Markets started May on a winning note following a report which
stated that manufacturing had expanded at its fastest pace since
June last year. Alongside, the data also suggested growth in
hiring, orders and production. These reports enabled the Dow to
touch its highest level since late 2007 and all of the 10 industry
groups of the S&P 500 ended in the green.
The Dow Jones Industrial Average (DJI) gained 0.5% to settle the
day at 13,279.32. The Standard & Poor 500 (S&P 500) jumped
0.6% to finish Tuesday's trading session at 1,405.82. The
tech-laden Nasdaq Composite Index edged up 0.1% to close at
3,050.44. The fear-gauge CBOE Volatility Index (VIX) decreased 3.2%
to settle at 16.60. For 62% of the advancing stocks on the NYSE,
34% stocks traded lower. The remaining stocks were left unchanged.
Total volume on the NYSE was 3.8 billion shares.
The Dow has now recorded its highest level since December 28,
2007. The index was hovering around its key level of 13, 000 and
has now extended its gains over this level by precisely 279.32
points. Yesterday, 22 of the 30 Dow components ended in positive
territory with Alcoa, Inc. (NYSE:
AA
), Bank of America Corporation (NYSE:
BAC
), Chevron Corporation (NYSE:
CVX
), Walt Disney Co. (NYSE:
DIS
), Hewlett-Packard Company (NYSE:
HPQ
) and JPMorgan Chase & Co. (NYSE:
JPM
) gaining 2.5%, 2.5%, 1.6%, 1.6%, 1.7% and 1.9%, respectively.
Moreover, losses among the eight components were minimal with Cisco
Systems, Inc.'s (NASDAQ:
CSCO
) 0.9% decline being the largest.
Stocks in the S&P 500 also chalked up gains and none of the
10 industry groups in the S&P had to settle in the negative
zone. Energy and financials led the 10 industry groups with Energy
Select Sector SPDR (XLE) jumping 1.4% and Financial Select Sector
SPDR (XLF) gaining 1.0%. Among energy stocks, Exxon Mobil
Corporation (NYSE:
XOM
), Chevron Corporation (NYSE:
CVX
), ConocoPhillips (NYSE:
COP
) and Marathon Oil Corporation (NYSE:
MRO
) jumped 0.8%, 1.6%, 3.5% and 2.9%, respectively. Another
bellwether, Chesapeake Energy Corporation (NYSE:
CHK
) soared 6.3% after it fired its chairman Aubrey McClendon, who was
blamed for a controversial plan which enabled him to buy stakes in
every well the company drilled.
As for the financial bellwethers, American Express Company
(NYSE:
AXP
), Morgan Stanley (NYSE:
MS
) and Wells Fargo & Company (NYSE:
WFC
) joined the list of Bank of America and JP Morgan, as mentioned
earlier, and they gained 1.3%, 1.2% and 2.0%, respectively.
Benchmarks did not have a healthy run in April. The Dow moved
into the green with marginal gains of 1.5 points in April. On the
other hand, the S&P 500 dropped 0.8% to reverse its four-month
winning streak and end in the negative zone in April. The Nasdaq
too finished in the negative zone, dropping 1.5% for the month.
In contrast, benchmarks have started this month on a winning
note which was attributable to the manufacturing data released by
the Institute for Supply Management. The PMI increased from 53.4%
in March to 54.8% in April. This was the 33
rd
straight month of gains for the manufacturing sector with 16 of the
18 industries recording overall growth. The increase was also well
ahead of consensus estimates of a reading of 52.9%. The PMI
accounted for the 35
th
consecutive month of growth in the overall economy. Bradley J.
Holcomb, chairman of Institute for Supply Management Manufacturing
Business Survey Committee said: "The past relationship between the
PMI and the overall economy indicates that the average PMI for
January through April (53.7 percent) corresponds to a 3.8 percent
increase in real gross domestic product (GDP). In addition, if the
PMI for April (54.8 percent) is annualized, it corresponds to a 4.1
percent increase in real GDP annually".
Additionally, New Orders and the Production and Employment
Indexes also increased. The New Orders Index increased by 3.7
percentage points to 58.2 percent in April from 54.5% in March. The
Production Index gained 2.7 percentage points, reaching 61% in
April, up from March's reading of 58.3%. In addition, the
Employment Index expanded for the 31
st
consecutive month, increasing by 1.2 percentage points from the
56.1% recorded in March to 57.3% in April.
ALCOA INC (AA): Free Stock Analysis Report
AMER EXPRESS CO (AXP): Free Stock Analysis
Report
BANK OF AMER CP (BAC): Free Stock Analysis
Report
CHESAPEAKE ENGY (CHK): Free Stock Analysis
Report
CONOCOPHILLIPS (COP): Free Stock Analysis
Report
CISCO SYSTEMS (CSCO): Free Stock Analysis
Report
CHEVRON CORP (CVX): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
Report
JPMORGAN CHASE (JPM): Free Stock Analysis
Report
MARATHON OIL CP (MRO): Free Stock Analysis
Report
MORGAN STANLEY (MS): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
Report
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