Escalating tension between Russia and Ukraine dragged the
benchmarks down to the negative zone on Friday. The geopolitical
tension also outweighed upbeat nonfarm payroll data, which had
helped benchmarks open in the green. The S&P 500 and Dow
ended in the negative territory after reaching intraday all-time
highs. Despite Friday's losses, markets were able to finish in
the green for the week.
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to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) slipped 0.3% to close
Friday's trading session at 16,512.89. The Standard & Poor
500 (S&P 500) dropped 0.1% to finish at 1,881.14. The
tech-laden Nasdaq Composite Index too dropped 0.1% to
4,123.90. The fear-gauge CBOE Volatility Index (VIX)
plunged 2.6% to settle at 12.91. Total volume on the New York
Stock Exchange was 3.1 billion shares. Advancers outpaced
declining stocks on the NYSE. For 55% stocks that advanced, 41%
Mounting tension between Russia and Ukraine weighed on the
benchmarks on Friday. Ukraine's military entered Slavyansk in
order to recapture a city that has been a stronghold for
pro-Russian rebels. This incident prompted Russia to call for an
emergency meeting of the United Nations Security Council. Russia
described the incident as a
"criminal" assault by Ukraine that
has jeopardized the peace process.
Earlier on Friday, during an "anti-terror" operation in the
eastern city of Sloviansk, pro-Russian militants reportedly shot
down two of Ukraine's army helicopters.
A week earlier, the U.S. President Barack Obama and four of his
European allies France, Germany, Italy and UK had agreed to
"impose costs" on Russia after Russian
President Vladimir Putin failed to
observe the Geneva accord.
The geopolitical crisis offset the day's initial bullish mood
sparked by a rise in total nonfarm payroll jobs. Benchmarks had
opened higher after the U.S. Bureau of Labor Statistics said
total nonfarm payroll employment had risen to 288,000 in April.
This is significantly more than the consensus estimate of
214,000. The economy added the most number of jobs in April since
Investors also focused on the other part of the data that showed
unemployment rate dropped to 6.3% in April from 6.7% in March.
The consensus estimate had forecasted the unemployment rate to be
at 6.6%. The unemployment rate touched the lowest level since
September 2008. It was also the biggest one-month decline in 31
years. The unemployment rate dropped due to low participation
Meanwhile, the construction sector added 32,000 jobs over the
month, following a 17,000 increase in March. Employment in other
major industries such as manufacturing, transportation and
warehousing, information, financial activities and government,
improved little over the month.
However, the nonfarm payroll report also stated that the labor
force dropped a staggering 806,000 in April, its biggest drop in
six months and second largest decline in 32 years.
The rise in nonfarm payroll jobs and the decrease in unemployment
rate came in after the national employment report from Automatic
Data Processing, Inc. (NASDAQ:
) showed private sector hiring improved in April. Last Wednesday,
the ADP report stated 220,000 private jobs were added in April.
Separately, the U.S. Department of Commerce reported a 1.1%
increase in new orders for manufactured goods in March. However,
this was below the consensus estimate of 1.5%. This reading
follows an increase of 1.5% in February. Excluding
transportation, new orders increased 0.6% in March. Also,
unfilled orders, shipments and inventories data were up 0.6%,
0.3% and 0.1%, respectively.
For the week, the benchmarks ended in the green. The S&P 500,
Dow and Nasdaq gained 1.0%, 0.9% and 1.2%, respectively.
Benchmarks advanced for the week after a new deal between
AstraZeneca PLC (NYSE:
) and Pfizer Inc. (NYSE:
) boosted investor sentiment. Also, upbeat quarterly-results by
Merck & Co. Inc. (NYSE:
), Sprint Corporation (NYSE:
), Ameriprise Financial, Inc. (NYSE:
) and Cummins Inc. (NYSE:
) had a positive impact on the benchmarks. Further, the Federal
Reserve's decision to trim the monthly bond repurchase plan
helped benchmarks end higher. The Federal Open Market Committee
(FOMC) also indicated that economic
activity has picked up since
its last meeting in March.
The tech-heavy Nasdaq closed in the
green boosted primarily by gains in Internet
stocks such as Amazon.com Inc. (NASDAQ:
), Netflix,Inc. (NASDAQ:
), TripAdvisor Inc. (NASDAQ:
), The Priceline Group Inc.(NASDAQ:
), Facebook, Inc. (NASDAQ:
), Google Inc. (NASDAQ:
),Yahoo! Inc. (NASDAQ:
) and Yelp, Inc. (NYSE:
Additionally, the week's encouraging economic numbers
on pending home sales, private-sector hiring
and manufacturing activity were
welcomed by the investors.
Coming back to Friday, 5 out of 10 sectors of the S&P 500
ended in the red. The Utilities Select Sector SPDR (XLU) led the
decline as the sector dropped 2.1%. Key stocks from the sector
such as Duke Energy Corporation (NYSE:
), NextEra Energy, Inc. (NYSE:
), Dominion Resources, Inc. (NYSE:
), Southern Company (NYSE:
) and Exelon Corporation (NYSE:
) decreased 2.3%, 1.9%, 2.2%, 2.3% and 0.4%, respectively.
On the other hand, the SPDR S&P Homebuilders ETF (XHB) led
the advance among the S&P 500 sectors. The sector rose almost
1.5%. Key housing stocks such as PulteGroup, Inc. (NYSE:
), Lennar Corp. (NYSE:
), DR Horton Inc. (NYSE:
) and Beazer Homes USA Inc. (NYSE:
) increased 0.9%, 1.3%, 1.3% and 0.7%, respectively.