Biotechs and social-network companies post solid gains
U.S. stocks extended gains on Tuesday, 29 April 2014 as better-than-expected earnings from Merck and Sprint outweighed mildly disappointing economic reports. Equity indices began the session on an upbeat note, slowly building on their early gains throughout the afternoon. Consumer confidence dipped slightly in April, coming in below economists' forecasts. Separately, U.S. home-price growth slowed in February for the fourth consecutive month.
The Dow Jones Industrial Average closed 86.63 points, or 0.5%, higher at 16,535.37. The Nasdaq Composite added 29.14 points, or 0.7%, to 4,103.54. The S&P 500 ended the day 8.9 points, or 0.5%, higher at 1,878.33.
Eight of ten main sectors on the benchmark finished with gains. Biotechs and social-network companies, posted solid gains. Merck led the pack of Dow winners.
Sprint shares rallied 11% after the company posted a smaller-than-expected loss in the first quarter. Merck rose 3.6% after it reported higher-than-expected earnings. The company is leading gainer on the Dow Industrials.
The Conference Board's Consumer Confidence Index fell to 82.3 in April from an upwardly revised 83.9 (from 82.3) in March. The consensus pegged the Consumer Confidence Index at 83.5. The Present Situation Index fell to 78.3 in April from 82.5 in March. The Expectations Index increased slightly, from 84.8 in March to 84.9 in April. The overall decline in confidence was a little unusual. Typically, confidence levels trend with employment conditions, equity prices, gasoline costs, and media reports. Extremely low layoff levels coupled with a generally rising stock market in April resulted in a large increase in the University of Michigan Consumer Sentiment Index. Those factors were expected, yet they failed to push the Consumer Confidence Index higher.
Separately, The Case-Shiller 20-city Home Price Index for February rose 13.2% while a 13.0% increase had been expected by the consensus. This follows the previous month's increase of 13.2%.
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This is a busy week of U.S. economic data, highlighted by the latest FOMC meeting of the Federal Reserve on that began on Tuesday and ends Wednesday, the gross domestic product report on Wednesday and the Labor Department's jobs report on Friday. Other key U.S. reports are scattered throughout the week. On Thursday there is also important manufacturing data coming out of China. Markets will likely be impacted by this week's heavy slate of economic data.
Bullion prices ended lower at Comex on Tuesday, 29 April 2014. Gold futures settled lower on Tuesday for a second session in a row, pressured by a rise in U.S. equities as traders assessed data showing a gauge of U.S. consumer confidence for April fell short of forecasts, but the reading for March was revised to its highest level since 2008.
Gold for June delivery fell $2.70, or 0.2%, to settle at $1,296.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices were trading just under $1,299 shortly before the consumer confidence data were released. The July contract for silver lost 8 cents, falling less than 1% to $19.54 an ounce.
Crude Oil futures extended their gains into a second straight session on Tuesday, 29 April 2014 but failed to settle above $102 a barrel as traders kept an eye on tensions surrounding Ukraine ahead of weekly data expected to show a climb in U.S. crude inventories. Crude oil for June delivery rose 44 cents, or 0.4%, to settle at $101.28 a barrel on the New York Mercantile Exchange, adding to a 0.2% gain scored in Monday's session.
Tensions between Russia and Ukraine are again stoking concerns of possible disruptions to oil supplies from Russia.
Treasuries finished the session with slim gains, punctuating their session-long retreat from overnight lows. As a result, the benchmark 10-yr yield slipped one basis point to 2.69%.
Participation was essentially in line with average as 724 million shares changed hands at the NYSE floor.
Indian ADRs ended mixed on Tuesday. In the banking space, ICICI Bank ADR was up 0.05% at $43.40 and HDFC Bank gained 0.51% at $39.75. In the IT space, Infosys ADR rose 0.66% at $53.27 and Wipro was down 0.5% at $11.97. In the other sectors, Tata Motors was unchanged at $37.17 and Dr Reddy's Laboratories declined 0.25% at $44.62.
Tomorrow, the weekly MBA Mortgage Applications Index will be released at 7:00 ET and the ADP Employment Change for April (consensus 215,000) will be announced at 8:15 ET. The advance reading of Q1 GDP (consensus 1.0%) will be released at 8:30 ET, while the Chicago PMI report (consensus 56.5) for April will cross the wires at 9:45 ET. Finally, the Federal Open Market Committee will release its latest policy directive at 14:00 ET.
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