Benchmarks finished Thursday's choppy run mostly lower as
investors took a cautious approach ahead of Friday's nonfarm
payroll report. While the day's mixed economic reports had some
negative impact on the S&P 500 and the Dow, the Nasdaq ended
in positive territory due to gains in Internet stocks.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) dropped 0.1% to close
Thursday's trading session at 16,558.87. The Standard & Poor
500 (S&P 500) dropped a meager 0.01% to finish at 1,883.68.
The tech-laden Nasdaq Composite Index went up 0.3% to 4,127.45.
The fear-gauge CBOE Volatility Index (VIX) dropped 1.2% to settle
at 13.25. Total volume for the day was roughly 6.4 billion
shares, lower than this month's average of 6.7 billion. Advancers
outpaced declining stocks on the NYSE. For 55% stocks that
advanced, 42% declined.
The S&P 500 and the Dow ended their three day winning streak
yesterday. Markets witnessed mixed economic data on Thursday.
While data on consumer spending and ISM reports were
better-than-expected, claims for unemployment benefits and
construction spending report were dismal.
According to the Bureau of Economic Analysis, personal income
increased 0.5% in March, more than the consensus estimate of a
0.4% gain. This rise in personal income came after it had
increased 0.4% in December. This was the strongest gain in income
since last August. Also, personal consumption expenditure
increased 0.9% in April, more than the consensus estimate of
0.6%. It was also higher than the 0.5% growth in March's personal
consumption expenditure. Consumer spending increased at the
fastest pace since August 2009.
The Institute for Supply management reported its April PMI had
increased 1.2 percentage points from March's adjusted reading of
53.7%. The rise to 54.9% in April was more than the
consensus estimate of an increase to 54.2%. The ISM Manufacturing
Index reached the highest level since December 2013.
However, construction spending in March missed forecasts. The US
Census Bureau of the Department of Commerce reported a 0.2% rise
in construction spending to $942.5 billion in March from revised
February estimate of $940.8 billion. However, this increase in
the payout by builders on residential and nonresidential
structures was less than the consensus estimate of an increase by
Separately, the U.S Department of Labor reported that seasonally
adjusted initial claims increased 14,000 to 344,000 in the week
ending April 26. This rise in application for unemployment
benefits reached the highest level since the end of February. The
rise was in sharp contrast to the consensus estimate of initial
claims decreasing to 318,000.
Investors remained focused on the U.S. Bureau of Labor
Statistics' upcoming report on nonfarm payroll data. The data is
scheduled for release on Friday. The total non-farm payroll
accounts for approximately 80% of the workers who produce the
entire gross domestic product of the United States.
The tech-heavy Nasdaq closed in the green boosted primarily by
gains in Internet stocks. Stocks such as Amazon.com Inc. (NASDAQ:
), Netflix, Inc. (NASDAQ:
), TripAdvisor Inc. (NASDAQ:
) and The Priceline Group Inc. (NASDAQ:
) increased 1.2%, 4.5%, 3.4% and 1.9%, respectively.
Internet stocks from the Technology sector such as Facebook, Inc.
), Google Inc. (NASDAQ:
) and Yahoo! Inc. (NASDAQ:
) increased 2.3%, 0.9% and 1.6%, respectively. Also, shares of
Yelp, Inc. (NYSE:
) surged 9.8% after the company reported encouraging result.
After the closing bell on Wednesday, Yelp posted a loss of 4
cents per share in the first quarter of 2014, narrower than the
Zacks Consensus Estimate of a loss of 6 cents per share. The
company's revenues surged 65.6% from the year-ago quarter to
$76.4 million, beating the Zacks Consensus Estimate of $75.0
Six out of 10 sectors of the S&P 500 ended in the green. The
SPDR S&P Homebuilders ETF (XHB) led the advance among the
S&P 500 sectors. The sector rose almost 1.0%. Key housing
stocks such as PulteGroup, Inc. (NYSE:
), Lennar Corp. (NYSE:
), DR Horton Inc. (NYSE:
) and Beazer Homes USA Inc. (NYSE:
) increased 0.8%, 2.0%, 2.5% and 4.4%, respectively.
On the other hand, the Materials Select Sector SPDR (XLB) led the
decline among the S&P 500 sectors. The sector decreased 0.6%.
Top holdings from the Materials sector such as E. I. du Pont de
Nemours and Company (NYSE:
), The Dow Chemical Company (NYSE:
), Monsanto Company (NYSE:
), LyondellBasell Industries NV (NYSE:
) and Praxair Inc. (NYSE:
) dropped 0.8%, 2.4%, 0.4%, 0.1% and 0.2%, respectively.