Benchmarks ended mixed as Monday's trading session was largely
dominated by encouraging developments in the corporate arena.
Meanwhile, weak employment figures from China, released on Monday,
added to investor apprehensions over a global economic recovery. Of
the top ten S&P 500 industry groups, financial stocks led the
gains while the utilities sector suffered the most.
The Dow Jones Industrial Average (DJI) decreased 0.03% to close
the day at 14,968.89. The S&P 500 gained 0.2% to finish
yesterday's trading session at 1,617.50. The tech-laden Nasdaq
Composite Index rose 0.4% to end at 3,392.97. The fear-gauge CBOE
Volatility Index (VIX) lost 1.5% to settle at 12.66. Consolidated
volumes on the New York Stock Exchange, American Stock Exchange and
Nasdaq were roughly 5.3 billion shares, well below 2013's average
of 6.36 billion shares. Advancing stocks outnumbered the decliners.
For the 57% that advanced, 40% declined.
The S&P 500 inched up from yesterday's 1600-level and closed
at a record high. The Dow Jones, the S&P 500 and the Nasdaq
have increased 14%, 13% and 13% respectively since the start of
2013. In the first quarter of 2013, the rally was largely dominated
by robust corporate results, encouraging economic data and the
Federal Reserve's steps to keep interest rates low using monetary
stimulus. Investor sentiment improved due to expectations of a
global recovery. But in the second quarter, mixed economic reports
and mediocre corporate results have gradually dampened expectations
of a global economic recovery. Alarming economic conditions in
Europe and discouraging numbers from China have added to investors'
On the international front, the HSBC services Purchasing
Managers' Index (PMI) for China fell to 51.1 in April from previous
month's 54.3. This data was followed by news of a decrease in
staffing in the service sector for the first time in more than four
years. New business orders fell to a 20-month low of 51.5 while the
employment sub-index fell to 49.6 in April. The decrease in
employment is attributable to downsizing and resignation of
employees. These developments came in a week after a report
indicated sluggish manufacturing growth in China. In the first
quarter of 2013, China's GDP was 7.7% compared to previous year's
figure of 7.9%. During that period, the country's GDP fell owing to
slow investments and a decrease in factory orders. These economic
reports together indicate that a bumpy road awaits China on its
path of economic recovery.
On the earnings front, Berkshire Hathaway Inc. (NYSE:BRK.A)
gained 1.3% after its earnings and revenue beat the Street's
expectations. Earnings of the company surged 50.5% while the
revenue of the company increased 15%. The company's revenue of
$43.87 billion was well ahead of analyst expectations of $42.21
billion. Earnings per share of $2,302 beat the Street's
expectations of an EPS of $1,995.50 a share.
Of the top ten S&P 500 industry groups, financial stocks
gained the most. The Financial Select Sector SPDR (XLF) gained
1.1%. Stocks such as Bank of America Corp (NYSE: BAC ), Citigroup Inc.
(NYSE: C ), JPMorgan
Chase & Co. (NYSE: JPM ), Wells Fargo
& Co. (NYSE: WFC
) and Goldman Sachs Group, Inc. (NYSE: GS ) increased 5.2%,
1.1%, 1.3%, 0.4% and 2.1%, respectively.
Utilities shares suffered the most for the third consecutive
trading day. The Utilities SPDR (XLU) lost 1.4%. Shares such as
Duke Energy Corp (NYSE: DUK ), Dominion
Resources, Inc. (NYSE: D ), Xcel Energy Inc.
(NYSE: XEL ),
American Electric Power Company, Inc. (NYSE: AEP ) and PPL
Corporation (NYSE: PPL ) declined 2.1%,
0.7%, 1.6%, 1.2% and 2.3%, respectively.AMER ELEC PWR (AEP): Free Stock Analysis ReportBANK OF AMER CP (BAC): Free Stock Analysis
ReportBERKSHIRE HTH-A (BRK.A): Free Stock Analysis
ReportCITIGROUP INC (C): Free Stock Analysis ReportDOMINION RES VA (D): Free Stock Analysis ReportDUKE ENERGY CP (DUK): Free Stock Analysis
ReportGOLDMAN SACHS (GS): Free Stock Analysis ReportJPMORGAN CHASE (JPM): Free Stock Analysis
ReportPPL CORP (PPL): Free Stock Analysis ReportWELLS FARGO-NEW (WFC): Free Stock Analysis
ReportXCEL ENERGY INC (XEL): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment