IBM leads the pack of Dow winners
U.S. stocks finished a choppy trading session higher on Tuesday, 25 March 2014, boosted by stronger-than-expected consumer confidence data. The main indices recorded moderate gains after two days of losses.
The Dow Jones Industrial Average gained 91.19 points, or 0.6%, to 16,367.88. The Nasdaq Composite finished the day higher after briefly dipping into red. The tech-heavy index gained 7.88 points, or 0.2%, to 4,234.27. The S&P 500 ended the day 8.19 points, or 0.4%, higher at 1,865.63.
Nine out of ten S&P 500 sectors closed the day with a gain led by utilities. The lone loser was the consumer discretionary sector.
IBM led the Dow winners. It surged 3.6% on a few announcements detailing new business activity.
Among individual stocks, Plug Power Inc. surged 49% to $8.48 after chief executive reportedly said that he will be announcing a deal with a global automaker in two to three weeks. Walgreen rose 3.3% after the company reported its fiscal second-quarter earnings, which fell slightly from the year-earlier period. The drugstore chain said it would close 76 stores later this year.
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In overnight news, the German Ifo business confidence index weakened in March, in part due to the crisis in Ukraine. The Ifo index came in at 110.7 in March versus 111.3 in February. Forecasts were for a reading of 108.0 in March.
The leaders of the world's largest economies (formerly called the G-8 and now called the G-7) moved on Tuesday to remove Russia out of the group. The action was not unexpected and had little market impact.
Traders are still buzzing about the downbeat manufacturing data from China on Monday, which continued a trend of weaker-than-expected economic data coming from the world's second-largest economy. There is now talk in the market place that China economic officials may soon act to invigorate their economy with monetary stimulus.
The metals markets got very little direction Tuesday from U.S. economic data that included the S&P/Case-Shiller home price index, the monthly house price index, new residential sales, the consumer confidence index, and the Richmond Fed business survey. The data was a mixed bag, regarding consensus forecasts.
In details, the January Housing Price Index from the FHFA increased 0.5%, which followed a revised uptick of 0.7% observed during the prior month. The Case-Shiller 20-city Home Price Index for January rose 13.2% while a 13.3% increase had been expected by the consensus. This followed the previous month's increase of 13.4%. Separately, New home sales declined 3.3% in February to 440,000 from a downwardly revised 455,000 (from 468,000) in January. The consensus expected sales to fall to 445,000.
The Conference Board's Consumer Confidence Index strengthened in March. The index increased to 82.3 from an upwardly revised 78.3 (from 78.1) in February. The consensus pegged the index at 78.2. The reading put confidence levels at the highest point since January 2008. Typically, confidence levels trend with unemployment, gasoline prices, and the equity market. The increase in volatility in the equity market over the past few weeks did nothing to harm confidence. Instead, consumers relied on more favorable employment conditions.
Precious metals witnessed mixed finish on Tuesday, 25 March 2014. Gold futures closed with a modest gain on Tuesday as declines in monthly U.S. home sales and prices drove some safe-haven demand for the metal, helping the metal edge up from a more than five-week low. But silver prices dropped.
Gold for April delivery rose 20 cents to settle at $1,311.40 an ounce on the Comex division of the New York Mercantile Exchange. May silver shed nearly 9 cents, or 0.4%, to $19.98 an ounce.
Crude oil futures settled with a loss on Tuesday, 25 March 2014 at Nymex as traders bet that upcoming reports will show another weekly rise in U.S. crude inventories, while rising demand prospects fueled a rally in natural-gas futures to their highest level in nearly a week.
Crude for May delivery shed 41 cents, or 0.4%, to settle at $99.19 on the New York Mercantile Exchange after tapping a high of $100.22 in electronic trading. In the latest weekly inventory report, market expects a climb of 2.6 million barrels in crude stockpiles for the week ended March 21. They expect gasoline inventories to fall by 1.8 million barrels and forecast a decline of 1 million barrels for distillates, which include heating oil.
Indian ADRs ended higher on Tuesday. In the IT space, Infosys was up 0.11% at $53.38 and Wipro gained 0.61% at $13.10. In the banking space, ICICI Bank advanced 1.29% at $43.15 and HDFC Bank rose 1.41% at $39.58. In the other sectors, Tata Motors gained 2.41% at $33.96 and Dr Reddy's Laboratories was down 0.22% at $44.50.
For tomorrow, the economic calendar will feature the latest reading for the mortgage applications index and February data for durable goods orders.
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