Record closing for both Dow Industrials and S&P 500
U.S. stocks climbed modestly on Monday, 18 May 2015 with the S&P 500 and Dow industrials both moving high enough to finish the day at record levels. Trading volume on Wall Street has been thinner than usual, however. Investors weighed the implications of dovish comments from a Federal Reserve member who once again endorsed delaying an interest-rate hike until 2016.
The Dow Jones Industrial Average gained 26.32 points, or 0.1%, to 18,298.88, finishing at the highest level ever. The Nasdaq Composite rose 30.15 points, or 0.6%, to 5,078.44, within a shouting distance from its record high. The S&P 500 rose 6.47 points, or 0.3%, to 2,129.20, closing at a record level for the third consecutive session.
On the downside, consumer staples and materials spent the entire session in the red while the energy sector recovered the bulk of its loss ahead of the close.
In economic news, a gauge of confidence among home builders declined two points to 54 in May, missing expectations. The decline was led down by views on current sales of single-family homes, according to National Association of Home Builders/Wells Fargo data released on Monday.
The afternoon strength in the tech sector was partially due to gains among chipmakers. Meanwhile, large cap tech names traded in mixed fashion, but that was masked by Apple's 1.1% gain after activist investor Carl Icahn sent a letter to Apple Chief Executive Officer Tim Cook, pushing for a larger buyback, and saying Apple is worth $240/share at this time.
Elsewhere, the consumer discretionary sector also outperformed with retailers contributing to the strength.
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In other M&A news, Endo Health fell 5.4% after announcing the acquisition of Par Pharmaceutical for $8.05 billion. For its part, the health care sector ended among the leaders with biotechnology making a contribution.
There continues to be debate in the market place about the health of the U.S. economynamely at what pace it is growing. Recent mixed U.S. economic reports have added fuel to the debate. There is a large contingent of market watchers that believe the U.S. economy is not growing fast enough to warrant a Federal Reserve interest rate hike this yeareven though the central bank has indicated it wants to raise rates this year. Wednesday afternoon's release of the minutes of the latest FOMC meeting will be very closely examined by traders and investors. This report could be the most important new element for the markets this week.
Weekend reports in the European press said Greece is precariously close to defaulting on its sovereign debt obligations to the European Union and the International Monetary Fund. The reports said Greece's big debt payment to the IMF earlier this month was mainly funds used from an emergency IMF lending fund. Other reports said that Greece-EU/IMF debt negotiations are not going well at all. This news is likely prompting some fresh investor demand for safe-haven gold and giving a lift to the recently beaten up U.S. dollar index.
Crude Oil futures settled lower on Monday, 18 May 2015 with the U.S. benchmark at its lowest level in a week, failing to find much support from clashes in Iraq and Yemen as disappointing U.S. economic data dulled the outlook for energy demand. Oil traders also fretted over the potential for a recovery in U.S. shale-oil production and mulled the outcome of next month's meeting of the Organization of the Petroleum Exporting Countries.
June crude fell 26 cents, or 0.4%, to settle at $59.43 a barrel on the New York Mercantile Exchange.
Bullion prices ended the U.S. day session with modest gains on Monday, 18 May 2015 at Comex and gold scored a three-month high which bulls considered a significant victory given the strong gains in the U.S. dollar index on this day. Gold futures Monday scored a fifth gain in a row as investors gauged the metal's appeal ahead of the release of the Federal Reserve's April meeting minutes on Wednesday and Greece's International Monetary Fund repayments next month.
Gold for June delivery on Comex rose $2.30, or 0.2%, to settle at $1,227.60 an ounce. Gold, which has posted gains in each of the last four trading sessions. July silver also advanced 16.9 cents, or 1%, to $17.732 an ounce.
Today's participation was well below average with fewer than 700 million shares changing hands at the NYSE floor.
Tomorrow, April Housing Starts (consensus 1.019 million) and Building Permits (consensus 1.065 million) will be released at 8:30 ET.
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