Benchmarks closed in the green yesterday propelled by
better-than-expected housing data. This was the third-consecutive
trading day that the markets secured a seat in the positive zone.
However, disappointing earnings results from certain tech
bellwethers eroded some of the day's gains. The housing and
energy sectors were the leading gainers among the S&P 500
The Dow Jones Industrial Average (DJI) rose 0.04% to close the
day at 13,557. The Standard & Poor 500 (S&P 500) climbed
0.4% to finish yesterday's trading session at 1,460.91. The
tech-laden Nasdaq Composite Index added 0.1% to end at 3,104.12.
The fear-gauge CBOE Volatility Index (VIX) declined 1.0% to
settle at 15.07. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.3
billion shares, slightly lower than the year-on-year daily
average of 6.51 billion shares. For every two stocks that gained
on the NYSE, one closed in the red.
The big news for the day was the sharp increase in housing
starts. A report from the U.S. Census Bureau and the Department
of Housing and Urban Development revealed that privately owned
housing starts increased by 15.0% from August to an annual rate
of 872, 000 in September. This was well above consensus estimates
of 769,000. Housing starts recorded the quickest pace of increase
since July 2008. In addition, single family housing starts
increased by 11.0% from August to 603,000. The data also revealed
that building permits for privately-owned housing units had
jumped 11.6% from August to a seasonally adjusted annual rate of
894,000 in September. Single-family authorizations came in at
545,000 in September, up 6.7% from August.
The unexpected increase in housing starts provided a boost to
the housing sector. The SPDR S&P Homebuilders gained 1.9%
after the report. Stocks such as PulteGroup, Inc. (NYSE:
), The Ryland Group, Inc. (NYSE:
), KB Home (NYSE:
), Beazer Homes USA, Inc and M.D.C. Holdings, Inc.
jumped 5.3%, 4.1%, 8.7%, 5.4% and 2.7%, respectively.
Meanwhile, shares of technology bellwethers Intel Corporation
) and International Business Machines Corp. (NYSE:
) tumbled following disappointing earnings results. IBM's shares
tumbled 4.5% after a dull third quarter. Earnings came in line,
but revenues fell short of the estimates. Revenues also declined
5.4% from the year-ago quarter and all of the company's operating
segments suffered a downtrend. On the other hand, Intel, the
world's largest chip maker, lost 2.5% after providing a weak
revenue outlook. Intel also said that sales of personal computer
will remain low during the holiday season.
Disappointing earnings results dragged the technology sector
into the red. The technology SPDR lost 0.5% yesterday. Stocks
such as Oracle Corporation (NASDAQ:
), Cisco Systems, Inc. (NASDAQ:
), Juniper Networks, Inc., Polycom Inc and Dell Inc (NASDAQ:
) lost 2.0. %, 0.8%, 1.0%, 1.3% and 0.5%, respectively.
Meanwhile, financial companies reported a mixed set of
earnings yesterday. Bank of America Corp (NYSE:
), the second largest U.S. bank, reported lower-than-expected
results. However, The Bank of New York Mellon Corporation (NYSE:
) and U.S. Bancorp (NYSE:
) came out with better-than-expected quarterly figures. On the
other hand, American Express Company's (NYSE:
) profits rose marginally and were in line with estimates.
The financial sector finished in the green and the Financial
Select Sector SPDR rose 1.2%. Stocks such as Bank of New York
Mellon, Wells Fargo & Company, Morgan Stanley (NYSE:
), Goldman Sachs Group, Inc. (NYSE:
) and U.S. Bancorp jumped 5.5%, 2.2%, 3.5%, 1.4% and 1.8%,
The energy sector also garnered decent gains yesterday and the
Energy Select Sector SPDR rose 1.2%. Stock such as Exxon Mobil
), Chevron Corporation (NYSE:
), TOTAL S.A., BP plc (NYSE:
) and Marathon Oil Corporation rose 1.1%, 1.0%, 1.5%, 2.9% and
On the international front, investors awaited the GDP report
from the world's second-largest economy, China According to
market experts, the county's economic growth has started to
stabilize with an improvement in housing starts, retail sales,
manufacturing indices and construction machinery sales.
AMER EXPRESS CO (AXP): Free Stock Analysis
BANK OF AMER CP (BAC): Free Stock Analysis
BANK OF NY MELL (BK): Free Stock Analysis
BP PLC (BP): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
DELL INC (DELL): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis
INTEL CORP (INTC): Free Stock Analysis Report
KB HOME (KBH): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
US BANCORP (USB): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.