Benchmarks managed to eke out gains on the back of a target
price upgrade for a major technology company. However, there was
a lull in trading as investors continued to await the Federal
Reserve's decision on tapering of the bond purchase program. A
bunch of mixed economic reports were released on Friday. Of the
top ten S&P 500 industry groups, consumer staples stocks
gained the most. Energy stocks were the only losers.
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.5% to close the
day at 15,376.06 The S&P 500 increased 0.3% to finish
Friday's trading session at 1,687.99. The tech-laden Nasdaq
Composite Index rose 0.2% to end at 3722.18. The fear-gauge CBOE
Volatility Index (VIX) declined 0.9% to settle at 14.16.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5 billion shares, below
2013's average of 6.24 billion shares. Advancing stocks
outnumbered the decliners. For 36% shares that declined, 61%
Last week, the Dow posted its best week since January. The Dow,
S&P 500 and Nasdaq has increased 3%, 2% and 1.7%,
respectively for the week. Benchmarks were battered last month
due to fears that the US would launch a military strike on Syria.
However, these fears evaporated after Russia proposed a deal
which entailed that Syria would have to surrender its chemical
weapons to avoid a military intervention. Last week, investor
confidence was also boosted after China released a couple of
positive economic indicators.
Investors have turned their attention towards the Federal
Reserve's two day policy meeting. Investors expect that in light
of below than expected performance of economic indicators in the
third quarter, the $85 billion bond purchase program might be
reduced by only $10 billion.
A couple of domestic reports were released on Friday. According
to the US Department of Commerce, retail sales for the month of
August increased marginally, by 0.2% compared to the consensus
estimate of 0.4%. Slowing of retail sales is a sign of sluggish
economic growth. Strong demand was seen in automobiles,
electronics, appliances and furniture. However, slow demand was
witnessed in sporting goods, building materials and clothing. In
spite of the tepid growth in retail sales, consumer spending was
up for the fifth month in a row. Increase in retail sales were
led by a 0.9% increase in auto dealerships. However, clothing
store receipts decreased 0.8% while building materials and garden
equipment fell 0.9%.
According to the US Department of Labor, the US Producer Price
Index for the month of August increased 0.3% compared to the
consensus estimate. of 0.2%. Increase in the producer price index
is mainly attributable to an increase in gasoline costs. Gasoline
costs rose by 2.6%. The increase in the PPI index is also
attributable to an increase in food prices. On the other hand,
passenger car prices and light truck prices declined 0.5% and
The Thomson Reuters/University of Michigan's Consumer Sentiment
Index for September came in 76.8 compared to August's reading of
82.1. The decline in consumer sentiment is attributable to the
wariness of Americans who expect that an increase in interest
rates will dampen the housing market.
Consumer staples stocks gained the most among the top ten S&P
500 industry groups. Consumer Staples Select Sect. SPDR (XLP)
gained 0.8%. Stocks such as the Procter & Gamble Company
), the Coca-Cola Company (NYSE:
), Philip Morris International Inc. (NYSE:
), Wal-Mart Stores, Inc. (NYSE:
) and CVS Caremark Corporation (NYSE:
) gained 1.0%, 0.7%, 1.7%, 0.6% and 0.7%, respectively.
Energy stocks were the only losers among the top ten S&P 500
industry groups. The Energy Select Sector SPDR (XLE) lost 0.1%.
Stocks such as Occidental Petroleum Corporation (NYSE:
), Devon Energy Corp (NYSE:
), EOG Resources Inc (NYSE:
), Marathon Oil Corporation (NYSE:
) and Apache Corporation (NYSE:
) lost 1.7%, 0.9%, 0.9%, 1.1% and 0.5%, respectively.
APACHE CORP (APA): Free Stock Analysis Report
CVS CAREMARK CP (CVS): Free Stock Analysis
DEVON ENERGY (DVN): Free Stock Analysis
EOG RES INC (EOG): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
MARATHON OIL CP (MRO): Free Stock Analysis
OCCIDENTAL PET (OXY): Free Stock Analysis
PROCTER & GAMBL (PG): Free Stock Analysis
PHILIP MORRIS (PM): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
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