US stocks ended with strong gains for the week that ended on 03 May, 2013. Indices gained between 1.8% to 3% for the week. Earning reports dominated the week. Stocks surged on the last trading day of the week ie Friday, 03 May. U.S. stocks ended with substantial gains on Friday following a better than expected job data at Wall Street.
For the week, the Dow ended higher by 261.41 points (1.8%) at 14,973.96. Nasdaq ended higher by 99.37 points (3%) at 3,378.63. S&P 500 ended higher by 32.18 points (2%) at 1,614.42.
On Monday, equities climbed throughout the session. As a result, the S&P 500 settled higher by 0.7% while the Nasdaq rose 0.9%. The Nasdaq displayed relative strength from the onset as technology stocks paced today's advance. Major sector components Apple, Google and Microsoft all settled with gains of at least 2.5%.
On Tuesday, stocks ended the session on a modestly higher note as the Nasdaq rose 0.7% while the S&P 500 added 0.3%. The Dow Jones Industrial Average, for its part, tacked on 0.1%. The major averages spent the day climbing off their lows after it was revealed that manufacturing activity in the Chicago region in April contracted for the first time since September 2009, falling from 52.4 in March to 49.0. The consensus expected the Chicago PMI to decline to 52.0.
Stocks ended Wednesday's session on their lows as global growth concerns reemerged. China reminded investors of its importance to the global economy as the decline in the country's Manufacturing PMI (50.6 actual, 50.9 prior, 51.0 consensus) along with a disappointing U.S. ISM Index (50.7 actual, 51.3 prior, 51.0 consensus) pressured commodities and commodity-related sectors. The materials space declined throughout the day as related metals sold off.
Thursday saw the S&P 500 erase all of Wednesday's losses. The benchmark average rose 0.9% while the Nasdaq outperformed with a gain of 1.3%. In addition to earnings reaction, investors welcomed further easing from the European Central Bank as the ECB cut its key interest rate by 25 basis points to a record low of 0.50%. Visa jumped 5.7% after beating on earnings and revenue.
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On Friday, 03 May 2013, U.S. stocks rose to record heights, with the Dow industrials soaring above 15,000 and the S&P 500 index above 1,600, as Wall Street celebrated the April jobs report. The milestones, only one of which was sustained into the close, came after the government reported the U.S. economy added more jobs than projected in April and the jobless rate fell to a four-year low.
The Dow Jones Industrial Average hit a record intraday high of 15,009.59, before ending at a record close of 14,973.96, up 142.38 points. After hitting an intraday record of 1,618.46, the S&P 500 gained 16.83 points to 1,614.42. The S&P 500's rise above 1,600 comes 13 years after the S&P 500 first closed above 1,500, a landmark hit in March 2000, near the end of the dot-com bubble.
On Friday, the employment report for April looked good. Payroll growth surprised to the upside, increasing by 165,000. That was 10,000 more than the 155,000 expected. Revisions in March, to 138,000 from 88,000, and February, to 332,000 from 268,000, were strongly positive.
Yet, the underlying details point toward weaker consumption levels as the average workweek dropped to 34.4 hours in April from 34.6 and average hourly earnings increased 0.2%.
Reviewing other remaining data, the ISM Non-manufacturing Index declined from 54.4 in March to 53.1 in April. The consensus expected the index to fall to 54.0.
Separately, total factory orders fell 4.0% in March after increasing a downwardly revised 1.9% (from 3.0%) in February. The consensus expected factory orders to fall 2.5%. Durable goods orders fell 5.8% (from a previously released -5.7%) after increasing 4.3% in March.
In notable sector earnings, American International Group added 5.7% after reporting a bottom-line beat. LinkedIn slumped 12.9% after its better-than-expected earnings report included cautious full-year revenue guidance. Kraft Foods rose 5.1% after reporting first-quarter profit that topped market expectations.
Bullions ended mixed on Friday, 03 May 2013 at Comex. Gold futures finished with a modest loss on Friday as better-than-expected U.S. employment figures dulled the precious metal's safe-haven appeal.
Gold for June delivery fell $3.40, or 0.2%, to settle at $1,464.20 an ounce on the Comex division of the New York Mercantile Exchange. For the week, however, gold found support from the European Central Bank's decision to cut interest rates and from strength in physical demand to end the week 0.7% higher. The July silver contract climbed 18 cents, or 0.8%, to end at $24.01 an ounce, up 1% from a week ago.
Crude-oil futures rallied on Friday, 03 May 2013 at Nymex as a report showing that the U.S. economy created more jobs than expected in April raised the prospects for energy demand, lifting prices to their highest level in a month. Crude oil for June delivery climbed by $1.62, or 1.7%, to settle at $95.61 a barrel. Oil futures scored a weekly gain of 2.8%
For every stock falling, roughly three gained on the New York Stock Exchange, where 713 million shares traded. Composite volume neared 3.6 billion.
Indian ADRs ended mixed on Friday. In the IT space, Infosys was up 1.9% and Wipro was up 2.9%. In the Banking space, HDFC Bank was down 3.2% and ICICI Bank was down 3.4%. In the Telecom space, Tata Communication was up 0.6%. In other space, Tata Motors was down 2%, Dr Reddys was up 0.4% and Sterlite was up 1.5%.
For the year, the Dow, Nasdaq and S&P 500 are trading higher by 14.3%, 11.9% and 13.2% respectively. There is no notable economic news set to be released on Monday. On Tuesday, March consumer credit will be announced at 15:00 ET.
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