The Nasdaq Composite outperformed other indexes with support from biotech stocks and Apple
U.S. stocks ended Tuesday's choppy session with marginal gains on 20 January 2015, as technology stocks led advances. The main benchmarks turned big early losses into gains, only to end roughly where they started the session. Equity indices started the day with modest gains, but continued weakness in crude oil weighed on the overall risk tolerance and contributed to an early retreat. However, a handful of influential sectors were able to withstand the selling pressure, which in turn became a supportive factor during afternoon action. U.S. markets were closed on Monday in observance of the Martin Luther King Jr. holiday.
The Dow Jones Industrial Average ended with a marginal gain of 3.66 points to 17,515.23. The Nasdaq Composite outperformed other indexes, adding 20.46 points, or 0.4%, to 4,654.85. The S&P 500 closed 3.13 points, or 0.2%, higher at 2,022.55, with technology stocks in the lead.
Intraday volatility reflects uncertainty about the monetary policy in Europe, with investors appearing skeptical about the ability of central banks to combat deflationary forces. The European Central Bank is widely expected to announce a government-bond-buying program on Thursday.
The biotech group also bolstered the Nasdaq and helped the index settle ahead of the broader market. To be sure, the Nasdaq received another measure of support from its top-weighted components, including Apple which spiked 2.6%.
In economic news, a gauge of confidence among home builders ticked down this month by one point to 57, staying close to the highest level since late 2005, according to National Association of Home Builders/Wells Fargo data released Tuesday morning. Readings above 50 signal that builders, generally, are optimistic about sales trends.
Among stocks under focus, Netflix shares soared 12% in aftermarket trade, after profits surged past estimates and provided an upbeat outlook for net subscriber additions. Delta Air Lines shares jumped 7.3% after the company beat estimates, reporting fourth-quarter revenue of $8.24 billion.
Shares of Halliburton rose 1.8% after the company reported better-than-expected results but warned that 2015 could be a challenging year for the oil-field services company, which is planning to acquire Baker Hughes. Consumer-products heavyweight Johnson & Johnson beat profit expectations, but sales fell shy of estimates. Shares fell 2.6%.
Twitter in a blog post Tuesday said it's buying India-based mobile-marketing company ZipDial for an undisclosed sum. Shares rose 0.7%.
Bullion metals ended higehr at Comex on Tuesday, 20 January 2015. More safe-haven demand and chart-based buying propelled the gold market to a 5.5-month high Tuesday. This week is an extra important one for the market place and many traders and investors are anxious. The coming days will see critical fundamental news, and price action in many markets could be extra volatile as the week progresses. Also supportive for gold prices are reports that said demand for gold exchange traded funds (EFTs) has significantly increased recently.
Gold for February delivery settled up $17.30, or 1.4%, at $1,294.20 an ounce, on the New York Mercantile Exchange. The seven-day rally has resulted in a 7.1% rise in gold prices. In January, gold is up 9.3%. That follows depressed prices toward the end of 2014 due to year-end tax-loss selling. March silver futures advanced 21 cents, or 1.2%, to settle at $17.96 an ounce.
In overnight news, the International Monetary Fund downgraded its 2015 world economic growth forecast by 0.3%, to 3.5%. The IMF cited major currencies' depreciation against the U.S. dollar as a negative world economic growth factor.
China on Tuesday reported its 2014 GDP came in at 7.4% growth, which is the weakest annual reading in many, many years. However, fourth-quarter China GDP was reported up 7.3%, year-on-year, which was better than expected. China also received an upbeat industrial production report Tuesday. The market place read this latest China data as a mixed bag.
Crude-oil futures settled sharply lower on Tuesday, 20 January 2015 at Nymex as investors weighed a batch of downbeat views on global economic growth, including news that China's economy expanded at its slowest pace in decades. Crude futures for delivery in February fell $2.30, or 4.7%, to end at $46.39 a barrel. Oil resumed its losing ways after finishing Friday with a weekly gain, snapping a seven-week streak of declines. U.S. crude prices fell after Iraq said it's producing a record amount of crude. Iran's oil minister, meanwhile, said that his country could withstand $25-a-barrel oil.
On Thursday the European Central Bank holds its monthly monetary policy meeting. France's president revealed on Monday the ECB will announce a quantitative easing plan at Thursday's meeting. Many had already expected the ECB to make its monetary policy stimulus move at this meeting.
Treasuries notched their highs around 11:00 ET before spending the remainder of the session in a steady retreat. The 10-yr yield ended lower by five basis points at 1.79%.
Participation was a bit above average with more than 840 million shares changing hands at the NYSE floor.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while December Housing Starts (consensus 1.04 million) and Building Permits (consensus 1.06 million) will be reported at 8:30 ET.
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