The Dow Jones and S&P 500 bolstered gains after former
Treasury Secretary Lawrence Summers withdrew his name for
consideration to succeed Federal Reserve chairman Ben Bernanke.
The Nasdaq, however, was pulled marginally into the red due to
the poor response for the new products launched by Apple Inc.
Meanwhile, industrial production for the month of August came in
as per estimates. However, the New York Empire State Index fell
short of expectations. Of the top ten S&P 500 industry
groups, industrials stocks gained the most. However, technology
stocks suffered maximum losses.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.8% to close the
day at 15,494.78 The S&P 500 increased 0.6% to finish
yesterday's trading session at 1,697.6. The tech-laden Nasdaq
Composite Index declined 0.1% to end at 3,717.84. The fear-gauge
CBOE Volatility Index (VIX) increased 1.6% to settle at 14.38.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.63 billion shares, below
2013's average of 6.24 billion shares. Advancing stocks
outnumbered the decliners. For 31% shares that declined, 67%
During the early part of the trading day, benchmarks gained
nearly 1% after Lawrence Summers withdrew his candidature for the
Federal Reserve chairmanship. Investors welcomed this development
positively as Summers was in favor of tapering the bond purchase
program. With Summers withdrawal, investors believe the massive
$85 billion monthly bond purchase program might stay in place.
This decision comes at a time when the US Central bank is due to
announce its decisions on the bond purchase program. Early gains
were trimmed after US President Barack Obama reiterated that the
debt ceiling of the country would not be extended.
A couple of domestic reports were released during yesterday's
trading session. According to a report released by the Federal
Reserve System, industrial production for the month of August
grew by 0.4%. This is line with the consensus estimate.
Manufacturing production increased 0.7% compared to previous
month's drop of 0.4%. Manufacturing production increased
primarily on the back of gains in automobile assembly. Automobile
assembly grew by 5.2% compared to a drop of 4.5% last month.
Utilities output declined for the fifth month in a row while
mining production increased marginally, by 0.3%, compared to
July's reading of 2.4%.
The Empire State Manufacturing Survey Index released by the
Federal Reserve Bank of New York declined 2 points to 6.3. This
was below the consensus estimate of 9.3. Among its constituents,
the new orders index and shipments index increased to 2.4 and
16.4, respectively. Prices paid came in at 21.5 while prices
received increased to 8.6. General business conditions increased
for the third consecutive month to 40.6.
The Nasdaq ended in the red as share prices of Apple Inc.
) dropped 3.2% during yesterday's trading session. Since last
week, the share price of Apple has declined nearly 11%. This is
primarily because its new iPhones have disappointed investors.
Industrial stocks gained the most during yesterday's trading
session. The Industrials SPDR (XLI) gained 1.3%. The General
Electric Company (NYSE:
), United Technologies Corporation (NYSE:
), The Boeing Company (NYSE:
), Union Pacific Corporation (NYSE:
) and 3M Co (NYSE:
) gained 1.5%, 1.2%, 3.9%, 1.0% and 0.5%, respectively.
Technology stocks were the biggest loser among the top ten
S&P 500 industry groups. The Technology SPDR (XLK) lost 0.1%.
Stocks such as Google Inc (NASDAQ:
), Microsoft Corporation (NASDAQ:
), Hewlett-Packard Company (NYSE:
) and Intel Corporation (NASDAQ:
) declined 0.2%, 0.7%, 1.5% and 0.2%, respectively.