Stock Market News for June 02, 2014 - Market News

Benchmarks ended Friday's trading session little changed following mixed economic reports. While reports on personal income and Chicago PMI numbers were positive, personal consumption expenditure dropped in April for the first time this year. The Nasdaq ended in the red due to declines in tech-bellwethers and bio-tech stocks. However, benchmarks ended in the green for the week and posted their biggest monthly gains since February.

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The Dow Jones Industrial Average (DJI) gained 0.1% to close Friday's trading session at 16,717.17. The Standard & Poor 500 (S&P 500) went up 0.2% to finish at 1,923.57. The tech-laden Nasdaq Composite Index dropped 0.1% to 4,242.62. The fear-gauge CBOE Volatility Index (VIX) dropped 1.5% to settle at 11.40. Total volume on the New York Stock Exchange was 3.2 billion shares. Advancers outpaced declining stocks on the NYSE. For 49% stocks that advanced, 47% declined.

Markets received mixed economic data on Friday. According to the Bureau of Economic Analysis, personal income increased 0.3% in April, in line with the consensus estimate. This rise in personal income came after it had increased 0.5% in March. However, personal consumption expenditure decreased 0.1% in April, in contrast to the consensus estimate of an increase by 0.2%. Personal consumption expenditure rose 1.0% in March.

Separately, Chicago PMI numbers were encouraging. The Institute for Supply Management-Chicago noted that Chicago Business Barometer increased to 65.5 in May from April's reading of 63.0. This rise in the Chicago Purchasing Managers Index in May was in contrast to the consensus estimate of a decrease to 60.5. This increase in the Chicago PMI numbers was the highest since October 2013.

The University of Michigan and Thomson Reuters' reading of consumer sentiment was at 81.9 in May. This was less than the consensus forecast of an increase to 82.5. Earlier, the preliminary reading of consumer sentiment was at 81.8 in May.

Mixed economic data kept the gains in check while the Nasdaq ended in negative territory following a decline in technology bellwethers. Stocks such as Apple Inc. (NASDAQ: AAPL ), Cisco Systems, Inc. (NASDAQ: CSCO ) and Oracle Corporation (NYSE: ORCL ) decreased 0.4%, 0.2% and 0.4%, respectively.

Bio-tech stocks also had a negative impact on the Nasdaq. Stocks such as Gilead Sciences Inc. (NASDAQ: GILD ), Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX ), Biogen Idec Inc. (NASDAQ: BIIB ) and Celgene Corporation (NASDAQ: CELG ) decreased 1.1%, 0.8%, 0.2% and 0.2%, respectively.

Benchmarks closed in the green during the holiday-shortened week. The S&P 500, the Dow and the Nasdaq gained 1.2%, 0.7% and 1.4%, respectively.

Merger and acquisition activity in the food industry, better-than-expected initial claims and expectations that ECB will reduce key lending rates drove benchmarks higher for the week. A new deal between The Hillshire Brands Company (NYSE: HSH ) and Pilgrim's Pride Corporation (NASDAQ: PPC ) also added to the bullish sentiment. Encouraging economic numbers on manufactured durable goods, improved consumer confidence and an increase in the leading measure of U.S. home prices also lifted investor sentiment.

On Tuesday, the Nasdaq reached its highest level in almost eight weeks boosted primarily by gains in the technology sector. Friday's gains helped the S&P 500 close at a record high for the 14th time this year.

Overall, investors chose to focus on the positives rather than on GDP data that showed the economy contracted in the first quarter.

Benchmarks also recorded their best monthly gains since February. The S&P 500, the Dow and the Nasdaq gained 2.1%, 0.8% and 3.1%, respectively. May's gains helped the Nasdaq and the blue-chip index turn positive for the year.

Gains in small-cap and high-growth stocks drove benchmarks higher for the month. Additionally, gains in consumer discretionary and energy stocks helped benchmarks finish in the green. The Nasdaq was boosted primarily by gains in bio-tech stocks. A new deal between Keurig Green Mountain and Coca-Cola also provided optimism.

Federal Open Market Committee's (FOMC) indication that central bank will remain flexible when it comes to raising short term interest rates also boosted investor sentiment. Additionally, Federal Reserve Chairwoman Janet Yellen's indicated key lending rates would remain low. Russian President Vladimir Putin's willingness to discuss measures to ease the Ukrainian crisis and dovish comments from ECB President Mario Draghi were some of the other positives for the month.

Most economic indicators were on the positive side during May. This includes small-business sentiment, ISM Services Index and initial claims numbers. March's retail sales data was revised upwards, adding to the optimism.

Coming back to Friday, 6 out of 10 sectors of the S&P 500 ended in the green. The Consumer Staples Select Sector SPDR (NYSE: XLP ) led the advance as the sector gained 0.8%. Top holdings from the sector such as The Procter & Gamble Company (NYSE: PG ), The Coca-Cola Company (NYSE: KO ), Philip Morris International, Inc. (NYSE: PM ), Wal-Mart Stores Inc. (NYSE: WMT ) and CVS Caremark Corporation (NYSE: CVS ) increased 0.5%, 0.6%, 0.2%, 1.0% and 0.9%, respectively.

The Utilities sector followed the Consumer Staples sector. The Utilities Select Sector SPDR (NYSE: XLU ) advanced 0.7%. Key stocks from the sector such as Duke Energy Corporation (NYSE: DUK ), NextEra Energy, Inc. (NYSE: NEE ), Dominion Resources, Inc. (NYSE: D ), Southern Company (NYSE: SO ) and Exelon Corporation (NYSE: EXC ) increased 0.2%, 0.8%, 0.6%, 0.6% and 2.1%, respectively.

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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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