Eight of ten sectors end in the green led by consumer staples and technology sectors
US stocks ended solidly higher on Thursday, 27 February 2014. The benchmark S&P 500 closed at a fresh record on Thursday, as investors welcomed dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee. Stocks climbed throughout the session despite starting the day on a cautious note. The early weakness could be traced to European markets, which were pressured by news of renewed tensions in the pro-Russian region of Crimea in Southern Ukraine.
The Dow Jones Industrial Average ended the session 74.30 points, or 0.5%, higher at 16,272.71. The Nasdaq Composite closed higher by 26.87 points, or 0.6%, to 4,318.93. The S&P 500 finished the day 9.13 points, or 0.5% higher at 1,854.29.
Eight of ten sectors ended in the green led by consumer staples and technology sectors while energy and utilities sectors posted modest losses.
Stocks climbed throughout the session despite starting the day on a cautious note. The developments weighed on European equities and contributed to a risk-off sentiment in the foreign exchange market where the yen strengthened notably against all major currencies.
The crisis in Ukraine is still a worry to the market place. The country is on the verge of financial collapse and needs funding soon from outside sources.
The Federal Reserve is likely to maintain its strategy of gradually trimming asset purchases even as it takes time for the job market to recover. Yellen's speech to the U.S. Senate Banking Committee Thursday morning was not much different from her remarks to a House of Representatives panel a few weeks ago. However, she did in Thursday's remarks mention some recent weaker U.S. economic data. Such might make the U.S. central bank less aggressive in winding down its quantitative easing program that has been in place for several years, but which just recently has been scaled back. Traders and investors were looking for any clues regarding future monetary policy moves by the Federal Reserve, including the pace of the Fed's tapering of its monthly bond-buying program. Yellen's speech was originally scheduled for a couple weeks ago, but was postponed due to inclement weather.
U.S. economic data released Thursday included the weekly jobless claims report, durable goods orders, and the Kansas City Fed manufacturing survey. Taken together, this latest data again favored the weak side of market expectations. Initial claims increased to 348,000 from a downwardly revised 334,000 (from 336,000) while the consensus pegged the initial claims level at 335,000. It was likely that the Presidents' Day holiday negatively impacted the seasonal adjustments last week.
Regarding durable goods, orders fell 1.0% in January after declining a downwardly revised 5.3% (from -4.2%) in December. The consensus expected durable goods orders to fall 1.0%. A big drop in aircraft orders (-7.2%) pulled overall transportation demand down 5.6%. Excluding transportation, orders increased 1.1% after falling a downwardly revised 1.9% (from -1.3%) in December. The consensus expected these orders to decline 0.2%.
Among stocks under focus at Wall Street, J.C. Penney jumped 25% to $7.47, after making gains late Wednesday on better-than-expected results. Sears Holdings rose 6.5% after the retailer said its losses narrowed compared with the same period a year ago. Best Buy shares rose as much as 7% after the retailer said it swung to a fourth-quarter profit , beating forecasts, however, gains fizzled out and shares closed 1% lower.
Bullion prices ended 0.3% higher at Comex on Thursday, 27 February 2014. Gold futures finished higher on Thursday as tensions in the Ukrainian political conflict contributed to higher safe-haven demand and remarks from Federal Reserve Chairwoman Janet Yellen to the US Congress. Gold also got a boost on the back of a climb in weekly U.S. jobless claims and decline in monthly durable goods orders.
Gold for April delivery gained $3.80, or 0.3%, to settle at $1,331.80 an ounce on the Comex division of the New York Mercantile Exchange. Prices rebounded after falling 1.1% on Wednesday. March silver settled at $21.31 an ounce, up 6 cents, or 0.3%, after briefly pulling back earlier. Prices for the metal lost 3.2% on Wednesday.
Crude oil futures closed slightly lower on Thursday, 27 February 2014 as the market assessed U.S. data from a day earlier showing a smaller-than-expected weekly climb in U.S. crude supplies and a surprise rise in distillate stockpiles. Crude-oil futures for April delivery fell 19 cents, or 0.2%, to settle at $102.40 a barrel on the New York Mercantile Exchange.
Strikingly, Treasuries finished the session on their highs with the benchmark 10-yr yield down two basis points at 2.65%.
Participation was a bit below average as 683 million shares changed hands at the NYSE.
Indian ADRs ended mostly higher on Thursday. In the IT space, Infosys gained 0.8% at $61.67 and Wipro was flat at 14.18. In the banking space, ICICI Bank jumped 1.64% at $35.25 and HDFC Bank was down 0.09% at $33.61. In the other sectors, Tata Motors advanced 3.64% at $35.05 and Dr Reddy's Laboratories added 0.46% at $47.62.
Tomorrow, the second estimate of Q4 GDP will be released at 8:30 ET while the Chicago PMI for February will cross the wires at 9:45 ET. The final reading of the Michigan Sentiment survey for February will be reported at 9:55 ET while the Pending Home Sales report for January will be released at 10:00 ET.
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