Stock Market News for June 06, 2014 - Market News - American Express (NYSE:AXP), Boeing (NYSE:BA)

Benchmarks notched record highs again on Thursday following the announcement of stimulus measures by the ECB intended to boost Eurozone's recovery. The S&P 500 closed at a record high for the 17th time this year. The blue-chip index also closed at a record level for the 7th time this year. The Nasdaq too closed at a level last seen in late March. Meanwhile, investors eagerly await Friday's monthly US jobs report.

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 0.6% to close Thursday's trading session at 16,836.11. The Standard & Poor 500 (S&P 500) went up 0.7% to finish at 1,940.46. The tech-laden Nasdaq Composite Index advanced 1.1% to 4,296.23. The fear-gauge CBOE Volatility Index (VIX) dropped 3.3% to settle at 11.68. Total volume on the New York Stock Exchange was 3.1 billion shares. Advancers outpaced declining stocks on the NYSE. For 76% stocks that advanced, 21% declined.

Benchmarks ended in positive territory following the announcement of several stimulus measures by the European Central Bank (ECB). The central bank reduced its key interest rates. The refinancing rate was lowered to 0.15% from 0.25% and the marginal lending facility rate was reduced to 0.40% from 0.75%. ECB also cut the deposit rates to -0.10%; thereby becoming the first central bank to have a negative rate.

Additionally, ECB deployed a series of targeted long term refinancing operations in an effort to boost bank lending to the non-financial private sector in the Eurozone. The ECB also announced that it will halt sterilizing purchases under its Securities Market Program. The program was launched in May 2010 in order to relieve market tensions by purchasing government and private debt.

Separately, ECB President Mario Draghi said preparations for outright purchases of asset-backed securities have begun. On Monday, he had urged banks to be “particularly watchful” for any “pernicious negative spiral” of low inflation rate and weak lending rates derailing the eurozone's recovery.
Hedge fund manager David Tepper stated that the ECB's move partly “alleviated” his concerns about the market. His comment enthused investors since not long ago his views on the market had raised a lot of concerns. In May, Tepper, the head of Apploosa Management had said “it's nervous time” and added "I'm not saying go short, I'm just saying don't be too fricking long right now."

Meanwhile, investors await the outcome of May's employment report, which will be released on Friday. According to the consensus estimate, total nonfarm payroll jobs are expected to come in at 213,000 and the unemployment rate will be 6.4%. In May, the U.S. Bureau of Labor Statistics reported total nonfarm payroll employment had risen to 288,000 in April. The economy added the most number of jobs in April since January 2012. The unemployment rate also dropped to 6.3% in April from 6.7% in March. This was its lowest level since September 2008 and the biggest one-month decline in 31 years.

Separately, initial claims were reported to have increased less than expected last week. The U.S. Department of Labor reported that seasonally adjusted initial claims increased 8,000 to 312,000 in the week ending May 31. However, the rise was less than the consensus estimate of initial claims increasing to 313,000.

Joy Global, Inc. JOY advanced the most among the S&P 500 components after the company reported better-than-expected second quarter 2014 results. The company posted earnings per share of 76 cents, more than the Zacks Consensus Estimate of 70 cents. Shares of Joy Global surged 6.7%.

The Industrial Select Sector SPDR XLI gained 1.0%, the highest among the S&P 500 sectors. Key stocks from the sector such as General Electric Company GE, United Technologies Corp. UTX, Union Pacific Corporation UNP, The Boeing Company BA, 3M Company MMM and Caterpillar Inc. CAT increased 0.8%, 0.9%, 1.3%, 1.1%, 1.0% and 2.5%, respectively.

The Financials sector followed the Industrial sector. The sector advanced 0.9%. Top holdings from the sector such as Wells Fargo & Company WFC, JPMorgan Chase & Co. JPM, Bank of America Corporation BAC, Citigroup Inc. C and American Express Company AXP increased 1.2%, 1.7%, 1.5%, 1.6% and 1.1%, respectively. Overall, all the 10 sectors of the S&P 500 ended in the green.

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