Stock Market News for May 08, 2014 - Market News

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Benchmarks ended Wednesday's trading session mostly higher following indications from Federal Reserve Chairwoman Janet Yellen that key lending rates would remain low. Market moved upwards after Russian President Vladimir Putin agreed to discuss measures to ease the Ukrainian crisis. The Dow and S&P 500 ended in the green. However, intense selling pressure in Internet stocks dragged down the Nasdaq. Separately, Whole Food's dismal quarterly results were also a big drag on the Nasdaq.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article
 
The Dow Jones Industrial Average (DJI) gained 0.7% to close Wednesday's trading session at 16,518.54. The Standard & Poor 500 (S&P 500) went up 0.6% to finish at 1,878.21. The tech-laden Nasdaq Composite Index dropped 0.3% to 4,067.67. The fear-gauge CBOE Volatility Index (VIX) dropped 2.9% to settle at 13.40. Total volume for the day was roughly 7.0 billion shares, higher than this month's average of 6.1 billion. Advancers outpaced declining stocks on the NYSE. For 63% stocks that advanced, 34% declined.
 
Federal Reserve Chairwoman Janet Yellen's assurance to provide support to the economy given the “considerable slack” in the labor market boosted investor sentiment. In her testimony before the Joint Economic Committee, Yellen reiterated that the central bank intends to keep the federal funds rate low for some time, even after employment and inflation rates return to the desired level. Yellen also acknowledged the fact that “there is no mechanical formula or time table” to hike interest rates.
 
Earlier, the Federal Open Market Committee (FOMC) had agreed during its April meeting to keep key interest rates low even after the end of the quantitative easing program in order to support the economy for some more time.
 
Russian President Vladimir Putin's willingness to ease Ukraine-Russia geopolitical tension was also welcomed by the investors. Putin called on pro-Russian separatists in eastern Ukraine to postpone the Donetsk referendum on the status of the mostly Russian-speaking region, which is scheduled to be held on May 11. Putin also stated that Russian troops were pulled back from the Ukrainian border.
 
Last Friday, Russia called for an emergency meeting of the United Nations Security Council after Ukraine's military entered Sloviansk in order to recapture a city that has been a stronghold for pro-Russian rebels. Russia described the incident as a “criminal” assault by Ukraine that has jeopardized the peace process.
 
The Nasdaq ended in the negative territory due to declines in Internet stocks. Shares of Internet information provider Yahoo! Inc. YHOO plunged 6.6% after Alibaba's initial public offering turned out to be below analysts' expectations. Alibaba is expected to raise at least $1 billion through its initial public offering. Currently, Yahoo holds a 22.6% stake in the Chinese e-commerce giant.
 
Internet stocks from the Technology sector such as Twitter, Inc. TWTR, Facebook, Inc. FB, Google Inc. GOOG, and Groupon, Inc. GRPN plummeted 3.7%, 1.9%, 1.0% and 20.7%, respectively.
 
Shares of online retailer Amazon.com Inc. AMZN, Internet television network provider Netflix, Inc. NFLX and online travel company The Priceline Group Inc. PCLN lost 1.6%, 1.7% and 3.3%, respectively.
 
Also, shares of momentum stocks such as electric car maker Tesla Motors, Inc. TSLA and Internet radio service provider Pandora Media, Inc. P declined 2.9% and 1.6%, respectively.
 
Whole Foods Market, Inc.'s WFM less-than-expected quarterly earnings also had a negative impact on the Nasdaq. The natural and organic food operator's shares plunged 18.8% a day after the company posted second-quarter fiscal 2014 earnings per share of 38 cents, falling short of the Zacks Consensus Estimate of 41 cents and remaining flat compared to the prior-year quarter.
 
Wednesday's economic data hardly impacted markets. The U.S. Bureau of Labor Statistics reported that nonfarm business sector labor productivity declined 1.7% in the first quarter. The decrease was more than the consensus expectation of a decline by 0.7%. This drop in first quarter productivity level was in contrast to the 2.3% rise in the fourth quarter of 2013. The unit labor cost increased 4.2% in the first quarter of 2014.
 
Separately, the Board of Governors of the Federal Reserve System reported that consumer credit increased by $17.5 billion in March from previous month's revised figure of $13.0 billion. This increase in consumer credit was more than the consensus expectations of an increase by $15.1 billion. The revolving credit and the non-revolving credit increased at an annual rate of 0.5% and 8.0%, respectively. In March, consumer credit increased at a seasonally adjusted annual rate of 6.75%.
 
Eight out of 10 sectors of the S&P 500 ended in the green. The Utilities Select Sector SPDR XLU led the advance as the sector rose 1.6%. Key stocks from the sector such as Duke Energy Corporation DUK, NextEra Energy, Inc. NEE, Dominion Resources, Inc. D, Southern Company SO and Exelon Corporation EXC increased 1.0%, 1.4%, 2.2%, 1.2% and 2.0%, respectively.
 
The Financials sector also notched up gains. The Financial Select Sector SPDR XLF advanced 1.3%. Major holdings from the sector such as Wells Fargo & Company WFC, JPMorgan Chase & Co. JPM, Bank of America Corporation BAC and Citigroup Inc. C increased 1.3%, 1.3%, 0.5% and 0.7%, respectively.

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FACEBOOK INC-A FB: Free Stock Analysis Report

GROUPON INC GRPN: Free Stock Analysis Report

NEXTERA ENERGY NEE: Free Stock Analysis Report

NETFLIX INC NFLX: Free Stock Analysis Report

PANDORA MEDIA P: Free Stock Analysis Report

PRICELINE.COM PCLN: Free Stock Analysis Report

SOUTHERN CO SO: Free Stock Analysis Report

TESLA MOTORS TSLA: Free Stock Analysis Report

TWITTER INC TWTR: Free Stock Analysis Report

WHOLE FOODS MKT WFM: Free Stock Analysis Report

YAHOO! INC YHOO: Free Stock Analysis Report

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