Benchmarks finished mixed during yesterday's trading session
as fears of a possible US military strike on Syria retreated.
Diplomatic efforts are being carried out to make Syria surrender
its chemical weapons. Meanwhile, the new iPhone models introduced
by Apple failed to impress investors. Of the top ten S&P 500
industry groups, energy stocks gained the most. Utilities stocks
suffered maximum losses.
APPLE INC (AAPL): Free Stock Analysis Report
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to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.9% to close the
day at 15191.06. The S&P 500 added 0.7% to finish yesterday's
trading session at 1683.99. The tech-laden Nasdaq Composite Index
increased 0.6% to end at 3729.02. The fear-gauge CBOE Volatility
Index (VIX) tumbled 7.0% to settle at 14.53. Consolidated volumes
on the New York Stock Exchange, American Stock Exchange and
Nasdaq were roughly 6.5 billion shares, above 2013's average of
6.24 billion shares. Advancing stocks outnumbered the decliners.
For 64% shares that advanced, only 34% declined.
The S&P 500 clocked gains for the seventh straight day as
chances of a possible military strike on Syria retreated. These
developments boosted investor sentiment. For the past couple of
weeks, benchmarks were tilted towards losses as there was a high
chance that the US military will execute a military strike on
Syria. This happened after the government of Syria used chemical
weapons, killing around 1400 people. However, Russia has a
diplomatic solution that might prevent a possible military
strike. Russia suggested that if Syria's chemical weapons are
surrendered under international control, a military strike can be
The Nasdaq ended in negative territory after shares of Apple Inc.
) lost nearly 5.4%. Apple failed to impress investors with their
new iPhones, namely iPhone 5S and iPhone 5C. For the first time,
Apple has forayed into making a cheaper iPhone, the iPhone 5C.
However, the phone was priced well below expectations. The iPhone
5C can be bought at $99 with a 2 year contract or for $549
without contract. This would also be available in different
colors. The iPhone 5S was introduced at $199 with a contract.
Apart from other features, one feature which stands apart is the
fingerprint scanner. Last month, shares of the company had
increased 11% on anticipation of the launch of new products.
Investors are likely to pay greater attention towards the Federal
Reserve's two day policy meeting which is due to take place on
September 17 and 18. The fate of the $85 billion bond purchase
program is expected to be decided during this meeting. In light
of positive economic indicators, few policy makers have supported
the tapering of the bond purchase program while others have
chosen to wait and watch for further indicators. The massive bond
purchase program has lifted investor sentiment and benchmarks to
a whole new level. Benchmarks have gained nearly 18% owing to
these bond purchase programs.
According to the US Department of Commerce, wholesale inventories
increased marginally by 0.1%, compared to the consensus estimate
of 0.3%. Total inventories also edged up 0.1% and increased 2.2%
on a year over year basis. The inventory to sales ratio came in
at 1.17 compared to 1.21.
Energy stocks gained the most among top ten S&P 500 industry
groups. The Energy Select Sector SPDR (XLE) gained 0.8%. Stocks
such as Exxon Mobil Corporation (NYSE:
), Chevron Corporation (NYSE:
), Hess Corp. (NYSE:
), ConocoPhillips (NYSE:
) and Murphy Oil Corporation (NYSE:
) gained 1.2%, 0.7%, 0.4%, 0.7% and 0.4%, respectively.
Utilities stocks suffered maximum losses. The Utilities SPDR
(XLU) lost nearly 1.0%, Stocks such as TECO Energy, Inc. (NYSE:
), Duke Energy Corp (NYSE:
), NextEra Energy, Inc. (NYSE:
), The Southern Company (NYSE:
) and NRG Energy Inc (NYSE:
) declined 1.3%, 1.0%, 1.2%, 0.9% and 2.0%, respectively.