Wall Street closed lower on Friday primarily due to profit booking by investors. Moreover, weaker-than-expected earnings results by some big companies also dented investors' confidence. All the three major stock indexes ended in red. For the week as a whole, these indexes had mixed performances. However, these indexes performed impressively in April.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was down 0.5% or 185.51 points to close at 33,874.85. Notably, 21 components of the 30-stock blue-chip index ended in the red while 9 in green. The tech-heavy Nasdaq Composite finished at 13,962.68, tumbling 0.9% or 119.86 points due to weak performance by large-cap technology stocks.
Meanwhile, the S&P 500 fell 0.7% to end at 4,181.07. The Energy Select Sector SPDR (XLE), the Technology Select Sector SPDR (XLK), the Communication Services Select Sector SPDR (XLC) and the Materials Select Sector SPDR (XLB) tanked 2.5%, 1.4%, 1.4% and 1.1%, respectively. Notably, seven out of eleven sectors of the benchmark index closed in the red while four in green.
The fear-gauge CBOE Volatility Index (VIX) was down 5.7% to 18.61. A total of 10.3 billion shares were traded on Friday, higher than the last 20-session average of 9.8 billion. Decliners outnumbered advancers on the NYSE by a 2.13-to-1 ratio. On Nasdaq, a 2.13-to-1 ratio favored declining issues.
Weak Earnings Results of Some Big Companies
Overall, the first-quarter 2021 earnings season is highly impressive so far. However, on Friday, a few big companies reported weak earnings results that demoralized market participants.
Oil behemoth Chevron Corp. CVX reported adjusted first-quarter earnings per share of $0.90, missing the Zacks Consensus Estimate of $0.92. Building constructor Weyerhaeuser Company WY came out with quarterly earnings of $0.91 per share, lagging the Zacks Consensus Estimate of $0.93 per share.
Consequently, shares of Chevron and Weyerhaeuser fell 3.6% and 2.2%, respectively. Weyerhaeuser sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Department of Commerce reported personal income soared 21.1% in March while personal spending jumped 4.2%. Personal savings rate came in at 27.6% in the same month. The personal consumption expenditure (PCE) price index rose 0.5% in March and 2.3% year over year. The core (excluding volatile items) PCE price index - Fed's favorite inflation gauge - rose 0.4% in March and 1.8% year over year. Per the employment cost index, wages rose 1% in first-quarter 2021 and 2.7% year over year.
The University of Michigan reported that consumer sentiment climbed to 88.3% in the final reading of April from 86.5% in the preliminary reading, the highest since February 2020. The current conditions sub-index remained flat at 97.2% while the expectations sub-index rose to 82.7% from 79.7% in the preliminary reading, the highest since February 2020.
China's National Bureau of Statistics reported manufacturing purchasing managers index declined to 51.1 in April from 51.9 in March. Moreover, European Union's statistics agency Eurostat reported that the first-quarter 2021 GDP of the 19-member Eurozone contracted 0.6%. The GDP shrank 1.8% year over year.
Last week was a mixed one in Wall Street. The Dow and the Nasdaq Composite dropped 0.5% and 0.4%, respectively, while the S&P 500 was almost flat. Despite strong first-quarter earnings results, investors were concerned about high valuation of equities. Moreover, resurgence of coronavirus in some major emerging markets, like India, Brazil and Turkey remained concerned.
Meanwhile, Wall Street has completed an impressive April. The Dow, the S&P 500 and the Nasdaq Composite rallied 2.4%, 5.6% and 7%, respectively. The S&P 500 posted its best monthly returns since November 2020. Strong recovery of the U.S. economy, massive fiscal stimulus and an extremely accommodative Fed were primary reasons for this strong performance.
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