Benchmarks ended Thursday's choppy trading session slightly lower following mixed economic data and Fed officials comments on interest rate hike. Upbeat earnings results, well received initial public offerings and rise in oil prices failed to help benchmarks close in the green. While, about two third of the Dow components ended in the red, seven out of ten sectors of the S&P 500 finished in negative territory.
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The Dow Jones Industrial Average (DJI) declined a meager 0.04%, to close at 18,105.77. The Standard & Poor's 500 (S&P 500) decreased 0.1% to 2,104.99. The tech-laden Nasdaq Composite Index closed at 5,007.79; losing almost 0.1%. The fear-gauge CBOE Volatility Index (VIX) dropped 1.9% to settle at 12.60. A total of about 3.4 billion shares were traded on NYSE on Thursday. Decliners outpaced advancing stocks on the NYSE. For 54% stocks that declined, 42% advanced.
Benchmarks finished modestly lower on Thursday amid a mixed bag of economic data. While, housing data was weaker than expected, manufacturing report turned out to be better than anticipated. The U.S. Department of Commerce reported that privately-owned housing starts gained 2% to 926,000 in March from February's revised tally of 908,000. However, this increase in housing starts was way behind the consensus estimate of rise to 1,042,000. Separately, building permits decreased at a rate of 5.7% in March to 1,039,000, more than the consensus estimate of a decrease to 1,093,000.
On the other hand, the Philadelphia Federal Reserve's manufacturing index increased to 7.5 in April from 5 in March. However, demand for manufactured goods as measured by current new orders index slipped to 0.7 in April from March's reading of 3.9.
Separately, claims for unemployment benefits reached the highest level in six weeks during the second week of April. The U.S Department of Labor reported that seasonally adjusted initial claims increased 12,000 to 294,000 in the week ending Apr 11. This rise was in contrast to the consensus estimate of initial claims decreasing to 278,000.
Federal Reserve officials' remarks on rate hike also weighed slightly on the broader markets. Atlanta Fed President Dennis Lockhart said Fed should wait before raising interest rates as economic conditions in the first quarter have been soft and "murky". Boston Fed President Eric Rosengren also believes that economic data needs to improve before a rate hike takes place. Lastly, Federal Reserve Vice Chairman Stanley Fischer said the U.S. economy is rebounding from a weak first quarter but "we'll see at what speed it proceeds" before hiking rates.
A flurry of positive earnings reports failed to lift the markets. Shares of Citigroup Inc. ( C ) gained 1.2% after the company reported first quarter earnings per share of $1.52, more than the Zacks Consensus Estimate of $1.39.
Another financial behemoth, Goldman Sachs Group Inc ( GS ) posted first quarter earnings per share of $5.94 that beat the Zacks Consensus Estimate of $4.18. BlackRock, Inc. ( BLK ) also reported first quarter earnings per share of $4.89, beating the Zacks Consensus Estimate of $4.51. However, shares of both Goldman Sachs and BlackRock dropped 0.4% and 1.2%, respectively.
UnitedHealth Group Inc.'s ( UNH ) shares gained 3.7% after company's first quarter earnings per share of $1.46 turned out to be more than the Zacks Consensus Estimate of $1.33. UnitedHealth's improvement in earnings came on the back of higher revenues. Revenues of $35.8 billion were ahead of the Zacks Consensus Estimate of $34.7 billion. Shares of UnitedHealth advanced 3.7%.
Separately, shares of Netflix, Inc. ( NFLX ) soared 18.2% after the company added 4.88 million subscribers in the first quarter, more than the company's previous forecast of 4.05 million. Strong subscriber growth helped Netflix post first quarter earnings per share of 77 cents, more than the Zacks Consensus Estimate of 67 cents.
Among other positive news, a trio of stocks including Etsy Inc., Party City Holdco Inc. and Virtu Financial Inc. saw double digit gains in their initial public offerings. Shares of Etsy, Party City Holdco and Virtu Financial surged 87.5%, 21.8% and 16.7%, respectively.
Meanwhile, oil prices gained on Thursday following news that tribal forces have taken control of major oil terminals in Yemen. The turmoil in Yemen is expected to put a lot of pressure on supply levels. Prices of WTI crude oil and Brent crude oil increased 0.6% and 0.1% to $56.71 per barrel and $60.40 a barrel, respectively. However, the rise in oil prices failed to boost energy shares. Dow components, Chevron Corporation ( CVX ) and Exxon Mobil Corporation ( XOM ) declined 0.2% and 0.4%, respectively. Overall, the Energy Select Sector SPDR (XLE) decreased 0.2%.
The SPDR S&P Homebuilders ETF (XHB) dropped 1.8%, the highest among the S&P 500 sectors. 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 ) decreased 3.6%, 1.7%, 2.6%, 3.1% and 0.1%, respectively.
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