Stocks chalked up gains for the second consecutive day banking
on robust domestic auto sales numbers and encouraging news on the
economy. Yesterday's gains lifted the Dow Jones higher and the
index logged its best day in more than a month. A positive Fed
Beige Book report further lifted investor sentiment. The report
showed that the U.S. economy grew at "modest to moderate" pace in
the early part of July to late August. On the other hand, the
U.S. trade deficit increased more than expected in July. Most of
the sectors in the S&P 500 industry groups finished in the
green led by consumer discretionary, technology and financial
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 0.7% to
close the day at 14930.87. The S&P 500 added 0.8% to finish
yesterday's trading session at 1653.08. The tech-laden Nasdaq
Composite Index increased 1.0% to end at 3649.04. The fear-gauge
CBOE Volatility Index (VIX) declined 4.4% to settle at 15.88.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 6.1 billion shares, below
2013's average of 6.3 billion shares. Advancing stocks
outnumbered the decliners. For 69% shares that advanced, only 29%
In recent days, markets have received a series of encouraging
domestic reports about the U.S economy. But apart from
yesterday's strong gains, markets have not performed well due to
the situation in Syria. On Friday, the widely awaited non-farm
payrolls report is scheduled to be released. This report will
serve as an important cue regarding the path the central bank may
take with respect to the future of its massive bond buying
According to San Francisco Fed President John Williams, the Fed
should start trimming its bond buying program later this year and
should end the program by mid-2014. He also said economic growth
will increase in the second half of 2013. He believes that
inflation-adjusted gross domestic product will register a growth
of 2% and 3% in 2013 and 2014, respectively. But he doesn't
expect unemployment to touch 6.5% before the first half of 2015.
The most encouraging news of the day which lifted the major
indices higher was robust auto sales for the month of August.
August was the best month for the auto industry in terms of
sales. Vehicles sales jumped 17% in August. Sales of leading auto
makers companies like Ford Motor Company (NYSE:
) and General Motors Company (NYSE:
) jumped 12% and 15%, respectively. Toyota Motor Corporation's
) sales increased nearly 23%.
According to the Federal Reserve's Beige Book, the U.S. economy
grew at a "modest to moderate" in recent months. Eight districts
reported moderate growth while the remaining four posted modest
growth. Consumer spending increased in most of the districts due
to an increase in the demand for automobiles and housing related
goods. Manufacturing activity increased modestly.
Another important report pertaining to the home front was
released. According to the Commerce Department, U.S trade deficit
climbed 13.3% to $39.1 billion in July from the previous month's
figure of $34.5 billion. This was above the consensus estimate of
a trade deficit of $38.5 billion. Exports in the month of
July came in at $189.4 billion and imports at $228.6 billion.
The consumer discretionary sector was the biggest gainer among
the S&P 500 industry groups and the Consumer Discretionary
SPDR (XLY) gained 1.1%. Stocks such as the Home Depot, Inc.
), CBS Corporation (NYSE:
), Time Warner Inc (NYSE:
), Comcast Corporation (NASDAQ:
) and Time Warner Cable Inc (NYSE:
) added 0.3%, 2.1%, 1.0%, 0.8% and 0.6%, respectively.
CBS CORP (CBS): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
HOME DEPOT (HD): Free Stock Analysis Report
TIME WARNER CAB (TWC): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
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