Strong service sector numbers and modestly impressive job data helped benchmarks to finish in the green zone on Wednesday. This was the second consecutive day of gains for the indices. Moreover, rally in energy shares following rebound in oil prices and solid gains in materials stocks also boosted investor confidence. The S&P 500 reached its 48th record high this year and the Dow registered the same for 33rd time this year.
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) rose 0.2% to close at 17,912.62. The Standard & Poor 500 (S&P 500) increased 0.4% to close at 2,074.33. The tech-laden Nasdaq Composite Index closed at 4,774.47; also gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) declined 3% to settle at 12.47. A total of about 6.1 billion shares were traded on Wednesday. Advancers outpaced declining stocks on the NYSE. For 63% stocks that advanced, 34% declined.
On Wednesday, the Institute for Supply Management reported that ISM Services Index increased to 59.3 in November from October's reading of 57.1, beating the consensus estimate of 57.5. The reading has remained above the 50-mark for 58 consecutive months. Additionally, Markit's final Purchasing Managers Index for service sector also indicated expansion in service sector activities. Markit reported that final service sector PMI came in at 56.2 in November. However, the reading was slightly below October's figure of 57.1.
Separately, Automatic Data Processing, Inc. (ADP) reported that private sector added 208,000 jobs in November, registering eighth straight month of job gains in excess of 200,000. However, the tally came in below October's and September's numbers of 233,000 and 213,000, respectively. Importantly, the tally for October was modestly revised higher from 230,000 to 233,000. Investors are also looking forward to the U.S. Labor Department's employment report which is due on Friday. Additionally, the Bureau of Labor Statistics revised third quarter nonfarm labor productivity upward to 2.3%, compared to earlier reported figure of 2%.
The price of WTI crude oil rebounded on Wednesday and gained 0.7%, or 50 cents, to $67.38 per barrel. Moreover, U.S. commercial crude oil inventories declined 3.7 million barrels in the week ending Nov 28 from previous week's level to 79.3 million barrels. These developments had a positive impact on the Energy Select Sector SPDR (XLE) that rose 1.2% yesterday. Key energy stocks including Schlumberger Limited (SLB), Baker Hughes Incorporated (BHI), EOG Resources, Inc. (EOG) and Marathon Oil Corporation (MRO) rose 1.8%, 1.4%, 1.7% and 2.7%, respectively.
Also, the Materials Select Sector SPDR (XLB) was the biggest gainer among the S&P 500 sectors on Wednesday. The sector gained 1.5% yesterday. Key materials stocks including The Dow Chemical Company (DOW), Nucor Corporation (NUE), Monsanto Company (MON) and FMC Corp. (FMC) increased 1.3%, 3.4%, 1.7% and 1.8%, respectively. Eight out of 10 S&P 500 sectors registered gains on Wednesday.
However, shares of Brown-Forman Corporation (BF.B) declined 3.9% after reporting second quarter fiscal 2015 earnings per share of 97 cents, missing the Zacks Consensus Estimate of $1.05. Consequently, the company downgraded its earnings guidance to a band of $3.15–$3.35 per share for fiscal 2015, compared to $3.25–$3.45 per share projected earlier.
Brown-Forman's dismal earnings results had a negative impact on the Consumer Staples Select Sector SPDR (XLP). The sector was the biggest loser among the S&P 500 sectors and declined 0.7% on Wednesday. Key stocks from the sector including Keurig Green Mountain, Inc. (GMCR), The Coca-Cola Company (KO), Pepsico, Inc. (PEP) and Wal-Mart Stores Inc. (WMT) lost 1.4%, 1.7%, 1.4% and 1.1%, respectively.
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) rose 0.2% to close at 17,912.62. The Standard & Poor 500 (S&P 500) increased 0.4% to close at 2,074.33. The tech-laden Nasdaq Composite Index closed at 4,774.47; also gaining 0.4%. The fear-gauge CBOE Volatility Index (VIX) declined 3% to settle at 12.47. A total of about 6.1 billion shares were traded on Wednesday. Advancers outpaced declining stocks on the NYSE. For 63% stocks that advanced, 34% declined.
On Wednesday, the Institute for Supply Management reported that ISM Services Index increased to 59.3 in November from October's reading of 57.1, beating the consensus estimate of 57.5. The reading has remained above the 50-mark for 58 consecutive months. Additionally, Markit's final Purchasing Managers Index for service sector also indicated expansion in service sector activities. Markit reported that final service sector PMI came in at 56.2 in November. However, the reading was slightly below October's figure of 57.1.
Separately, Automatic Data Processing, Inc. (ADP) reported that private sector added 208,000 jobs in November, registering eighth straight month of job gains in excess of 200,000. However, the tally came in below October's and September's numbers of 233,000 and 213,000, respectively. Importantly, the tally for October was modestly revised higher from 230,000 to 233,000. Investors are also looking forward to the U.S. Labor Department's employment report which is due on Friday. Additionally, the Bureau of Labor Statistics revised third quarter nonfarm labor productivity upward to 2.3%, compared to earlier reported figure of 2%.
The price of WTI crude oil rebounded on Wednesday and gained 0.7%, or 50 cents, to $67.38 per barrel. Moreover, U.S. commercial crude oil inventories declined 3.7 million barrels in the week ending Nov 28 from previous week's level to 79.3 million barrels. These developments had a positive impact on the Energy Select Sector SPDR (XLE) that rose 1.2% yesterday. Key energy stocks including Schlumberger Limited (SLB), Baker Hughes Incorporated (BHI), EOG Resources, Inc. (EOG) and Marathon Oil Corporation (MRO) rose 1.8%, 1.4%, 1.7% and 2.7%, respectively.
Also, the Materials Select Sector SPDR (XLB) was the biggest gainer among the S&P 500 sectors on Wednesday. The sector gained 1.5% yesterday. Key materials stocks including The Dow Chemical Company (DOW), Nucor Corporation (NUE), Monsanto Company (MON) and FMC Corp. (FMC) increased 1.3%, 3.4%, 1.7% and 1.8%, respectively. Eight out of 10 S&P 500 sectors registered gains on Wednesday.
However, shares of Brown-Forman Corporation (BF.B) declined 3.9% after reporting second quarter fiscal 2015 earnings per share of 97 cents, missing the Zacks Consensus Estimate of $1.05. Consequently, the company downgraded its earnings guidance to a band of $3.15–$3.35 per share for fiscal 2015, compared to $3.25–$3.45 per share projected earlier.
Brown-Forman's dismal earnings results had a negative impact on the Consumer Staples Select Sector SPDR (XLP). The sector was the biggest loser among the S&P 500 sectors and declined 0.7% on Wednesday. Key stocks from the sector including Keurig Green Mountain, Inc. (GMCR), The Coca-Cola Company (KO), Pepsico, Inc. (PEP) and Wal-Mart Stores Inc. (WMT) lost 1.4%, 1.7%, 1.4% and 1.1%, respectively.
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AUTOMATIC DATA (ADP): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
BAKER-HUGHES (BHI): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
MARATHON OIL CP (MRO): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
NUCOR CORP (NUE): Free Stock Analysis Report
MONSANTO CO-NEW (MON): Free Stock Analysis Report
FMC CORP (FMC): Free Stock Analysis Report
BROWN FORMAN B (BF.B): Free Stock Analysis Report
KEURIG GREEN MT (GMCR): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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