Decline in global PC shipments hit the technology sector
US stocks ended with strong gains on Thursday, 11 April 2013. Stocks rose on Thursday and extended record gains into a fourth day, with retailers reporting improved sales and technology shares hit in the wake of a decline in computer sales. The technology-laden Nasdaq Composite added the least gains though.
For the day, the Dow ended higher by 62.9 points (0.4%) at 14,865.14. Nasdaq ended higher by 2.91 points (0.09%) at 3,300.16. S&P 500 ended higher by 5.64 points (0.4%) at 1,593.37.
Excluding technology, the other nine sectors ended with gains as health care and consumer discretionary stocks paced today's advance.
Twenty five of its 30 components finished in positive terrain, led by Pfizer.
Manufacturers of computer hardware and software were hit, however, after a report late Wednesday that had PC shipments declining 14% worldwide during the first three months of 2013 versus the year-ago period. The decline marked the steepest quarterly fall since International Data Corp. began compiling the statistics in 1994.
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Goldman Sachs downgraded Microsoft to sell from neutral, pointing to the worsening trends for PCs and the software maker's poor performance in the tablet market.
The three computer-related components on the Dow Jones Industrial Average led losses among the blue chips, with Hewlett-Packard, Microsoft and Intel all sliding between 2% to 4%.
Retailers were among those rallying, with shares of Limited Brands up after the owner of the Victoria's Secret chain reported same-store sales climbed 3% last month. Ross Stores jumped after the discount chain said improved sales in March would probably lift profits above its prior estimate.
Rite Aid gained after the drugstore chain reported its first yearly profit since 2007.
Looking at the day's economic data, weekly initial claims were reported at 346,000, which was ahead of the consensus estimate which expected claims to come in at 365,000.
Another report showed that export prices, excluding agriculture, decreased by 0.2% in March after they had increased 0.6% during the prior month. Excluding oil, import prices declined 0.2%, which follows last month's unchanged reading.
In overnight news, Philadelphia Federal Reserve Bank President Charles Plosser said in a speech in Tokyo the Fed should start winding down its bond-buying program (quantitative easing) and be completely done with it by the end of the year. The FOMC minutes released Wednesday showed Fed officials are debating on when to shut the bond-buying program down.
The Japanese stock market hit a four-year high on Thursday in the wake of the recent aggressive monetary easing by the Bank of Japan. The U.S. dollar hit a four-year high versus the yen overnight as the BOJ works to devalue its currency. The European Central Bank has also hinted it may further lower its interest rates in an effort to devalue its currency.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.3%.
Crude-oil prices ended substantially lower on Thursday, 11 April 2013 at Nymex. Prices fell despite a weak dollar and better than expected initial claims data after International Energy Agency cut its outlook for global oil-demand growth. Light and sweet crude for May fell by $1.13 or 1.2% to settle at $93.51 a barrel on the New York Mercantile Exchange on Thursday. Prices fell for first time in five sessions.
Thursday's losses came as the International Energy Agency cut its outlook for global oil-demand growth to 795,000 barrels a day from a previous forecast of 820,000 barrels a day, adding to existing worries that demand is fading. The forecast cut reflected weak demand from industrialized countries and in particular Europe, where consumption in 2013 is expected to be the lowest since the 1980s. Latest report showed that oil production from the Organization of the Petroleum Exporting Countries fell by 170,000 barrels per day in March from a month earlier to 30.25 million barrels per day.
Bullion metal prices ended higher on Thursday, 11 April 2013. Prices traded higher due to a weak US dollar. The weekly U.S. jobless claims report was released on Thursday morning and showed a bigger decline in claims than expected, but the data had little impact on the metals.
Gold for June delivery ended higher by $6.1 or 0.4% at $1,564.9 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. Prices had shed almost 2% a day earlier. May silver ended higher by 4 cents (0.2%) at $27.7 an ounce on Thursday.
For every two stocks on the decline more than three advanced on the New York Stock Exchange, where 643 million shares traded. Composite volume surpassed 3.3 billion.
Indian ADRs ended mixed on Thursday. In the IT space, Infosys was up 2.5% and Wipro was down 0.5%. In the Banking space, HDFC Bank was up 0.9% and ICICI Bank was up 1.3%. In the Telecom space, Tata Communication was up 0.4%. In other space, Tata Motors was down 1%, Dr Reddys was down 2.4% and Sterlite was down 1.5%.
Tomorrow, March retail sales, retail sales ex-auto, PPI, and core PPI will all be reported at 8:30 ET. In addition, the preliminary University of Michigan Consumer Sentiment Survey for April as well as February business inventories will be released at 9:55 ET and 10:00 ET, respectively.
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