Investors assess a slew of mixed economic reports and earnings results
US stocks ended Thursday's choppy trade generally lower on 01 May 2014 as traders stuck to the sidelines ahead of the key jobs report due Friday morning. Equities began the first session of May near their flat lines amid the lack of leadership from overseas as most global markets were closed for Labor Day. Investors assessed a slew of mixed economic reports and earnings results. Consumer spending and ISM reports were better than expected, while jobless claims and construction spending missed forecasts.
The Dow Jones Industrial Average lost 21.97 points, or 0.1%, to 16,558.87. The Nasdaq Composite added 12.9 points, or 0.3% to 4,127.45. The S&P 500 ended the day less than a point lower at 1,883.68.
After digesting Wednesday afternoon's FOMC statement from the U.S. Federal Reserve, the take away from that report is that the U.S. economy is picking up momentum after a rough winter. Thursday's U.S. economic data fell in line with the FOMC statement.
In overnight news, the much-anticipated China official manufacturing purchasing managers' index came in at 50.4 in April from 50.3 in March, it was reported Thursday. That reading was right in line with market expectations and had little impact on the market place.
Among economic data expected at Wall Street on Thursday, the initial claims level increased to 344,000 for the week ending April 26 from an upwardly revised 330,000 (from 329,000) for the week ending April 19. That was the highest initial claims reading since February, while the consensus expected the claims level to fall to 315,000.
Personal income increased 0.5% in March after increasing an upwardly revised 0.4% (from 0.3%) in February. The consensus expected income to increase 0.4%. Personal spending also topped expectations, increasing 0.9% in March after increasing an upwardly revised 0.5% (from 0.3%) in February.
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The ISM Manufacturing Index increased to 54.9 in April from 53.7 in March. The consensus expected the ISM Manufacturing Index to increase to 54.5. The gain in the ISM Index was in-line with the improvements reported in the regional Federal Reserve manufacturing surveys released throughout April. Also, construction spending increased 0.2% in March after falling a downwardly revised 0.2% (from +0.1%) in February. The consensus expected construction spending to increase 0.4%. The extreme winter weather in January and February did not lead to a release in pent up demand, suggesting the weather effects may have been overstated.
The market place is awaiting what is arguably the most important economic report of the month on Friday: the April U.S. employment situation report from the Labor Department. The key non-farm payrolls number is forecast to come in at up around 215,000.
In earnings news, shares of Yelp rallied 9.8% after the online-review company said after the closing bell on Wednesday that revenue jumped to $76.4 million in the first quarter, from $46.1 million. Motorola Solutions first-quarter net earnings came in slightly below expectations, as sales dropped. The company also projects revenue decline in the second quarter. Shares fell 1.5%. Exxon Mobil lost 1.0% after beating earnings estimates on below-consensus revenue.
The discretionary sector was boosted by media names amid reports indicating AT&T approached DirecTV about a potential $40 billion acquisition.
Bullion prices ended lower at Comex on Thursday, 01 May 2014. Gold prices fell 1% on Thursday to settle at their lowest level in more than a week, as a rise in consumer spending and income helped dull investment demand for the metal a day ahead of a much-anticipated U.S. jobs report. The Russia-Ukraine crisis is still on the radar screen of the world market place. However, there has been little fresh news coming from that region this week.
Gold for June delivery fell $12.50, or 1%, to settle at $1,283.40 an ounce on the Comex division. July silver shed 13 cents, or 0.7%, to $19.04 an ounce.
Crude Oil futures closed at their lowest in five weeks on Thursday, 01 May 2014 holding their ground below $100 a barrel, pressured by ample domestic crude supplies as some downbeat U.S. data raised questions about the strength of an economic recovery and outlook for energy demand.
Crude oil for June delivery fell 32 cents, or 0.3%, to settle at $99.42 a barrel on the New York Mercantile Exchange.
Yesterday's report from the Energy Information Administration showed crude supplies rose less than expected.
Participation was a bit below average as 682 million shares changed hands at the NYSE floor.
Tomorrow, the Nonfarm Payrolls report for April (consensus 210,000) will be released at 8:30 ET, while March Factory Orders (consensus 1.6%) will be announced at 10:00 ET.
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