All ten sectors posted gains led by materials and utilities
U.S. stocks closed higher on Thursday, 13 February 2014 as investors focused on upbeat earnings and deal news and shrugged off weak economic data. The Nasdaq Composite rose for the sixth consecutive session, its longest winning streak in two months. Weaker-than-expected retail sales in January and a surprise uptick in weekly jobless claims set a gloomy tone at the market open, but indexes quickly reversed losses and moved higher.
The Dow Jones Industrial Average added 63.65 points, or 0.4%, to 16,027.59. The Nasdaq Composite rose 39.38 points, or 0.9%, to 4,240.67. The S&P 500 closed 10.57 points, or 0.6%, higher at 1,829.83.
All ten sectors posted gains with materials and utilities ending in the lead.
U.S. economic data released Thursday favored the weaker side of expectationsespecially a downbeat retail sales report, and that also was a positive for the precious metals markets. Recent weaker U.S. economic data bolsters notions the Fed will be constrained in its efforts to taper its monthly bond buying (called quantitative easing). The specter of tapering has been a bearish underlying factor for the raw commodity sector the past few months.
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Retail sales fell 0.4% in January after declining a downwardly revised 0.1% (from +0.2%) in December. The consensus expected no growth in January. The report was discouraging and many are going to point to extreme winter weather conditions as the primary cause for the larger-than-expected decline. That scenario holds some truth as sectors that are normally affected by weather conditions such as motor vehicle sales (-2.1%) and restaurants (-0.6%) saw significant pullbacks. However, spending in general was weaker across the board. That could signal that the spending out of savings that occurred in December was a one-time event related to the holidays and not the start of a new trend.
The weekly initial claims level increased to 339,000 from an unrevised 331,000 while the consensus expected an increase to 335,000. Business inventories increased 0.5% in December after increasing 0.4% in November while the consensus expected an increase of 0.4%. Total inventories consist of manufacturers, merchant wholesalers, and retails. Both manufacturers (0.5%) and wholesaler (0.3%) inventories were announced prior to the total inventory release. The only unknown was retailer inventories, which increased 0.6% in December after increasing 0.8% in November.
Among major stocks under focus on Thursday, Time Warner Cable climbed 7% on news that Comcast will buy TWC for $45.2 billion in a deal that would combine the two biggest U.S. cable operators. Comcast shares fell 4.1%.
Goodyear Tire & Rubber rallied 11% after the company reported a larger fourth-quarter profit and beat estimates. Cisco Systems fell 2.5% after the networking-equipment company late Wednesday said its fiscal second-quarter profit fell.
Only 627 million shares changed hands at the NYSE floor versus a 200-day average of 717 million.
Bullion prices ended 0.4% higher on Thursday, 13 February 2014. Gold futures topped $1,300 an ounce on Thursday, marking the highest close in more than three months as a bigger-than-expected fall in January U.S. retail sales and a rise in weekly jobless claims helped fuel weakness in the dollar and lured investors to the perceived safety of the precious metal.
Gold for April delivery tacked on $5.10, or 0.4%, to settle at $1,300.10 an ounce on the Comex division of the New York Mercantile Exchange after a high of $1,301.60. March silver added 5 cents, or 0.3%, to $20.395 an ounce following eight-straight session of gains.
Crude oil prices closed barely lower on Thursday, 13 February 2014 holding ground above $100 a barrel as traders weighed oil-demand prospects, which were mostly downbeat. A weaker U.S. dollar provided some support for the commodity's dollar-denominated prices. March crude oil fell 2 cents to settle at $100.35 a barrel on the New York Mercantile Exchange.
Tomorrow, January export prices ex-agriculture and import prices ex-oil will be released at 8:30 ET while Industrial Production and Capacity Utilization for January will be announced at 9:15 ET. The day's data will be topped off by a 9:55 ET release of the preliminary Michigan Consumer Sentiment survey for February.
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