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U.S. Stocks Fluctuate on Manufacturing, Housing Reports

*from, May 16, 2013 (To view original article click here.)

Take Away #1: U.S. stocks fluctuated between gains and losses, after the S&P 500 Index extended a record yesterday, as housing starts and manufacturing in the Philadelphia area slumped and jobless claims rose.

Key Facts and Figures:

  • The S&P 500 fell 0.1% to 1,656.98 at 1:25 p.m in New York.
  • The Dow Jones Industrial Average added 1.87 points, or less than 0.1%, to 15,277.16.
  • Trading of S&P 500 stocks was 11% higher than the 30-day average at this time of day.
  • “Today’s disappointing economic reports will set the tone,” Chad Morganlander fund manager at Stifel Nicolaus & Co.
  • “The U.S. economy is still struggling with lackluster growth and the recovery is far from self-sustaining, so equity markets are looking for guidance from central banks for their liquidity high,” said Morganlander.

Take Away #2: Equities jumped 0.5% yesterday as data showing weakness in manufacturing fueled bets the Federal Reserve will be in no hurry to scale back stimulus.

Key Facts and Figures:

  • Fed Chairman Ben Bernanke has said he would continue unprecedented stimulus until the jobless rate falls to 6.5% of inflation rises above 2.5%.
  • Jobless claims jumped by 32,000 to 360,000 in the week ended May 11, exceeding all forecasts in a Bloomberg survey of economists and the most since the end of March, Labor Dept. figures showed today.
  • Housing starts slumped 16.5% in April, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March, the Commerce Department reported.
  • Manufacturing in the Philadelphia region unexpectedly contracted in May for the first time in three months as new orders retreated and factories cut back on employment and hours.
  • Another report showed the cost of living in the U.S. fell in April for a second month, the first back-to-back declines in inflation since late 2008, as fuel prices retreated.

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 rally has pushed 193 stocks in the S&P 500, or 39% of the index, to their highest levels in at least 52 weeks as of yesterday.
  • That is the most in Bloomberg data going back to 1993.
  • The Chicago Board Options Exchange Volatility Index, or VIX, rose 0.6% to 12.89.
  • The equity volatility gauge, which moves in the opposite direction of the S&P 500 about 80% of the time, has slipped 29% this year.

Take Away 4: Nine out of 10 groups in the S&P 500 retreated today, with healthcare shares dropping 0.8%.

Key Facts and Figures:

  • Wal-Mart fell 2.1% to $78.17.
  • CEO Mike Duke has cut prices on groceries and other necessities as the chain’s lower-income shoppers deal with elevated unemployment and increased Social Security taxes.
  • First-quarter sales at U.S. Wal-Mart stores open at least fell 1.4%, the first drop after six straight gains.
  • Analysts estimated a 0.1% decline.
  • Wal-Mart forecast second-quarter profit will be $1.22 to $1.27 a share, while analysts had projected $1.29, the average of 24 estimates compiled by Bloomberg.
  • Advanced Micro Devices Inc., which makes semiconductors, slip 13% to $3.80.
  • The stock has surged 58% since April 15, sparked by Sony Corp.’s decision to use AMD chips for the next version of its PlayStation console.
  • Technology shares rallied 1.1% as a group, with Cisco Systems surging 12% to $23.78.
  • Cisco is benefitting as companies step up investments in data-traffic networks to accommodate users who are increasingly relying on smartphones and tablets to watch video and surf the Web.
  • Tesla Motors (TSLA) gained 7.2% to $90.91.
  • The company said in a U.S. regulatory filing that it will use the proceeds from selling 2.7 million shares, valued at $229 million at yesterday’s closing price, and $450 million in convertible senior notes due in 2018, to pay off a federal loan and fund other operations.
  • Kohl’s Corp. soared 4.8% to $52.04, the highest since November.
  • The third-largest U.S. department-store chain reported first-quarter profit of 66 cents a share, while analysts surveyed by Bloomberg had estimated 57 cents on average.

*To view original article from click here.

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