For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
The Dow Jones Industrial Average (:DJI) gained 1.1% to close Monday’s trading session at 16,247.22. The Standard & Poor (S&P 500) rose almost 1% to finish at 1,858.83. The tech-laden Nasdaq Composite Index went up 0.8% to 4,279.95. The fear-gauge CBOE Volatility Index (:VIX) plunged 12.2% to settle at 15.64. Total volume on the New York Stock Exchange was 2.8 billion shares. Declining stocks were outnumbered by advancing stocks on the NYSE. For 27% stocks that declined, 70% advanced.
U.S. stocks ended higher on Monday after the vote in Crimea was conducted without any military intervention. Moreover, ‘modest’ economic sanctions on some Russian and Ukraine officials did not affect investors’ mood.
Throughout the week, escalating political tension between Russia and the West unnerved investors. Russia even threatened to invade Ukraine and deployed troops into Crimea ahead of the referendum vote.
On Sunday, citizens of Crimea were supposed to decide whether to stay with Ukraine or become part of Russia. The vote turned to be overwhelmingly in favor of accession to Russia. However, US President Barack Obama and the European Union have refused to recognize the vaildity of the referendum.
On the domestic front, positive economic data boosted investors’ confidence. The Board of Governors of the Federal Reserve System reported an increase in industrial production. The report stated industrial production rose 0.6% in February after it slipped 0.2% in January. This rise in industrial production in February was more than the consensus expectation of a rise by 0.2%. The gain in manufacturing output by 0.8% and rise in mining output by 0.3% were cited to be the reasons behind the surge in factory production for the month of February. Separately, capacity utilization rose to 78.8%, more than the consensus expectations of a rise to 78.6%.
The monthly survey of manufacturers in New York State by the Federal Reserve Bank of New York showed modest improvement in business conditions. General business conditions rose to 5.61 in March, more than the consensus expectation of a rise to 5.45. New orders climbed to 3.1 and unfilled orders index dropped to zero in March.
The National association of Home Builders/Wells Fargo said the U.S. homebuilders’ confidence moved up in February. The sentiment gauge went up to 47 in March from February’s reading of 46. However, for the second consecutive month the index remained below the key level of 50.
All the 10 sectors of the S&P 500 ended in the green. The Industrial Select Sector SPDR (XLI) and the Technology Select Sector SPDR (XLK) led the race as both the sectors gained 1.2%. Top holdings from the Industrials sector such as General Electric Company (NYSE:GE), United Technologies Corp. (NYSE:UTX), The Boeing Company (NYSE:BA), Union Pacific Corporation (NYSE:UNP) and 3M Company (NYSE:MMM) increased 1.3%, 1.6%, 1.9%, 1.2% and 1.9%, respectively.
Key stocks from the Technology sector such as Apple Inc. (NASDAQ:AAPL), Google Inc. (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Verizon Communications Inc. (NYSE:VZ) and International Business Machines Corporation (NYSE:IBM) rose 0.4%, 1.7%, 0.9%, 0.5% and 1.9%, respectively.
Read the analyst report on GE
Read the analyst report on UTX
Read the analyst report on BA
Read the analyst report on UNP
Read the analyst report on MMM
Read the analyst report on AAPL
Read the analyst report on GOOG
Read the analyst report on MSFT
Read the analyst report on VZ
Read the analyst report on IBM
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