Dow ends lower for first time in seven sessions
U.S. stocks ended Monday's session marginally lower on 23 June 2014, with the S&P 500 and Dow Jones Industrial Average pausing after six straight days of modest gains. Equity indices started the day in the red and maintained narrow ranges throughout the session. The S&P 500 tried to regain its flat line shortly after the open, but could not do so as three influential sectors weighed.
Specifically, consumer staples, health care and industrials slumped out of the gate and pressured the market throughout the session. Technology and energy sectors registered gains.
The Dow industrials shed 9.82 points, or 0.1%, to 16,937.26. The Nasdaq Composite ended the day less than a point higher at 4,368.68. The S&P 500 closed less than a point lower at 1,962.61.
Meanwhile, large cap tech names held up well with the likes of Microsoft, Google and Oracle climbed between 0.7% and 1.4%.
Oracle agreed to buy Micros Systems for $5.3 billion in cash. Oracle shares were 0.7% higher. Micros shares rose 3.4%
Like the high-beta biotech space, chipmakers also displayed relative weakness after Advanced Micro Devices and NVIDIA were both downgraded to 'Underperform' at Pacific Crest. The two stocks lost 2.2% and 1.2%, respectively.
U.S. economic data due for released on Monday included the Chicago Fed's national activity index and the U.S. flash manufacturing purchasing managers' index. Neither report had much of an impact on the market place. Existing home sales increased 4.9% in May to a seasonally adjusted annualized rate of 4.89 million from an upwardly revised 4.66 million (from 4.65 million ) in April. The consensus expected existing home sales to increase to 4.80 million.
Mortgage rates, which had been moving higher for most of 2014, fell sharply over the last couple of months and helped boost sales growth, but year-over-year sales are still 5.0% below May 2013 levels. Also, purchases by first-time home buyers accounted for only 27% of all sales in May. That was down from 29% in April. First-time home buyers typically account for a third of home purchases during periods of normal sales trends.
In overnight world developments, the China HSBC preliminary manufacturing purchasing managers index came in at 50.8 in June versus 49.4 in May. This is the first time the reading has been above 50.0 this year. A reading above 50.0 suggests expansion. This news is a bullish underlying factor for the raw commodity sector, as China is the world's largest importer of raw commodities.
Meantime, the European Union's Markit manufacturing and services PMI came in at 52.8 in June versus 53.5 in May. France was the main weak spot in the report and the reading did not meet market expectations.
It was mixed finish for bullions on Monday, 23 June2014. Gold prices ended the U.S. day session slightly higher on Monday. But silver slipped. The civil war in Iraq remains a bullish market factor for safe-haven gold.
Gold futures inched higher on Monday, adding slightly to gains after last week's advance of 3.3%. Gold for August delivery added $1.80, or 0.1%, to settle at $1,318.40 an ounce on the Comex division of the New York Mercantile Exchange. July silver pulled back by 3 cents, or 0.2%, to end at $20.92 an ounce.
Oil prices fell at Nymex on Monday, 23 June 2014 but losses stayed limited as traders kept an eye on the latest Iraq headlines. Crude for August deliver contract pulled back 77 cents, or 0.7%, to $106.06 a barrel.
Participation remained on the light side with just under 560 million shares changing hands at the NYSE floor.
Indian ADRs ended mostly higher on Monday. In the banking space, ICICI Bank added 1.9% at $49.91 and HDFC Bank gained 1.46% at $47.13. Among the IT name, Infosys declined 2.09% at $53.47 and Wipro shed 1.98% at $11.40. In the other sectors, Tata Motors rose 0.41% at $39.02 and Dr Reddy's Laboratories was up 0.74% at $40.89.
Tomorrow, the Case-Shiller 20-city Index (consensus 11.6%) and FHFA Housing Price Index will both be released at 9:00 ET, while New Home Sales for May (consensus 440K) and June Consumer Confidence (consensus 84.0) will be released at 10:00 ET.
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