Market Wrap for Monday, January 28: Dow and S&P Fall Slightly; Nasdaq Records Small Gain
Stocks were little changed on Monday after the major averages made an impressive showing last week. Earnings season remains the primary focus of investors amid a low-volatility atmosphere.
Overall, the market has started the year with a bang, with the S&P 500 already tacking on more than 5 percent in January alone. For the day, the Dow and S&P fell while the Nasdaq recorded a small gain.
The Dow Jones Industrial Average fell 14 points, or 0.10 percent, to close at 13,882.
The S&P 500 lost a little less than 3 points, or 0.18 percent, to finish at 1,500.
The Nasdaq Composite added around 5 points, or 0.15 percent, on the day to 3,154.
Three important domestic economic reports were released on Monday morning -- durable goods orders, durable goods orders ex-transportation and pending home sales. Durable goods orders for December surged 4.6 percent after increasing 0.7 percent in November. This was well above consensus estimates of an increase of just 1.6 percent.
The primary factor for the sharp rise was aircraft orders. Non-defense aircraft orders rose 10.1 percent and defense orders were up 56.4 percent. Excluding transportation, durable goods orders rose 1.3 percent in the month versus a gain of 1.2 percent in November. This was also well ahead of consensus estimates predicting flat growth.
Pending home sales for December were down 4.3 percent versus a gain of 1.6 percent in November. This was below consensus estimates that called for no change in pending home sales.
Crude oil was last trading moderately higher late on Monday. NYMEX crude futures, the U.S. benchmark, had added 0.58 percent to $96.44 while Brent crude contracts were up 0.08 percent to $113.37. Natural gas traded sharply lower to start the week, falling more than 4.60 percent to $3.28.
Gold and silver lost ground on Monday. At last check, COMEX gold futures had shed 0.16 percent to $1,656 while silver contracts were lower by 1 percent at $30.89. Copper futures had risen 0.23 percent.
Both corn and wheat were positive late in the day, with corn trading up better than 1 percent and wheat adding around 0.35 percent. The biggest mover in the soft commodity complex was sugar which climbed almost 2 percent.
Around the close of equity trading, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) had lost 0.33 percent to $117.64. The drop in bond prices pushed yields slightly higher on the day.
While the 2-Year Treasury yield was unchanged, the 5-Year Note yield was 2 basis points higher to 0.87 percent. The 10-Year Note and 30-Year bond yields rose 2 and 1 basis point respectively, to 1.97 percent and 3.15 percent.
Near the close, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was up 0.05 percent to $21.79. The closely watched EUR/USD pair was close to unchanged at $1.3456.
Most of the other major currency pairs were also trading near the flat-line with the exception of the GBP/USD which had lost around 0.65 percent.
Volatility and Volume
The VIX jumped on Monday despite little change in the major averages. The volatility index rose more than 5 percent to 13.57.
Volume was very light on a sleepy Monday for Wall Street. Only around 100 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of more than 138 million.
Battleground stock Herbalife (NYSE: HLF) fell around 8 percent on Monday after multilevel marketing firm Fortune Hi-Tech Marketing had its assets seized by the FTC. The agency called the company a "classic pyramid scheme," an accusation that hedge fund manager Bill Ackman has leveled against Herbalife.
Fellow multilevel marketer Nu Skin (NYSE: NUS) also lost 5 percent on the news.
Shares of Keryx Biopharmaceuticals (NASDAQ: KERX) surged around 80 percent on Monday after the company said that results from its Phase III study of a drug known as Zerenex showed that it reduced serum phosphorus levels in patents with end-stage renal disease on dialysis.
Struggling online gaming company Zynga (NASDAQ: ZNGA) jumped around 14 percent to close near the highs of the day. While there was no obvious news behind the move, investors may be speculating that Facebook (NASDAQ: FB), the primary platform for Zynga's games, will report strong quarterly earnings results on Wednesday.
Opko Health (NYSE: OPK) climbed more than 6 percent. The company's CEO Phil Frost is scheduled to appear on Mad Money with Jim Cramer on Monday evening.
Caterpillar (NYSE: CAT) rose roughly 2 percent after the company released its quarterly earnings results prior to the opening bell.
Jos. A. Bank (NASDAQ: JOSB) plunged more than 15 percent on the session after releasing disappointing quarterly results.
Printing companies 3D Systems (NYSE: DDD) and Stratasys (NASDAQ: SSYS) were both sharply lower after a bearish Seeking Alpha article suggested that there could be a bubble forming in three-dimensional printing. 3D Systems shares lost around 14 percent while Stratasys fell almost 10 percent.
Apple (NASDAQ: AAPL) rose a little better than 2 percent after falling more than 12 percent last week after the company's quarterly earnings.
Netflix (NASDAQ: NFLX) lost better than 4 percent on Monday after rallying more than 65 percent last week after a very bullish earnings report.
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