Fourth quarter GDP revised down from 3.2% to 2.4%
U.S. stocks saw a mixed finish on Friday, 28 February 2014 but ended February with strong monthly gains. The early advance occurred after the release of several data points that were cast in a bullish light. Stocks saw some pressure late in the session as Ukraine officials accused Russia of sending troops into the Crimea region.
The Dow Jones Industrial Average added 49.06 points, or 0.3%, to 16,321.71. The blue-chip index rose 1.4% on a weekly basis. The index saw a February rise of 4%, its largest monthly%age gain since January 2013.
The Nasdaq Composite was unable to shake off late pressure, ending with a loss of 10.81 points, or 0.3%, at 4,308.11. That cut the index's weekly rise to 1.6%. The Nasdaq rose 5% over the course of the month, its biggest monthly gain since September 2013.
The S&P 500 ended the day up 5.16 points, or 0.3%, at 1,859.45. The benchmark index, which turned positive for the year on Thursday, posted a 1.3% weekly gain, bringing its February rise to 4.3%.
Earlier, investors shrugged off a sharp cut in the estimate of fourth-quarter U.S. economic growth that nonetheless matched expectations and focused on better-than-expected readings from Chicago PMI and consumer-sentiment reports.
The afternoon weakness came about after multiple reports indicated that Russian troops have increased their presence in Crimea, which is located in Southern Ukraine.
Economic data included four reports on Friday. Fourth quarter GDP was revised down from 3.2% to 2.4% in the second estimate while the consensus expected GDP to be revised down to 2.6%. The important takeaway is that real final sales, which were revised down to 2.3% from 2.8%, now show absolutely no breakout from trends that go back to Q1 2012.
The Chicago PMI for February increased to 59.8 from 59.6 while the consensus expected a decline to 56.0. Analysts have been quick to point to extreme winter weather conditions as the culprit for the recent poor economic data trends. Yet, the blustery weather in February had absolutely no effect on Chicago-area manufacturers. This is another data point suggesting the weather is being used as a scapegoat during a cyclical down period.
The final University of Michigan Consumer Sentiment Index for February was revised up to 81.6 from 81.2 while the consensus expected an increase to 81.5. While the index moved in the opposite direction from the Conference Board's Consumer Confidence index, overall sentiment trends were relatively flat this month. Gains in equity prices offset slightly weaker employment conditions. Changes in gasoline prices and media reports likely had little effect on overall confidence values. The Current Conditions Index strengthened to 95.4 in the final reading from 94.0 in the preliminary. The Expectations Index was revised down to 72.7 from 73.0.
Pending home sales for January rose 0.1%, which was worse than the 0.8% increase forecast by the consensus. Today's reading followed last month's revised decrease of 5.8% (from -8.7%).
Elsewhere, Treasuries reclaimed a large portion of their morning losses. The benchmark 10-yr yield ended higher by two basis points at 2.66% after notching a session high at 2.70%.
Participation was above average with 944 million shares changing hands at the NYSE.
Indian ADRs saw selling pressure on Friday. Among technology stocks, Wipro declined 2.68% to $13.80 per ADR while Infosys was unchanged at $61.67. In the banking space, private sector lender ICICI Bank climbed 1.22% to $35.68, but its rival HDFC Bank was down 0.06% to $33.59. Among others, commercial vehicle maker Tata Motors slipped 0.49% to $34.88 and healthcare company Dr Reddy's Labs dropped 3.61% to $45.90.
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