Quarterly performance for the main indices remain mixed
The U.S. stock market closed higher on Monday, 31 March 2014 while quarterly performance for the main indices was mixed. Equity indices made the bulk of their advance during the opening hour before spending the remainder of the session inside narrow ranges.
The Dow Jones Industrial Average jumped 134.60 points, or 0.8%, to 16,457.66 and is 0.8% higher on the month. However, the blue-chip index lost 0.7% over the past quarter. The Nasdaq Composite finished the day up 43.24 points, or 1%, at 4,198.99. The tech-heavy index is down 2.5% for the month, its worst performance since October 2012. It still managed to eke out a 0.5% quarterly gain. The S&P 500 ended the day 8.41 points, or 0.5%, higher at 1,872.34, and recorded a 0.7% gain for the month. The benchmark index extended its quarterly winning streak, gaining 1.3% over the past three months.
Financials, industrials, and technology sectors outperformed while the discretionary sector lagged.
Fed Chairwoman Janet Yellen spoke at a gathering in Chicago and said the U.S. central bank needs to keep interest rates extremely low to prop up the still very shaky U.S. jobs market. Traders and investors are awaiting a heavy slate of U.S. economic data due out this week, capped by the jobs report on Friday.
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In overnight news, the annual inflation rate in the European Union rose by 0.5%, year-on-year, which is the lowest rate since 2009. This reading is well below the 2% annual inflation target set by the European Central Bank. The latest inflation report is another clue the ECB will implement more monetary policy stimulus at some point soon. The ECB holds its monthly monetary policy meeting on Thursday, including a press conference by ECB president Mario Draghi. Market expectations are that the ECB will not change its monetary policy at Thursday's meeting.
Russia's annexation of the Crimea region of Ukraine remains a geopolitical tension, but not quite a front-burner markets issue at this time.
Today's economic data at Wall Street was limited to the Chicago PMI for March, which fell to 55.9 from 59.8 while the consensus expected an increase to 60.1. After three consecutive months above 60, the Chicago PMI fell to into the 59 range in January and February. At the time, severe winter weather conditions were blamed for the weakness in the PMI. As temperatures returned to normal, the consensus assumed manufacturing activities would return to their Q4 2013 levels, but that did not happen. A sharp drop in new orders (58.8 from 63.6) led to an overall pullback in manufacturing activities. Production, meanwhile, managed to improve to 61.7 from 59.6 as manufacturers worked down their backlogs (50.4 from 53.7).
Among major stocks under focus, General Motors lost 0.9% after reports that the company accepted ignition switches from its supplier even though the parts did not meet standards set by the company. Cigna shares climbed 5.4%. Analysts at J.P. Morgan on Monday raised the stock's price target to $96 from $93. Shares of Johnson & Johnson rose 0.8% after agreeing to sell its Ortho-Clinical Diagnostics unit to the Carlyle Group for about $4 billion in a deal that's expected to close in the middle of the year.
Bullion prices ended with losses on Monday, 31 March 2014. Gold prices ended the U.S. day session lower, near the daily low and hit a seven-week low on this last trading day of the month and the quarter. Not even dovish comments from Federal Reserve Chair Janet Yellen at a speech Monday could help out the beleaguered yellow metal. Gold futures settled on Monday with a loss for a fourth session in a row with a slew of economic reports expected to create some volatile sessions throughout the week.
Gold for June delivery fell $10.50, or 0.8%, for the session to settle at $1,283.80 an ounce on the Comex division of the New York Mercantile Exchange. Prices for the precious metal were 2.9% lower for the month, but logged a gain of 6.8% for the first quarter and year to date. May silver, which had endured a nine-session losing streak until Friday, fell almost 4 cents, or 0.2%, to $19.75 an ounce with prices, also tracking the most-active contracts, down 7% for the month, but up about 2% for the quarter and year.
Crude oil futures settled modestly lower on Monday, 31 March 2014 as disappointing data on Chicago-area businesses contributed to a pullback in prices from a nearly three-week high, but hopes for stimulus measures from China provided support, helping the commodity score a quarterly rise. Crude oil for May delivery fell 9 cents, or 0.1%, to settle at $101.58 a barrel on the New York Mercantile Exchange. Based on the most-active contracts, crude futures fell 1% for the month, but gained of 3.2% for the quarter and year to date.
Participation was above average with month-end flows contributing to the strong volume as more than 820 million shares changed hands at the NYSE.
Indian ADRs ended higher on Monday. In the IT space, Infosys rose 0.46% at $54.18 and Wipro gained 1.9% at $13.40. In the banking space, ICICI Bank was up 0.05% at $43.80 and HDFC Bank jumped 1.58% at $41.03. In the other sectors, Tata Motors added 2.4% at $35.41 and Dr Reddy's Laboratories was down 0.11% at $43.90.
Tomorrow, the ISM Index for March (consensus 54.0) and February Construction Spending (consensus 0.1%) will both be reported at 10:00 ET.
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