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U.S. Stocks Rise on Stimulus Bets as Manufacturing Falls

*from, May 15, 2013 (To view original article click here.)

Take Away #1: U.S. stocks rose, erasing earlier losses for benchmark indexes, as data showing weakness in manufacturing fueled bets the Federal Reserve will be in no hurry to scale back stimulus.

Key Facts and Figures:

  • The S&P 500 rose 0.5% to 1,658.34 at 1:37 p.m.
  • The benchmark gauge fell as much as 0.2% earlier in the session.
  • The Dow Jones Industrial Average added 55.91 points, or 0.4%, to 15,271.16., an all-time high.
  • Trading of S&P 500 stocks was in line with the 30-day average at this time of day.
  • “The global economic outlook gives some support to the idea that more easing is on its way, especially with soft inflation,” Oliver Pursche, co-manager of the GMG Defensive Beta Fund and president of Gary Goldberg Financial Services said.
  • “It would be surprising if there was a meaningful and prolonged pullback at this point,” said Pursche.
  • The central bank’s policy makers debated at their April 30-May 1 meeting whether to expand or curb the pace of stimulus.
  • They said they’re prepared to increase the $85 billion monthly rate of bond buying in response to changes in the labor market or inflation.

Take Away #2: U.S. industrial production declined in April by the most in eight months, reflecting broad-based cutbacks in factory output.

Key Facts and Figures:

  • Manufacturing in the New York region unexpectedly shrank in May as factories received fewer orders and sales stagnated.
  • Data from the Labor Department showed wholesale prices dropped in April by the most in three years, reflecting a decrease in fuel costs that is helping underpin profits.
  • The euro-area economy shrank 0.2% in the first quarter after a 0.6% decline in the previous three months.
  • Bank of England Governor Mervyn King declared that a U.K. recovery is “in sight”.

Take Away #3: The U.S. bull market entered its fifth year.

Key Facts and Figures:

  • The S&P 500 has surged 145% from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases from the Federal Reserve.
  • The Chicago Board Options Exchange Volatility Index, or VIX, rose 3.7% to 13.24.
  • The benchmark gauge for options, which moves in the opposite direction of the S&P 500 about 80% of the time, rose with the equity gauge for the second straight day.

Take Away 4: Eight of the 10 groups in the S&P 500 advanced.

Key Facts and Figures:

  • Shares in companies that make food, beverages and household products jumped 1%, putting the S&P 500 Consumer Staples Index on track to close at an all-time high.
  • Procter & Gamble Co. added 1.7% to $80.79.
  • Indexes tracking consumer-discretionary and health-care stocks also headed for record closes.
  • Bank shares rose 0.8% as a group, with the S&P 500 Financials Index on pace for its highest close since Oct.1, 2008.
  • JPMorgan Chase climbed 1.8 percent to $51.28, the highest since June 2007, and American Express Co. added 1.6 percent to a record $72.68.
  • About 91% of the S&P 500 stocks traded above their average prices from the past 50 days as of yesterday.
  • That is approaching the two-year high of 93% reached in January.

Take Away #5: Macy’s, Netflix, and Google surge.

Key Facts and Figures:

  • Macy’s, the second-largest U.S. department-store chain, added 2.6% to $48.63.
  • Macy’s reported fiscal first-quarter profit that beat analysts’ estimates and increased its share buyback program by $1.5 billion.
  • Netflix Inc., the world’s largest subscription video service, extended gains for a sixth day, rising 3.8% to $242.83, the highest since August 2011.
  • Netflix’s streaming of the revived show “Arrested Development” is likely to have a larger impact on second-quarter gross additions than new series like “House of Cards” did in the previous three months, said BTIG analyst Richard Greenfield.
  • Google Inc. rose 2.2% to a record $906.58, extending its rally to 18% since reporting earnings April 18.
  • The company introduced a subscription music-streaming service, one of several product updates to be unveiled at a developer meeting this week.

Take Away 6: Energy shares fell 0.5% as oil headed for a fifth straight day of losses on lower fuel consumption data.

Key Facts and Figures:

  • Chevron Corp. dropped 1.3% to $123.33.
  • Deere declined 4.6% to $89.43 as the company cut its full-year equipment sales forecast, citing global financial “pressures” and cold, wet weather that has delayed crop planting in the U.S.

Take Away #7: ExOne and Computer Sciences Corp. decline.

Key Facts and Figures:

  • ExOne, the maker of 3D printers, sank 13% to $42.20.
  • ExOne reported a first-quarter loss per share of 20 cents, wider than the estimate for a loss of 8 cents per share.
  • The shares have still more than doubled since the company sold stock at $18 in an initial public offering in February.
  • Computer Sciences Corp. dropped 11% to 43.88 for the biggest loss in the S&P 500.
  • The technology consultant for governments and companies reported fourth-quarter revenue that fell short of analyst estimates.

*To view original article from click here.

Filed in: Latest, Markets

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