Seven of ten sectors end in the red led by energy sector
US stocks ended in the red on Friday, 31 January 2014. U.S. stocks ended the week and the month with deep losses following a sell-off on Friday, which was prompted by disappointing earnings, renewed fears over deflation in the euro zone and a continuing rout in emerging markets. Equities began the session sharply lower but a day-long rebound helped the major averages finish the trading day with more palatable losses. The S&P 500 made a very brief afternoon appearance in positive territory before retreating again in the final hour.
The Dow Jones Industrial Average closed 149.76 points, or 0.9%, lower at 15,698.85. The blue-chip index, which suffered six triple-digit losses this month, ended the week 1.9% lower and recorded a 5.2% decline for January. The Nasdaq Composite lost 19.25 points, or 0.5%, to 4,103.88. The tech-heavy index is down 0.6% over the week, its second-straight week of declines and 1.7% lower over the month. The S&P 500 ended the session 11.60 points, or 0.7%, at 1,782.59, and recorded its third weekly decline in a row. The benchmark index lost 0.4% over the week and 3.6% over the month.
Seven of ten sectors ended in the red with energy seeing the largest decline. Financials lagged while industrials, materials, and technology sectors outperformed.
The sector was pressured by Dow component Chevron, which tumbled 4.1% following disappointing earnings. The broader energy sector ended January behind the remaining nine groups with a loss of 6.3%.
Disappointing earnings from Amazon.com and Mattel Inc. set the downbeat tone early in the session. Investors found no solace from U.S. consumer spending data, which showed Americans spent more in December, but their incomes stagnated.
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Amazon.com plunged 11.0% following its disappointing earnings and cautious guidance. Despite the sharp loss in Amazon.com, the discretionary sector was able to climb off its lows with help from Chipotle Mexican Grill and homebuilders. Chipotle spiked 11.7% after reporting in-line earnings.
Notably, the tech sector drew strength from Google, which jumped 4.0% after reporting earnings. Although the company missed its earnings estimate by $0.28, investors were pleased to see a 13% quarterly increase in click revenue.
Wal-Mart Stores shares closed mostly flat even as the world's largest retailer cut its fourth-quarter earnings forecast. Wal-Mart warned the sales impact from the reduction in the U.S. government food stamps was greater than expected.
Chevron shares fell 4.1% as the oil company reported lower profit and revenues than expected.
MasterCard shares slid 5.1% after the credit-card company missed Wall Street's expectations for its fourth-quarter profits.
April gold and March silver surrendered morning gains as they reversed from their respective session highs of $1254.80 per ounce and $19.47 per ounce set moments after pit trade opened. Gold slipped into the red in afternoon action and settled 0.2% lower at $1239.80 per ounce. The yellow metal fell 2.0% over the week as investors reacted to the FOMC taper announcement and strong U.S. GDP data. Silver, unable to regain momentum, settled unchanged at $19.13 per ounce, booking a 3.2% loss for the week.
March crude oil traded in negative territory as the dollar index posted modest gains. It came off its session low of $97.23 per barrel set at pit trade open and trended higher until late afternoon action. It then lost steam after touching a session high of $98.39 per barrel and settled with a 0.7% loss at $97.53 per barrel. Despite today's weakness, crude oil gained 0.9% over the week.
March natural gas extended yesterday's losses, falling as low as $4.72 per MMBtu in late morning action on forecasts for milder weather. It gained some steam in the last hour of floor trade and settled at $4.94 per MMBtu, or 1.6% lower. Despite trading at 4 year highs earlier this week, natural gas booked a weekly loss of 1.8%.
Participation was well above average, which was likely related to month-end activity as 937 million shares traded at the NYSE.
Monday's data will be limited to the New Home Sales report for December, which will be released at 10:00 ET.
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