Market Overview

Dow Closes At A New High As Late-Month Rally Boosts Stocks

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April turned out to be a pretty good month for stocks.

Surprisingly good.

The Dow Jones Industrials, which had been down as much as 7.3 percent for the year on February 3, finished in the black for the year for the first time.

That said, not all stocks had particularly good months. Biotechs, some technology stocks and anything to which one could attach the term "momentum stock" floundered. How the markets will perform over the next six months is anyone's guess. The May-October period is typically the weakest six months of the year.

The Dow closed up 45 points on Wednesday, or 0.3 percent, to 16,580.84. 72, breaking its old record of 16,576.66, set on December 31. The Dow's intraday peak was 16,631.63, set on April 4. For the month, the blue-chip index was up 0.8 percent and is up 0.03 percent for 2014.

The Standard & Poor's 500 (NYSE: SPY) Index, up 0.3 percent to 1,884, finished April with a 0.6 percent gain and is up 1.9 percent for the year. The Nasdaq Composite Index was up 0.3 to 4,115 for the day. But the index fell 2.1 percent for April and is down 1.5 percent for the year. It had been up as much as 4.3 percent for the year on March 5.

See also: Average National Gas Prices At Their Highest Since March 2013

It was the momentum stocks that caused all sorts of mischief and ultimate weighed on the Nasdaq. Amazon.com (NASDAQ: AMZN) was down about 9.5 percent for the month, finished at about 9.5 percent for the month, finished at 304.25. Since peaking at the end of January, the shares have fallen about 25 percent.

Tesla Motors (NASDAQ: TSLA) fell 15.8 percent from an April 2 peak of 230.89 to as low as $184.32. It rebounded 12.8 percent to $207.89. Twitter Inc. (NYSE: TWTR) suffered a lot. Shares fell 16.5 percent for the month, in part because its first-quarter earnings were a disappointment. The shares are down 38.8 percent for the year.

The biotech stocks were the real villains as the market was hit by a flood of initial public offerings from companies with little revenue and no profits. So, the SPDR S&P Biotech exchange-traded fund (NYSE: XBI) fell 9.7 percent for the month. The iShares Nasdaq Biotechnology Index Fund (NYSE: IBB) was off 2.6 percent.

The market rally was aided by the Federal Reserve, which left its key interest rates unchanged. The central bank did trim its purchases of Treasury and mortgage securities by a total of $10 billion a month. Interest rates, however, remained steady. The 10-year Treasury yield fell to 2.648 percent from 2.695 percent on Tuesday. The yield is down 12.5 percent for the December 31 yield of 3.026 percent.

The market pushed rates lower because the Commerce Department said the economy had a weak first quarter, mostly because of the brutal winter. The Fed acknowledge that as well but believes growth will strengthen this spring and summer.

Crude oil prices fell Wednesday with light sweet crude falling to $99.74 a barrel in New York. That appears to reflect ample domestic inventories and an easing of tensions in Ukraine and elsewhere. Crude was down 1.8 percent for the month but is up 1.3 percent for the year. Gold fell 40 cents to $1,295 an ounce. It was up 0.9 percent for the month and is up 78 percent for the year. The gains reflect a falling dollar and increased global tensions.

The big winner among commodities was coffee, up 15.7 percent for the month at $2.0585 a pound in New York futures trading. It's up 86 percent for the year, mostly because of a terrible drought in Brazil, the largest coffee-producing country. Ultimately, that will mean higher retail prices.

Also higher for April were corn, soybeans and wheat, all up by more than 10 percent. Those increases may push some food prices higher, particularly beef, chicken and pork.

Posted-In: News Bonds Commodities Top Stories Economics Hot After-Hours Center Markets Best of Benzinga

 

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