Merger and acquisition activity and expectations that ECB will
reduce key lending rates helped benchmarks end higher on Tuesday.
Tuesday's gains led the S&P 500 to a record high for the second
straight session. The Nasdaq reached its highest level in almost
eight weeks boosted primarily by gains in the technology sector.
The day's encouraging economic numbers on manufactured durable
goods, improved consumer confidence and an increase in the leading
measure of U.S. home prices also lifted investor sentiment.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.4% to close
Tuesday's trading session at 16,675.50. The Standard & Poor 500
(S&P 500) went up 0.6% to finish at 1,911.91. The
tech-laden Nasdaq Composite Index rose 1.2% to 4,237.07. The
fear-gauge CBOE Volatility Index (VIX) advanced 1.3% to settle at
11.51. Total volume for the day was roughly 5.38 billion shares,
lower than this month's average of 5.80 billion. Advancers outpaced
declining stocks on the NYSE. For 66% stocks that advanced, 30%
European Central Bank President Mario Draghi's comments on Memorial
Day helped benchmarks open higher on Tuesday. He urged banks to be
"particularly watchful" for any "pernicious negative spiral" of low
inflation rate and weak lending rates derailing the eurozone's
recovery. His comments hinted that ECB might cut rates and provide
more economic stimulus during next week's policy meeting.
A new deal between The Hillshire Brands Company (NYSE:
) and Pilgrim's Pride Corporation (NASDAQ:
) also added to the bullish sentiment. Shares of Hillshire Brands
surged 22.1% after Pilgrim's Pride agreed to buy Hillshire in an
all-cash deal valued at $6.4 billion. The deal will help the
world's second-largest chicken processor to expand its business
with Hillshire's sausages and lunch meats. Shares of Pilgrim's
Pride also increased 1.7%.
The tech-heavy Nasdaq was boosted by gains in technology stocks.
Shares of Apple Inc. (NASDAQ:
), the heaviest component in the Nasdaq, gained 1.9%. Shares of the
iPhone and iPad maker touched the highest level since August 2012.
Other key stocks from the sector such as Microsoft Corporation
), Google Inc. (NASDAQ:
), QUALCOMM Incorporated (NASDAQ:
) and Cisco Systems, Inc. (NASDAQ:
) advanced 0.2%, 1.9%, 0.7% and 0.8%, respectively.
Internet stocks from the Technology sector such as Facebook, Inc.
), FireEye, Inc. (NASDAQ:
), Yahoo! Inc. (NASDAQ:
), Yelp, Inc. (NYSE:
) and LinkedIn Corporation (NYSE:
) increased 3.5%, 4.7%, 0.3%, 3.3% and 2.9%, respectively. Overall,
the Technology Select Sector SPDR (XLK) rose 0.9%.
Bio-tech stocks also rallied on Tuesday. Stocks such as Gilead
Sciences Inc. (NASDAQ:
), Vertex Pharmaceuticals Incorporated (NASDAQ:
), Amgen Inc. (NASDAQ:
), Biogen Idec Inc. (NASDAQ:
) and Celgene Corporation (NASDAQ:
) increased 1.5%, 3.3%, 1.4%, 3.4% and 3.3%, respectively.
Encouraging economic numbers also boosted investor sentiment.
According to the US Census Bureau, new orders for manufactured
durable goods in April increased 0.8%, in contrast to the consensus
estimate of a 0.7% decline. Excluding transportation, new orders
for manufactured durable goods increased 0.1% in April. Unfilled
orders for manufactured durable goods in April were up 1.0%.
The Conference Board reported that the Consumer Confidence index
had increased from 81.7 in April to 83.0 in May. The rise was
slightly less than the consensus estimate of an increase to 83.1.
The Expectations Index went up from 83.9 to 84.8. The Present
Situation Index also increased from 78.5 to 80.4.
Separately, the S&P/Case-Shiller Home Price Indices revealed
that 20-City composite index, rose 12.4% year-on-year in March.
However, the rate of growth declined from February's year-on-year
rise of 12.9%. Key housing stocks from the sector such as Toll
Brothers Inc. (NYSE:
) and PulteGroup, Inc. (NYSE:
) gained 0.4% and 0.5%, respectively. Overall, the SPDR S&P
Homebuilders ETF (XHB) increased 0.2%.
All the 10 sectors of the S&P 500 ended in the green. The
Financials sector along with the Technology sector gained the most.
The Financial Select Sector SPDR (XLF) increased 0.9%. Top holdings
from the sector such as Wells Fargo & Company (NYSE:
), JPMorgan Chase & Co. (NYSE:
), Bank of America Corporation (NYSE:
), Citigroup Inc. (NYSE:
) and American Express Company (NYSE:
) increased 0.8%, 1.1%, 3.4%, 0.6% and 2.9%, respectively.
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APPLE INC (AAPL): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis
FACEBOOK INC-A (FB): Free Stock Analysis Report
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GILEAD SCIENCES (GILD): Free Stock Analysis
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LINKEDIN CORP-A (LNKD): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
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