Better-than-expected data from the job market and the service
sector lifted the benchmarks yesterday. However, shares of
Hewlett-Packard plunged to their lowest level since November 2002
after the company announced a discouraging earnings forecast. H-P's
shares were the biggest laggard among the Dow components and also
somewhat eroded the broader markets' gains.
The Dow Jones Industrial Average (DJI) gained 0.1% to end at
13,494.61. The Standard & Poor 500 (S&P 500) rose 0.4% to
finish yesterday's trading session at 1,450.99. The tech-laden
Nasdaq Composite Index moved up 0.5% to close at 3,135.23. The
fear-gauge CBOE Volatility Index (VIX) declined 1.8% to settle at
15.43. Consolidated volumes on the New York Stock Exchange,
American Stock Exchange and the Nasdaq were roughly 6.2 billion
shares, lower than the daily average volume of 6.38 billion.
Advancers and the declining stocks on the New York Stock Exchange
were at par, both coming in at 47%.
Meanwhile, Automatic Data Processing (NASDAQ:
) revealed in its National Employment Report that US companies
added 162,000 jobs in September, higher than the expected 143,000
jobs. According to the report: "Employment in the U.S. nonfarm
private business sector increased by 162,000 from August to
September, on a seasonally adjusted basis. The estimated gains in
previous months were revised lower: The July increase was reduced
by 17,000 to an increase of 156,000, while the August increase was
reduced by 12,000 to an increase of 189,000".
Separately, the Institute for Supply Management released its
data on economic activity in the nonmanufacturing sector. According
to the report: "The NMI registered 55.1 percent in September, 1.4
percentage points higher than the 53.7 percent registered in
August. This indicates continued growth this month at a faster rate
in the non-manufacturing sector". This is higher than consensus
estimates of a reading of 53.6. The index also registered its
highest level since March 2012.
Through this week, investors have received a couple of positive
economic readings. On Monday, the Institute for Supply Management
(ISM) said economic activity in the manufacturing sector had
expanded for the first time since May. An increase in new orders
and employment drove the manufacturing sector higher in September.
A day later real estate data provider Corelogic Inc. (NYSE:
) reported that U.S. home prices rose for the sixth consecutive
month in August. The company's home price index increased 0.3% in
August from the prior month.
Meanwhile, Hewlett-Packard Company's (NYSE:
) CEO Meg Whitman announced that company was lowering its earnings
forecast for fiscal 2013. The announcement dragged the company's
share price to a nine year low. Whitman further added that except
software, earnings from all other businesses might fall. H-P's
shares plunged 13% to close at $14.91 yesterday. The company
anticipates adjusted earnings in the range of $3.40 to $3.60 per
share for fiscal 2013.
Coming to the sectors, energy was a major loser yesterday due to
a fall in crude oil prices. The Energy Select Sector SPDR (XLE)
plunged 1.2%. Among the stocks, Occidental Petroleum Corporation
), Marathon Oil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Schlumberger Limited. (NYSE:
) and ConocoPhillips (NYSE:
) plunged 1.7%, 1.6%, 1.5%, 1.5% and 1.0%, respectively.
AUTOMATIC DATA (ADP): Free Stock Analysis
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CONOCOPHILLIPS (COP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
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SCHLUMBERGER LT (SLB): Free Stock Analysis
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