Encouraging jobless claims numbers along with a move by the
European Central Bank (ECB) to cut key interest rates gave a
boost to major indices on Thursday. The S&P 500 recouped
yesterday's losses and touched a new all-time high following
these positive developments. Among the top ten S&P 500
industry groups, energy shares led the gains while utilities
shares were the only losers.
The Dow Jones Industrial Average (DJI) increased 0.9% to close
the day at 14,831.58 The S&P 500 gained 0.9% to finish
yesterday's trading session at 1,597.57. The tech-laden Nasdaq
Composite Index rose 1.3% to end at 3,340.62. The fear-gauge CBOE
Volatility Index (VIX) lost 6.2% to settle at 13.59. Consolidated
volumes on the New York Stock Exchange, American Stock Exchange
and Nasdaq were roughly 6.02 billion shares, below 2013's average
of 6.36 billion shares. Advancers stocks outnumbered the
decliners. For the 73% that advanced, 24% declined.
Benchmarks gained almost 1% after the jobless claims report
was released. According to the U.S. Department of Labor,
seasonally adjusted initial claims were reported at 324,000. This
figure indicated a decrease of 18,000 from previous week's figure
of 342,000. The 4-week moving average witnessed a drop of 16,000
to 342,250. This week, jobless claims nose-dived to its lowest
level which was prevailing during the "early days" of the
recession. On the back of this encouraging report, the consensus
estimate for nonfarm payrolls has been set at 145,000.
Meanwhile, the Bloomberg Consumer Comfort Index rose to its
highest level in more than five years. The Bloomberg Consumer
Comfort Index was recorded at -28.9 compared to a -29.9 in the
previous week. The buying climate gauge also improved to -32.5,
the best reading since November 2007. The improvement in consumer
sentiment is attributable to high income from an improving
housing market, better-than-expected corporate gains and an
improving job scenario.
Investors also welcomed a move made by the ECB to reduce key
interest rates. This is the first rate-cut since July 2012. This
move was made with an intention to improve the health of the
ailing Euro economy. ECB reduced the refinancing rate by 25 basis
points to 0.5%. Commenting on the security of the banking system,
Mario Draghi, the President of the European Central Bank said,
"The fixed rate full allotment will basically represent liquidity
insurance for the banking system, so frankly, there can't be
fears of lack of funding for not lending." He further added: "In
other words, this is a kind of measure that benefits all
On the earnings front, shares of General Motors Company (NYSE:
) increased 3.3% after reporting better-than-expected earnings.
The company's business improved in North America while in Europe
it registered losses smaller than the Street's expectations.
Of the top ten S&P 500 industry groups, energy stocks
gained the most. The Energy Select Sector SPDR (XLE) gained 1.3%.
Stocks such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Hess Corp. (NYSE:
), Occidental Petroleum Corporation (NYSE:
) and Marathon Petroleum Corp (NYSE:
) gained 1.3%, 1.5%, 2.1%, 0.6% and 3.2%, respectively.
Utilities shares were the only loser among the top ten S&P
500 industry groups. The Utilities SPDR (XLU) lost 0.1%. Shares
such as Duke Energy Corp (NYSE:
), the Southern Company (NYSE:
), Dominion Resources, Inc. (NYSE:
), NRG Energy Inc. (NYSE:
) and Xcel Energy Inc. (NYSE:
) declined 0.2%, 0.2%, 0.1%, 1.6% and 0.3%, respectively.
CHEVRON CORP (CVX): Free Stock Analysis
DOMINION RES VA (D): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
GENERAL MOTORS (GM): Free Stock Analysis
HESS CORP (HES): Free Stock Analysis Report
MARATHON PETROL (MPC): Free Stock Analysis
NRG ENERGY INC (NRG): Free Stock Analysis
OCCIDENTAL PET (OXY): Free Stock Analysis
SOUTHN COMPANY (SO): Free Stock Analysis
XCEL ENERGY INC (XEL): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.