Benchmarks added paltry gains following a batch of mixed
earnings releases and positive domestic and international
economic data. This was only the second day this week that
benchmarks managed to register modest gains. Meanwhile, the U.S.
Labor Department said the number of American filing for
unemployment benefits has decreased. However, homebuilders stocks
had a bad run following a decline in growth of home sales last
The Dow Jones Industrial Average (DJI) rose 0.2 % to close the
day at 13,103.68. The Standard & Poor 500 (S&P 500)
gained 0.3% to finish yesterday's trading session at 1,412.97.
The tech-laden Nasdaq Composite Index edged up 0.2% to end at
2,986.12. The fear-gauge CBOE Volatility Index (VIX) dropped 1.2%
to settle at 18.12. Total volumes on the New York Stock Exchange
were roughly 3.51 billion shares. Advancing stocks outpaced the
decliners on the NYSE; as for 57% stocks that rose, 37% stocks
The street began yesterday's trading session on a positive
note thanks to positive domestic and international economic data.
The early part of trading saw the Dow climb by as much as 87
points. But the index fell in the later part of the day and
managed only modest gains at the close. Investors remained
cautious after a recent round of weak corporate earnings and
lower profit and revenue projections from many blue-chips
companies like Caterpillar Inc. (NYSE:
), 3M Co (NYSE:
) and Google In (NASDAQ:
Meanwhile, the U.S. Department of Labor released initial
claims data which revealed that initial claims decreased from the
previous week. According to the report, the advance figure for
seasonally adjusted initial claims decreased by 23,000 to 369,000
from the prior week's 392,000 for the week ending October 20.
This was below consensus estimates of 375,000.
Additionally, China's Ministry of Industry and Information
Technology said growth in factory output should pick up in the
last three months of 2012. Speaking at a news conference, Zhu
Hongren, ministry spokesman and chief engineer, said higher
output growth will help China achieve its annual growth economic
growth target of 7.5%.
Separately, most homebuilders stocks were down following news
that the speed of growth in housing sales decreased last month.
Pending home sales data released by the National Association of
Realtors revealed that September pending home sales data
increased slightly from the previous month. Pending home sales
data increased by 0.3% to 99.5 in September from 99.2 in August.
This was way below consensus estimates of 3.0. Lawrence Yun,
National Association of Realtors' chief economist said: "Home
contract activity remains at an elevated level in contrast with
recent years, but currently appears to be bouncing around in a
narrow range. This means only minor movement is likely in
near-term existing-home sales, but with positive underlying
market fundamentals they should continue on an uptrend in
As a result, The SPDR S&P Homebuilders slipped 1.2% and to
some extent eroded the broader markets' gains. Stocks such as
PulteGroup, Inc. (NYSE:
), Lennar Corporation (NYSE:
), KB Home (NYSE:
), D.R. Horton, Inc. (NYSE:
) and Meritage Homes Corporation (NYSE:
) tumbled 2.5%, 1.8%, 1.4%, 1.4% and 8.2%, respectively.
Meanwhile, the Consumer Staples sector had a couple of good
earnings. The Procter & Gamble Company (NYSE:
) reported better-than-expected results. The company's shares
surged 2.9% following the release. Procter & Gamble
maintained its key earnings forecast for the year by cutting
costs and focusing on key markets, products and countries.
Ingredion Inc (NYSE:
) shares jumped 7.9% after the company's strong quarterly
The Consumer Staples Select Sector SPDR surged 0.6% boosted by
these results. Stocks such as Revlon, Inc. (NYSE:
), Avon Products, Inc. (NYSE:
), Bunge Limited (NYSE:
) and Seaboard Corporation (NYSEAMEX:
) rose 1.1%, 0.5%, 2.8% and 1.6%, respectively.
AVON PRODS INC (AVP): Free Stock Analysis
BUNGE LTD (BG): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis
D R HORTON INC (DHI): Free Stock Analysis
GOOGLE INC-CL A (GOOG): Free Stock Analysis
INGREDION INC (INGR): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis
3M CO (MMM): Free Stock Analysis Report
MERITAGE HOMES (MTH): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
PULTE GROUP ONC (PHM): Free Stock Analysis
REVLON INC-A (REV): Free Stock Analysis
(SEB): ETF Research Reports
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