Stock Market News for April 06, 2015 - Market News

Benchmarks ended the holiday-shortened week on a positive note following encouraging initial claims report. Jobless claims declined to a nine-week low last month. Upbeat report on jobless claims raised hopes among investors for a positive nonfarm payrolls report that was to be released on Friday. Markets were closed on Friday for Good Friday holiday.

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The Dow Jones Industrial Average (DJI) gained 0.4%, to close at 17,763.24. The Standard & Poor's 500 (S&P 500) also increased 0.4% to 2,066.96. The tech-laden Nasdaq Composite Index closed at 4,886.94; gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) dropped 2.9% to settle at 14.67. A total of about 3 billion shares were traded on NYSE on Thursday. Advancers outpaced declining stocks on the NYSE. For 62% stocks that advanced, 35% declined.

According to the U.S. Department of Labor, initial claims declined 20,000 for the week ending Mar 28 to 268,000, lower than the consensus estimate of 288,000. Moreover, the 4-week moving average also decreased 14,750 from previous week's level to 285,500.

Retailers benefitted from the decline in initial claims as it eventually boosts consumer spending. The Consumer Discretionary Select Sector SPDR (XLY) gained 0.9%, the second highest among the S&P 500 sectors. Shares of retailers including Expedia Inc. ( EXPE ) and Macy's, Inc. ( M ) increased 4.1% and 3.7%, respectively.

Separately, the SPDR S&P Homebuilders ETF (XHB) increased 1.2% and was the biggest gainer among the S&P 500 companies. Key holdings including KB Home ( KBH ), Beazer Homes USA Inc. ( BZH ), Ryland Group Inc. ( RYL ), Toll Brothers Inc. ( TOL ) and The Home Depot, Inc. ( HD ) advanced 1.5%, 2%, 1.8%, 1.9% and 1.3%, respectively.

Energy shares also ended in positive territory, despite drop in oil prices . Crude oil prices took a beating after investors feared the agreement on Iranian nuclear deal may lead to oversupply of oil in the world market. WTI crude and Brent crude declined 1.9% and 3.9% to $49.14 per barrel and $54.95 a barrel, respectively. The Energy Select Sector SPDR (XLE) increased 0.2%. Key energy stocks such as Chevron Corporation ( CVX ) and EOG Resources, Inc. ( EOG ) gained 0.5% and 1.6%, respectively. Overall, 9 out of 10 sectors of the S&P 500 ended in the green.

Meanwhile, investors kept an eye on nonfarm payrolls report. Total non-farm payrolls account for approximately 80% of the workers who produce the entire GDP of the United States.

Coming to other economic reports, the U.S. Census Bureau reported that trade deficit declined in February to $35.4 billion from $42.7 billion in January, more than the consensus estimate of deficit of $41.2 billion. Exports decreased $3 billion in February from that in January to $186.2 billion. Exports declined due to a stronger dollar and weak global economy. Imports fell $10.2 billion from January to $221.7 billion in February, the highest month-over-month decline since the great recession. Lingering delays in shipments due to labor dispute at West Coast ports was cited to be the reason behind this sharp decline in imports.

Additionally, new orders for manufactured goods increased 0.2% in February. This was in contrast to the consensus estimate of a decrease by 0.3%. The positive reading on factory orders in February reversed a six month declining trend. Excluding transportation, orders increased to an eight month high of 0.8% in February. Shipments also reversed their declining trends and rose by 0.7%.

For the holiday-shortened week, the S&P 500 and the Dow both advanced 0.3%. However, the Nasdaq declined 0.1%. Benchmarks mostly finished in positive territory following China central bank governor's indications about additional monetary stimulus boosted investor sentiment. Deal news in the domestic healthcare sector including Catamaran Corporation ( CTRX ) and UnitedHealth Group Incorporated ( UNH ), Teva Pharmaceutical Industries Limited ( TEVA ) and Auspex Pharmaceuticals, Inc. ( ASPX ), and Horizon Pharma plc ( HZNP ) and Hyperion Therapeutics, Inc. ( HPTX ) also aided benchmarks.

Among the negatives, weak economic data adversely affected benchmarks. While, private sector job additions were weaker than expected in March, manufacturing activity in the U.S. expanded at the slowest pace in March since May 2013. Separately, continuous drop in oil prices are also putting a lot of pressure on energy companies. Weakness in healthcare and industrial shares too dragged benchmarks significantly lower on Tuesday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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