Despite better-than-expected initial claims data, benchmarks
closed in the red yesterday. The Dow Jones and S&P 500 had
reached record levels this week on the back of encouraging
international and domestic numbers, but retreated due to lack of
any catalysts. Of the top ten S&P 500 industry groups,
consumer discretionary stocks gained the most, while utilities
were the biggest losers.
The Dow Jones Industrial Average (DJI) decreased 0.2% to close
the day at 15,082.62. The S&P 500 lost 0.4% to finish
yesterday's trading session at 1,626.67. The tech-laden Nasdaq
Composite Index declined 0.1% to end at 3,409.17. The fear-gauge
CBOE Volatility Index (VIX) surged 3.7% to settle at 13.13.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.4 billion shares,
marginally above 2013's average of 6.36 billion shares. Declining
stocks outnumbered the advancers. For the 34% that advanced, 62%
The Dow and the S&P 500 retreated from their record levels
in the absence of catalysts which could push up the markets
further. During yesterday's trading session, both the Dow and the
S&P 500 had reached intra-day highs but fell lower as
investors booked their profits. During the first quarter of 2013,
robust corporate earnings played the role of a catalyst which
guided benchmarks to record highs. This quarter, unlike the first
quarter, weak volumes dominated the rally.
According to the U.S. Department of Labor, initial claims came
in at 323,000 compared to previous week's figure of 327,000 and
the consensus estimate of 346,000. Owing to encouraging initial
claims data, the average of the last month, for the first time,
has reduced to a pre-recession level and is also the lowest
recorded figures in the past five and a half years. The 4-week
moving average came in at 336,750, lower than previous week's
revised average of 343,000.
The Bloomberg Consumer Comfort Index decreased to -29.5 from
previous week's figure of -28.9. This index has been primarily
dominated by stock market movements and the housing sector.
However, two out of three indices which act as a barometer for
the consumer comfort index contracted. The index which
measures the economic condition came in at -57.8, down from
previous week's index of -57.2 while index related to personal
finance contracted to 0.8 from previous week's level of 3.0.
However, the index measuring buying conditions improved to -31.5
compared to previous week's figure of -32.5.
On the earnings front, shares of News Corp (NASDAQ:
) surged 4.5% after it posted fiscal third quarter earnings
better than the Street's estimates. Revenues increased 14% while
earnings came in at $1.22 a share, compared to $0.38 a share in
the previous year. Strong growth in the cable business offset
weakness in the publishing segment, contributing to the company's
profits. Acquisition of a stake in Sky Deutschland and sale of a
stake in SKY Network Television in New Zealand also contributed
to the business. Financials of the company were benefitted by
these transactions to the extent of $2.8 billion, however, were
adversely affected by charges related to the phone-hacking
scandal to the extent of $56 million.
Of the top ten S&P 500 industry groups, consumer
discretionary stocks gained the most. The Consumer Discretionary
) gained 0.1%. Stocks such as the Walt Disney Company (NYSE:
), Viacom, Inc. (NASDAQ:
), Netflix, Inc. (NASDAQ:
) and the Home Depot, Inc. (NYSE:
) gained 1.0%, 0.1%, 3.7% and 0.6%, respectively.
Utilities stocks were the biggest losers. The Utilities SPDR
(XLU) lost 1.5%. Stocks such as Duke Energy Corp (NYSE:
), Dominion Resources, Inc. (NYSE:
), Xcel Energy Inc. (NYSE:
), American Electric Power Company, Inc. (NYSE:
) and PPL Corporation (NYSE:
) lost 1.2%, 1.7%, 2.0%, 2.6% and 0.6%, respectively.
AMER ELEC PWR (AEP): Free Stock Analysis
DOMINION RES VA (D): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
DUKE ENERGY CP (DUK): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
NETFLIX INC (NFLX): Free Stock Analysis
NEWS CORP INC-A (NWSA): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
VIACOM INC-B (VIAB): Free Stock Analysis
XCEL ENERGY INC (XEL): Free Stock Analysis
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