The Dow Jones and S&P 500 finished in the green following strong domestic and international economic data coupled with better-than-expected earnings from Netflix. But dismal quarterly results from technology bellwether Apple dragged the Nasdaq into negative territory. Meanwhile, the number of Americans filing for unemployment benefits dropped to their lowest level in the last five years during the previous week. The biggest gainer for the S&P 500 was consumer discretionary stocks while the only loser was the technology sector.
The Dow Jones Industrial Average (DJI) gained 0.3% to close the day at 13,825.33. The Standard & Poor 500 (S&P 500) increased 0.01 point to finish yesterday’s trading session at 1,494.82. The tech-laden Nasdaq Composite Index dropped 0.7% to end at 3130.38.The fear-gauge CBOE Volatility Index (VIX) rose 1.9% to settle at 12.69. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.8 billion shares, higher than 2012’s daily average of 6.45 billion shares. Advancing stocks outnumbered decliners on the NYSE; as for 54% stocks that rose, 43% moved lower.
Shares of online video service provider Netflix, Inc. (NASDAQ:NFLX) rocketed 42% after revenue and earnings beat the Street’s forecast. During the reported quarter, the company added 2.05 million customers taking its domestic customer base to 27.2 million. The company added 4 million customers to its customer base worldwide. Shares of the company witnessed its biggest leap since it got listed on the stock market.
Technology bellwether Apple Inc. (NASDAQ:AAPL) failed to impress the Street, reporting below-than-expected revenues. Shares of the company plunged 12.4% following poor quarterly results. The company sold 22.9 million iPads, up 48% year over year and 47.8 million iPhones, well below the Street’s forecast. The primary concern for the company is its increasing production costs and performance pressure. Since September 2012, shares of the company have lost 36% while in January 2013 the company has lost 15% till date.
Meanwhile, the U.S. Department of Labor reported that the number of Americans filing for unemployment benefits declined to its lowest level in five years. According to the report, seasonally adjusted initial claims decreased 5,000 to 330,000 from prior week’s unrevised figure of 335,000. This was below the consensus estimate of 335,000. The continuous decrease in initial claims numbers indicates the job market is gradually improving.
External factors from major economies boosted investor sentiment. Economic data from China suggested that its manufacturing sector had taken its biggest leap in two years. According to HSBC, purchasing manager’s index increased to 51.9 in January from 51.5 in December indicating growth in the monthly index. This index has recorded its highest level in the past two years. According to chief China economist for HSBC, Qu Hongbin: “The upbeat manufacturing PMI reading heralds a good start to China’s economic growth into the New Year”
Meanwhile, German PMI data showed signs of recovery in the economy. The largest economy among the European states grew at its fastest pace this year. The PMI index of Germany rose to 53.6 from 50.3 in December 2012.
The gainers among consumer discretionary stocks were The Home Depot, Inc. (NYSE:HD), Amazon.com, Inc. (NASDAQ:AMZN), DIRECTV (NASDAQ:DTV), Starbucks Corporation (NASDAQ:SBUX) and Whirlpool Corporation (NYSE:WHR) with gains of 1.3%, 2.1%, 0.7%, 0.2% and 2.2% respectively.
The losers among the technology sector include International Business Machines Corp. (NYSE:IBM), Dell Inc. (NASDAQ:DELL), SAP AG (NYSE:SAP), and Intel Corporation (NASDAQ:INTC) with 0.2%, 0.6%, 0.2% and 0.8%.
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