Traders focus on deal news and jobless claims data
US stocks ended on an upbeat note on Thursday, 29 May 2014 despite receiving some disappointing data ahead of the open. Investors shrugged off data showing the economy contracted in the first quarter and focused instead on better-than-expected jobless claims and deal news in the food industry.
The Dow Jones Industrial Average added 65.56 points, or 0.4%, to 16,698.74. The Nasdaq Composite ended the day up 22.87 points, or 0.5%, at 4,247.95. The S&P 500 rallied into the close and finished at its intraday record level, adding 10.25 points, or 0.5%, to 1,920.03.
All ten economic sectors ended higher led by consumer staples, healthcare and energy sectors.
The technology sector drew significant strength from the shares of Apple which gained 1.8%. The largest tech stock extended its May advance to 7.7%, while also giving a major boost to the Nasdaq Composite.
In corporate news, shares of Hillshire Brands soared 18% after Tyson Foods offered to buy the maker of Jimmy Dean sausage for $50 a share in cash, topping Pilgrim's offer of $45 a share. Tyson Foods shares rose 6.1%, putting it at the leading spot on the S&P 500.
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Trading was quieter overnight with many markets pausing as focus is turning to next week's monthly monetary policy meeting of the European Central Bank. It's widely believed the ECB will announce further monetary policy stimulus measures at that meeting. Recent weak European Union economic data and fears of deflation setting in for the EU are solid reasons for the ECB to make a move next week.
Latest US economic data showed today that first quarter GDP was revised down to -1.0% in the second estimate from a 0.1% gain in the advance estimate. GDP increased 2.6% in Q4 2013. Almost the entire revision was due to weaker inventory data. Excluding inventories, real final sales were virtually unchanged in the second estimate, up 0.6% vs. a 0.7% gain in the advance estimate. Real final sales are still well below 2013 levels.
The initial claims level fell to 300,000 for the week ending May 24 from a slightly upwardly revised 327,000 (from 326,000) for the week ending 17 May. The consensus expected the initial claims level to fall to 318,000. Layoff levels are showing no signs of stability.
Pending home sales for April rose 0.4%, which was worse than the 1.0% increase forecast by the consensus. Today's reading followed last month's unrevised increase of 3.4%.
Bullion prices ended 0.2% lower at Comex on Thursday, 25 May 2014. Gold futures suffered their fourth straight losing session on Thursday dropping to four month lows. On the economic front, U.S. data was mostly upbeat, pressuring prices for gold as they dulled the metal's safe-haven appeal.
Gold for August delivery fell $2.60, or 0.2%, to settle at $1,257.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices have now tallied a four-session loss of roughly 3% and based on the most-active contracts. July silver on Thursday also lost 4.5 cents, or 0.2%, to $19.01 an ounce after a dip below the $19 level.
Crude oil futures settle higher on Thursday, 29 May 2014 at Nymex for their first session gain in three after U.S. government data revealed strong demand for fuel. Prices rose despite a rise in weekly crude inventories that was bigger than the market expected.
July crude climbed 86 cents, or 0.8%, to settle at $103.58 a barrel on the New York Mercantile Exchange. It was trading at around $103.06 before the inventory data.
Early Thursday, the U.S. Energy Information Administration said crude stockpiles rose 1.7 million barrels for the week ended 23 May 2012. Market had forecast a climb of 1 million barrels. Supply data were released a day later than usual due to last Monday's Memorial Day holiday.
Participation remained light as only 532 million shares changed hands at the floor of the New York Stock Exchange.
Tomorrow, Personal Income (consensus 0.3%), Personal Spending (consensus 0.2%), and Core PCE Prices (expected 0.2%) will all be released at 8:30 ET, while the Chicago PMI report for May (consensus 60.3) will cross the wires at 9:45 ET. The day's data will be topped off with the final reading of the May Michigan Consumer Sentiment Survey (expected 81.4), which will be released at 9:55 ET.
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