Benchmarks ended in the positive territory on Friday, following
reports of a rise in new home sales. Friday's gains led the S&P
500 close at a record high and helped the blue-chip index close in
the green for the year. Homebuilder stocks were among the biggest
gainers for the day. Hewlett-Packard and GameStop's
better-than-expected earnings added to the bullish sentiment. A new
deal between TripAdvisor and LaFourchette also enthused investors.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.4% to close
Friday's trading session at 16,606.27. The Standard & Poor 500
(S&P 500) also gained 0.4% to finish at 1,900.53. The
tech-laden Nasdaq Composite Index rose 0.8% to 4,185.81. The
fear-gauge CBOE Volatility Index (VIX) plunged 5.6% to settle at
11.36. Total volume for the day was roughly 4.6 million shares,
lower than this month's average of 5.9 million. Advancers
outpaced declining stocks on the NYSE. For 65% stocks that
advanced, 31% declined.
Upbeat new single-family home sales report from the U.S. Census
Bureau and the Department of Housing and Urban Development lifted
investor sentiment. Sales of new single-family houses increased
6.4% from March's revised rate of 407,000 to seasonally adjusted
annual rate of 433,000 in April. The rise was larger than expected
as the consensus estimate predicted it would improve to 422,000.
On Thursday, existing home sales also rose at the fastest pace
since December2013. Existing home sales data released by National
Association of Realtors showed that sales increased 1.3% to a
seasonally adjusted annual rate of 4.65 million in April from 4.59
million in March.
Following news on new single-family home sales, SPDR S&P
Homebuilders ETF (XHB) rose 1.6%. The sector outperformed all
the other sectors as key housing stocks such as DR Horton Inc.
), Lennar Corp. (NYSE:
), Toll Brothers Inc. (NYSE:
), KB Home (NYSE:
), Beazer Homes USA Inc. (NYSE:
) and PulteGroup, Inc. (NYSE:
) rallied 4.1%, 3.9%, 1.6%, 2.5%, 2.1% and 2.5%, respectively.
Overall, 8 out of 10 sectors of the S&P 500 ended in the green.
Hewlett-Packard Company's (NYSE:
) better-than-expected quarterly results and announcement of more
job cuts had a positive impact on the benchmarks. Hewlett-Packard's
second-quarter non-GAAP earnings of 88 cents came in line with the
Zacks Consensus Estimate. Second-quarter earnings were also within
management's guidance range of 85 to 89 cents. Cost control
measures and a lower share count helped reported earnings increase
1.2% from the year-ago quarter. The personal computer maker also
stated that in order to turnaround the company it may reduce
another 16,000 jobs. Hewlett-Packard had already announced 34,000
job cuts. Shares of Hewlett-Packard surged 6.1%.
GameStop Corp.'s (NYSE:
) upbeat quarterly results also lifted the broader markets. The
video game and entertainment software retailer posted first-quarter
fiscal 2014 earnings per share of 59 cents more than the Zacks
Consensus Estimate of 57 cents. The first-quarter fiscal 2014
earnings surged 28.3% from 46 cents delivered in the year-ago
quarter. Shares of GameStop increased 4.2%.
TripAdvisor Inc.'s (NASDAQ:
) deal with Paris-based online restaurant booking company
LaFourchette was welcomed by investors. Shares of TripAdvisor
climbed 3.8% a day after the online travel research company
finalized the acquisition of LaFourchette. However, the financial
terms of the acquisitions have been kept confidential.
Separately, technology bellwethers such as Apple Inc. (NASDAQ:
) and Amazon.com Inc. (NASDAQ:
) boosted the Nasdaq and helped it outperform the broader markets.
Shares of Apple and Amazon.com increased 1.1% and 2.4%,
Transportation stocks also rallied on Friday. Stocks such as Delta
Air Lines Inc. (NYSE:
), Southwest Airlines Co. (NYSE:
), Alaska Air Group, Inc. (NYSE:
), Norfolk Southern Corporation (NYSE:
) and Union Pacific Corporation gained 1.4%, 2.1%, 1.2%, 0.2% and
On the other hand, disappointing earnings results by Staples, TJX,
Dick's Sporting Goods and Urban Outfitters coupled with
Caterpillar's disappointing sales figures weighed on the benchmarks
For the week, the benchmarks closed in the green. The S&P 500,
the Dow and the Nasdaq gained 1.2%, 0.7% and 2.3%, respectively.
Gains in small-cap and high-growth stocks drove benchmarks higher
for the week. Additionally, gains from consumer discretionary and
energy stocks helped benchmarks finish in the green. The Nasdaq was
boosted primarily by gains in bio-tech stocks.
Separately, benchmarks were positively impacted after minutes from
the Federal Open Market Committee's (FOMC)
April meeting indicated that the
central bank decided to remain
flexible when it comes to
raising short term interest rates. The Federal
Reserve officials in its April 29-30 meeting discussed "several
approaches" to tighten monetary policy but made no decisions on
which tools to apply.
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APPLE INC (AAPL): Free Stock Analysis Report
ALASKA AIR GRP (ALK): Free Stock Analysis
AMAZON.COM INC (AMZN): Free Stock Analysis
BEAZER HOMES (BZH): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis
D R HORTON INC (DHI): Free Stock Analysis
GAMESTOP CORP (GME): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis
SOUTHWEST AIR (LUV): Free Stock Analysis Report
NORFOLK SOUTHRN (NSC): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
TOLL BROTHERS (TOL): Free Stock Analysis Report
TRIPADVISOR INC (TRIP): Free Stock Analysis
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