Twenty seven out of thirty Dow components end higher for the day
US stocks ended with good gains on Thursday, 02 May 2013. Stocks rose after the European Central Bank cut its benchmark interest rate and U.S. jobless claims unexpectedly declined to a five-year low. In addition to earnings reaction, investors welcomed further easing from the European Central Bank as the ECB cut its key interest rate by 25 basis points to a record low of 0.50%
For the day, the Dow ended higher by 130.63 points (0.9%) at 14,831.58. Nasdaq ended higher by 41.49 points (1.3%) at 3,340.62. S&P 500 ended higher by 14.89 points (0.94%) at 1,597.59.
Technology led gains and utilities proved the weakest performer among its 10 major sectors. Twenty seven out of thirty Dow components ended higher for the day.
. Shares of Intel edged higher after the Dow component and computer-chip manufacturer picked its chief operating officer, Brian Krzanich, to take the helm as CEO.
. GM shares gained more than 3% after reporting upbeat earnings. Electronic payment processor Visa jumped 5.7% after beating on earnings and revenue. In addition, social media stocks displayed significant strength after Facebook and Yelp reported above-consensus top-line results.
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The European Central Bank on Thursday cut its key interest rate by 0.25%, to 0.5%, which was expected by many market watchers. Recent weak EU economic data made the case for such action.
The Federal Reserve's policy-making committee's FOMC statement on Wednesday contained no major surprises. However, what was read as slightly bullish for the precious metals and for the raw commodity sector is that the Fed made no mention of a timeframe for winding down its quantitative easing program and said it could adjust its bond-buying up or down based on U.S. economic conditions. The market place now turns its attention to Friday morning's U.S. jobs report.
In Asian news overnight, the HSBC China manufacturing PMI came in at 50.4 in April versus 51.6 in March. This reading follows the official China government PMI reported Wednesday, which was also down from the previous month. The weakening China PMI data this week has been a bearish weight on the raw commodity sector.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, stayed steady on Thursday.
In today's economic data, the initial claims level dropped from an upwardly revised 342,000 (from 339,000) for the week ending April 20 to 324,000 for the week ending 27 April 2012. That was the lowest initial claims reading since January 2008. The consensus expected the initial claims level to increase to 346,000.
The U.S. trade deficit narrowed in March, falling from an upwardly revised $43.6 billion (from $43.0 billion) to $38.8 billion. The consensus pegged the deficit at $43.0 billion. Export levels fell $1.7 billion in March to $184.3 billion as large declines in foods (-$1.0 billion) and petroleum-based products (-$1.1 billion) outweighed gains in aircraft parts ($0.8 billion) and nonmonetary gold ($0.5 billion). Meanwhile, imports declined by $6.5 billion to $223.1 billion, with most of the drop occurring due to weaker demand for consumer goods (-$3.4 billion).
Also of note, nonfarm business labor productivity increased 0.7% in the preliminary first quarter reading after falling 1.7% (revised from -1.9%) during the fourth quarter. The consensus expected productivity to increase 1.2%. Output levels increased 2.5%, up from a 0.7% fourth quarter gain.
Bullion metal prices ended substantially higher on Thursday, 02 May 2013. Bullions ended the U.S. day session with solid gains on Thursday. Gold decided to act more like a raw commodity than a safe-haven asset on Thursday, as the raw commodity sector showed good price gains. Gold for June delivery ended higher by $21.4 (1.5%) at $1,467.6 an ounce on the Comex division of the New York Mercantile Exchange on Thursday. July silver ended higher by $0.49 cents (2.1%) at $23.83 an ounce on Thursday.
Crude-oil prices ended moderately lower on Thursday, 02 May 2013 at Nymex. Prices ended lower as investors awaited possible energy-demand clues from the latest monthly jobs report from the U.S. Light and sweet crude for June ended lower by $0.19 (0.2%) at $93.8 a barrel on the New York Mercantile Exchange on Thursday.
For every stock falling, more than three gained on the New York Stock Exchange, where 676 million shares traded. Composite volume neared 3.4 billion.
Indian ADRs ended higher on Thursday. In the IT space, Infosys was up 2.5% and Wipro was up 0.6%. In the Banking space, HDFC Bank was up 2.1% and ICICI Bank was up 0.8%. In the Telecom space, Tata Communication was up 0.24%. In other space, Tata Motors was up 0.41%, Dr Reddys was down 0.5% and Sterlite was up 2.3%.
Tomorrow, economic data will focus on jobs as April nonfarm payrolls, nonfarm private payrolls, the unemployment rate, hourly earnings, and average workweek will all be reported at 8:30 ET. In addition, March factory orders and April ISM Services Index will be released at 10:00 ET.
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