Stock Market News for May 12, 2014 - Market News

By Abhijit Ghosh,

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The Dow closed at a record high on Friday and fellow benchmarks also ended in positive territory boosted by gains in momentum stocks. Consumer discretionary and the healthcare stocks led a late-session rally. However, Friday's gains were not enough to restrict the S&P 500 and the Nasdaq from finishing in the red for the week. In fact, the Nasdaq recorded its biggest weekly fall in a month. 

For a look at the issues currently facing the markets, make sure to read today's  Ahead of Wall Street  article

The Dow Jones Industrial Average (DJI) gained 0.2% to close Friday's trading session at 16,583.34. The Standard & Poor 500 (S&P 500) too rose about 0.2% to finish at 1,878.48. The tech-laden Nasdaq Composite Index went up 0.5% to 4,071.87. The fear-gauge CBOE Volatility Index (VIX) dropped 3.8% to settle at 12.92. Total volume for the day was roughly 5.7 billion shares, lower than this month's average of 6.2 billion. Advancers outpaced declining stocks on the NYSE.  For 54% stocks that advanced, 42% declined.

Benchmarks closed in the green primarily boosted by gains in high-growth stocks. Internet stocks from the Technology sector such as Facebook, Inc. (NASDAQ: FB ), Google Inc. (NASDAQ: GOOG ), Twitter, Inc. (NYSE: TWTR ), Groupon, Inc. (NASDAQ: GRPN ), Yelp, Inc. (NYSE: YELP ) and LinkedIn Corporation (NYSE: LNKD ) increased 0.9%, 1.5%, 0.3%, 6.9%, 1.8% and 2.5%, respectively.

However, unlike Internet names, certain technology bellwethers ended in the red. Shares of Apple Inc. (NASDAQ: AAPL ), the largest component of both the Nasdaq and the S&P 500, dropped 0.4% on news that the company is planning to acquire Beats Electronics for a staggering $3.2 billion. Analysts believe the acquisition price seems too high for a company, which was valued only at $1.0 billion in its latest round of private funding by the The Carlyle Group LP (NASDAQ: CG ). 

Shares of online retailer Inc. (NASDAQ: AMZN ), online travel company TripAdvisor Inc. (NASDAQ: TRIP ) and The Priceline Group Inc. (NASDAQ: PCLN ) increased 1.4%, 1.6% and 2.5%, respectively.

Shares of Internet television network provider, Netflix, Inc. (NASDAQ: NFLX ) increased 2.1% after the company raised its Internet video prices by $1 per month for new customers. Netflix's existing 36 million U.S. subscribers will continue to pay the old price of $8 per month until May 2016. Overall the Consumer Discret Select Sector SPDR (XLY) gained almost 0.6%.

Shares of momentum stocks such as electric car maker Tesla Motors, Inc. (NASDAQ: TSLA ) and Internet radio service provider Pandora Media, Inc. (NYSE: P ) also advanced, by 2.1% and 1.9%, respectively.

Bio-tech stocks too boosted the broader markets on Friday. Gilead Sciences Inc. (NASDAQ: GILD ), Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX ) Amgen Inc. (NASDAQ: AMGN ), Biogen Idec Inc. (NASDAQ: BIIB ) andCelgene Corporation (NASDAQ: CELG ) increased 1.3%, 1.9%, 0.6%, 1.3% and 1.8%, respectively.

The Health Care Select Sector SPDR (XLV) gained 0.6%. Key stocks from the sector such as Johnson & Johnson (NYSE: JNJ ), AbbVie Inc. (NYSE: ABBV ) and Bristol-Myers Squibb Company (NYSE: BMY ) increased 0.4%, 0.2% and 0.9%, respectively. Also, shares of drug manufacturer Merck & Co. Inc. (NYSE: MRK ) went up 0.7% a day after U.S. health regulator approved the drug, vorapaxar. 

Coming to economic data, the U.S. Department of Commerce announced that the US wholesale inventories rose 1.1% in March after it increased 0.7% in February. This rise in wholesale inventories in March was more than the consensus estimate of a rise of 0.5%.

Separately, the U.S. Department of Labor reported job openings at US workplaces decreased to 4.014 million in March from 4.125 million in February. However, analysts expected the number of job openings to remain unchanged compared with February's figure.

The S&P 500 and the Nasdaq closed in the red for the week. However, the Dow managed to finish in the green. The S&P 500 and the Nasdaq dropped 0.1% and 1.3%, respectively. The blue-chip index gained 0.4%. This was Nasdaq's largest weekly fall in four weeks.

Benchmarks ended a choppy week mostly lower, dragged down by intense selling pressure in Internet stocks. Also, selloffs in utilities and energy sectors had a negative impact on the benchmarks. Moreover, a decline in AIG's quarterly income adversely affected the benchmarks. Separately, Whole Food's dismal quarterly result swas a big drag on the Nasdaq.

Federal Reserve Chairwoman Janet Yellen's indication to keep the key lending rates low, Russian President Vladimir Putin's willingness to discuss measures to ease the Ukrainian crisis and dovish comments from ECB President Mario Draghi were some of the positives for the week. 

Additionally, the week's encouraging services sector data, increase in ISM Services Index and upbeat initial claims numbers were welcomed by the investors.

Coming back to Friday, 7 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 0.9%. Key housing stocks such as PulteGroup, Inc. (NYSE: PHM ) and Beazer Homes USA Inc. (NYSE: BZH ) increased 0.9% and 0.1%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing US Markets
Referenced Stocks: XLY , XLV , XHB , AAPL , AMZN

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