Benchmarks closed in the green
yesterday propelled by better-than-expected housing data. This was
the third-consecutive trading day that the markets secured a seat
in the positive zone. However, disappointing earnings results from
certain tech bellwethers eroded some of the day’s gains. The
housing and energy sectors were the leading gainers among the
S&P 500 industry groups.
The Dow Jones Industrial Average
(DJI) rose 0.04% to close the day at 13,557. The Standard &
Poor 500 (S&P 500) climbed 0.4% to finish yesterday’s trading
session at 1,460.91. The tech-laden Nasdaq Composite Index added
0.1% to end at 3,104.12. The fear-gauge CBOE Volatility Index (VIX)
declined 1.0% to settle at 15.07. Consolidated volumes on the New
York Stock Exchange, American Stock Exchange and Nasdaq were
roughly 6.3 billion shares, slightly lower than the year-on-year
daily average of 6.51 billion shares. For every two stocks that
gained on the NYSE, one closed in the red.
The big news for the day was the
sharp increase in housing starts. A report from the U.S. Census
Bureau and the Department of Housing and Urban Development revealed
that privately owned housing starts increased by 15.0% from August
to an annual rate of 872, 000 in September. This was well above
consensus estimates of 769,000. Housing starts recorded the
quickest pace of increase since July 2008. In addition, single
family housing starts increased by 11.0% from August to 603,000.
The data also revealed that building permits for privately-owned
housing units had jumped 11.6% from August to a seasonally adjusted
annual rate of 894,000 in September. Single-family authorizations
came in at 545,000 in September, up 6.7% from August.
The unexpected increase in housing
starts provided a boost to the housing sector. The SPDR S&P
Homebuilders gained 1.9% after the report. Stocks such as
PulteGroup, Inc. (NYSE:PHM), The Ryland Group, Inc. (NYSE:RYL), KB
Home (NYSE:KBH), Beazer Homes USA, Inc and M.D.C.
Holdings, Inc. jumped 5.3%, 4.1%, 8.7%, 5.4% and 2.7%,
respectively.
Meanwhile, shares of technology
bellwethers Intel Corporation (NASDAQ:INTC) and International
Business Machines Corp. (NYSE:IBM) tumbled following disappointing
earnings results. IBM’s shares tumbled 4.5% after a dull third
quarter. Earnings came in line, but revenues fell short of the
estimates. Revenues also declined 5.4% from the year-ago quarter
and all of the company’s operating segments suffered a downtrend.
On the other hand, Intel, the world’s largest chip maker, lost 2.5%
after providing a weak revenue outlook. Intel also said that sales
of personal computer will remain low during the holiday season.
Disappointing earnings results
dragged the technology sector into the red. The technology SPDR
lost 0.5% yesterday. Stocks such as Oracle Corporation
(NASDAQ:ORCL), Cisco Systems, Inc. (NASDAQ:CSCO), Juniper Networks,
Inc., Polycom Inc and Dell Inc (NASDAQ:DELL) lost 2.0. %, 0.8%,
1.0%, 1.3% and 0.5%, respectively.
Meanwhile, financial companies
reported a mixed set of earnings yesterday. Bank of America Corp
(NYSE:BAC), the second largest U.S. bank, reported
lower-than-expected results. However, The Bank of New York Mellon
Corporation (NYSE:BK) and U.S. Bancorp (NYSE:USB) came out with
better-than-expected quarterly figures. On the other hand, American
Express Company’s (NYSE:AXP) profits rose marginally and were in
line with estimates.
The financial sector finished in
the green and the Financial Select Sector SPDR rose 1.2%. Stocks
such as Bank of New York Mellon, Wells Fargo & Company, Morgan
Stanley (NYSE:MS), Goldman Sachs Group, Inc. (NYSE:GS) and U.S.
Bancorp jumped 5.5%, 2.2%, 3.5%, 1.4% and 1.8%, respectively.
The energy sector also garnered
decent gains yesterday and the Energy Select Sector SPDR rose 1.2%.
Stock such as Exxon Mobil Corporation (NYSE:XOM), Chevron
Corporation (NYSE:CVX), TOTAL S.A., BP plc (NYSE:BP) and Marathon
Oil Corporation rose 1.1%, 1.0%, 1.5%, 2.9% and 2.3%
respectively.
On the international front,
investors awaited the GDP report from the world’s second-largest
economy, China According to market experts, the county’s economic
growth has started to stabilize with an improvement in housing
starts, retail sales, manufacturing indices and construction
machinery sales.
AMER EXPRESS CO (AXP): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
BANK OF NY MELL (BK): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
KB HOME (KBH): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis Report
RYLAND GRP INC (RYL): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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