weeks. Earlier, Federal Reserve Chairwoman Janet Yellen
had commented that interest rate hikes might happen in about six
months after the end of the economic stimulus plan. She had
said that the quantitative easing program is expected to end this
fall. Throughout the week, escalating tension over Crimea dented
Nine out of 10 sectors of the S&P 500 ended in the green. The
SPDR S&P Homebuilders ETF (XHB) led the advance as the sector
rose 1.8%. Key stocks from the sector such as USG Corporation
), DR Horton Inc. (NYSE:
), Lennar Corp. (NYSE:
), Ryland Group Inc. (NYSE:
) and Lumber Liquidators Holdings, Inc. (NYSE:
) surged 2.8%, 2%, 1.5%, 2.5% and 1.3%, respectively.
The Energy sector followed the S&P Homebuilders ETF sector.
The Energy Select Sector SPDR (XLE) rose 1.3%. Top holdings from
the sector such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Schlumberger Limited (NYSE:
), Occidental Petroleum Corporation (NYSE:
) and Pioneer Natural Resources Co. (NYSE:
) increased 1.5%, 0.7%, 1.1%, 0.9%, and 1.8%, respectively.