Benchmarks closed mixed on Thursday as investors took a cautious stance ahead of Fed Chair Janet Yellen’s comments expected today. Despite encouraging economic reports, two key U.S. indexes ended in the red. However, the Nasdaq managed to close in the green maintaining a three day winning stretch.
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The Dow Jones Industrial Average (DJI) decreased 0.1%, to close at 17,828.29. The S&P 500 fell 0.44 points to close at 2,090.10. However, the tech-laden Nasdaq Composite Index closed at 4,901.77, gaining 0.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.4% to settle at 13.43. A total of around 5.8 billion shares were traded on Thursday, significantly lower than the last 20-session average of 7.2 billion shares. Advancers outpaced declining stocks on the NYSE. For 50% stocks that advanced, 47% declined.
Investors remained cautious as it is speculated that the Fed Chairwoman Janet Yellen’s may comment on rate hikes and economic growth today in an award ceremony at Harvard University. This in turn had a mixed impact on the major benchmarks. While materials and financials stocks declined, utilities sector ended in positive territory.
The Materials Select Sector SPDR ETF (XLB) declined 1.1% and was the biggest loser among the S&P 500 sectors. Key holdings from this sector including CF Industries Holdings, Inc. (CF), Freeport-McMoRan Inc. ( FCX), LyondellBasell Industries N.V. (LYB), Monsanto Company (MON), E. I. du Pont de Nemours and Company ( DD) and Dow Chemical Company (DOW) fell 1.9%, 2.7%, 1.6%, 1.8%, 1.9% and 1.7%, respectively.
Additionally, the Financials Select Sector SPDR (XLF) also fell 0.6% and was the second biggest loser among the S&P 500 sectors. Top holdings from this sector such as Bank of America Corporation (BAC), Morgan Stanley ( MS) and Citigroup Inc. (C) decreased 1.5%, 1.3% and 1.8%, respectively. Dow components JPMorgan Chase & Co (JPM) and Goldman Sachs Group, Inc. ( GS) declined 0.8% and 1.3%, respectively.
However, the Utilities Select Sector SPDR (XLU) rose 1.1% and was the biggest gainer among the S&P 500 sectors. Key utilities stocks including PG&E Corporation (PCG), American Electric Power Co., Inc. ( AEP), Duke Energy Corporation (DUK) and Southern Company (SO) increased 1.6%, 1.4%, 1.3% and 1.4%, respectively.
Separately, recent production disruptions in Libya, Canada and Nigeria helped crude prices to cross the $50 per barrel mark, for the first time in seven months. However, oil prices finished below the mark following renewed crude oversupply worries. WTI crude and Brent crude decreased 0.2% and 0.3% to close at $49.48 a barrel and $49.59 per barrel, respectively. The Energy Select Sector SPDR (XLE) fell 0.4%. Dow components Exxon Mobil Corporation ( XOM) and Chevron Corporation (CVX) decreased 0.5% and 0.3%, respectively.
In economic news, the National Association of Realtors (NAR) reported that the Pending Home Sales Index increased 5.1% from March to 116.3 in April, reaching its highest level since Feb 2006. Last month’s increase was also significantly higher than the consensus estimate of 0.8% gain.
The U.S. Department of Commerce reported that durable orders increased 3.4% in April to $235.9 billion, as compared to a rise of 1.9% in March. It was also higher than the consensus estimate of 0.5% rise.
Also, the U.S Department of Labor reported that seasonally adjusted initial claims decreased 10,000 to 268,000 in the week ending May 21, falling to a month low. Initial claims were also less than the consensus estimate of 276,000.
In earnings news, Dollar Tree, Inc’s (DLTR) shares jumped 12.8% after its fiscal first quarter earnings of 89 cents per share surpassed the Zacks Consensus Estimate of 80 cents. Consolidated net sales of $5,085.8 million also beat the Zacks Consensus Estimate of $5,081 million. Further, Dollar Tree now anticipates consolidated net sales for the fiscal to range from $20.79–$21.08 billion, compared with $20.76–$21.11 billion projected earlier. Earnings for fiscal are now envisioned in a range of $3.58−$3.80 per share, up from $3.35–$3.65 expected earlier. Dollar Tree was the biggest advancer among the S&P 500 companies.
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