The Dow Jones and the S&P 500 garnered further gains
following encouraging economic data. The Dow touched a new high
while the S&P came closer to its highest point. Improved job
data provided by the ADP report acted as a catalyst to investor
sentiment yesterday. Meanwhile, positive sentiments were also
fuelled by encouraging data provided by the Fed's Beige Book.
Among the top ten S&P 500 industry groups, materials were the
biggest gainer and consumer staples stocks were the biggest
The Dow Jones Industrial Average (DJI) gained 0.3% to close
the day at 14,296.24. The S&P 500 increased 0.1% to finish
yesterday's trading session at 1,541.46. The tech-laden Nasdaq
Composite Index lost 0.1% to end at 3,222.36. The fear-gauge CBOE
Volatility Index (VIX) gained almost 0.1% to settle at 13.53.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.3 billion shares, below
the daily average of 6.48 billion shares. Advancing stocks
outnumbered the decliners. For the 54% that advanced, 43%
Positive economic data fuelled optimism in investor sentiment
yesterday. According to the Federal Reserve's Beige Book, the
country's housing market is experiencing a recovery and consumer
spending is increasing, indicating growth in the economy. There
has been a gradual growth in January and early-February. Most of
the districts witnessed growth in consumer spending, retail
sales, tourism, manufacturing sector, auto sector and residential
construction industries. On the negative side, districts faced
inventory shortage problems and pricing pressures. Wages were
mostly constant and there was a shortage of skilled people.
Positive investor sentiment was also fuelled by encouraging
private sector employment numbers. According to Automatic Data
) 198,000 jobs were added to the U.S. nonfarm private business
sector from January to February. Out of 198,000, 77,000 jobs were
added by small businesses, 65,000 jobs were added by medium
businesses and 57,000 were added by large businesses. The
goods-producing sector added 34,000 jobs, of which 9,000 were in
the manufacturing sector and 21,000 in the construction sector.
Service sector accounted for 164,000 more jobs.
Meanwhile, the U.S. Department of Commerce, new orders for
manufactured goods decreased in January by 2% or $9.6 billion.
This is was above the consensus estimate of a decrease of 2.3%
and below December's figure of a 1.3% increase. New orders have
been down for two out of three months. Shipments decreased
marginally by 0.2% or $1.0 billion. This is the second
consecutive month when the shipments have decreased. Unfulfilled
orders declined after four consecutive monthly increases of 0.2%
or $2.0 billion.
On the earnings front, shares of Staples, Inc. (NASDAQ:
) dropped 7.2% after quarterly revenue missed the Street's
estimates. However, earnings marginally beat the expectations.
The company also provided weak guidance for the next fiscal due
to lower discretionary spending in North America and Europe.
Materials stocks were the biggest gainers among the top ten
S&P 500 groups. The Materials Select Sector SPDR (XLB) gained
0.9%. Stocks such as the Dow Chemical Company (NYSE:
), Freeport-McMoRan Copper & Gold Inc. (NYSE:
), LyondellBasell Industries NV (NYSE:
), Ecolab Inc. (NYSE:
) and International Paper Company (NYSE:
) gained 1.6%, 4.1%, 2.9%, 0.5% and 1.8%, respectively.
Consumer staples were the biggest losers among the top ten
S&P 500 groups. The Consumer Staples Select Sect. SPDR (XLP)
lost 0.2%. Stocks such as Wal-Mart Stores, Inc. (NYSE:
), PepsiCo, Inc. (NYSE:
), Altria Group Inc. (NYSE:
), Walgreen Company (NYSE:
) and General Mills, Inc. (NYSE:
) lost 0.5%, 0.1%, 0.3%, 1.9% and 0.1%, respectively.
AUTOMATIC DATA (ADP): Free Stock Analysis
DOW CHEMICAL (DOW): Free Stock Analysis
ECOLAB INC (ECL): Free Stock Analysis Report
FREEPT MC COP-B (FCX): Free Stock Analysis
GENL MILLS (GIS): Free Stock Analysis Report
INTL PAPER (IP): Free Stock Analysis Report
LYONDELLBASEL-A (LYB): Free Stock Analysis
ALTRIA GROUP (MO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
STAPLES INC (SPLS): Free Stock Analysis
WALGREEN CO (WAG): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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