Strong earnings from major companies once again propelled benchmarks to a finish in the green. Following these results, the S&P 500 climbed above 1,500 for the first time in more than five years. New home sales decreased for the month of December; but increased in 2012 to their highest point since 2009. Meanwhile, on the international front, German data reflected an improvement in the business sentiment, which was at its highest level in past six months. The Consumer Discretionary sector was the major gainer among the S&P 500 industry groups.
The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 13,895.98. The Standard & Poor 500 (S&P 500) increased 0.5% to finish Friday’s trading session at 1,502.96. The tech-laden Nasdaq Composite Index surged 0.6% to end at 3149.71.The fear-gauge CBOE Volatility Index (VIX) rose 1.6% to settle at 12.89. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.2 billion shares, lower than 2012’s daily average of 6.45 billion shares. Advancing stocks easily outnumbered decliners on the NYSE; as for 59% stocks that rose, only 38% moved lower.
The blue-chip index gained 1.8%, S&P 500 surged 1.1% and Nasdaq added 0.5% over the week. During the previous week, better-than-expected earnings from major companies helped benchmarks finish in the green. Initial claims dropped to their lowest level in five years, also boosting investor sentiment. The S&P 500 finished in the green for eight consecutive days for the first time since 2004.
Software major Microsoft Corporation (NASDAQ:MSFT) reported revenues trailing the Street’s expectations. However, the company beat the Street’s consensus in terms of earnings per share. Shares of Microsoft Corporation increased almost 1% following its quarterly results. The company’s profits decreased 3.7% year over year on account of increased expenses towards marketing of Windows Operating System, tablets and smart phones.
Shares of the Procter & Gamble Company (NYSE:PG) surged 4% after revenue and earnings beat the Street’s forecast. Growth came from the new products it introduced in Brazil, Egypt and the US. The company has revised its outlook for fiscal 2013. It expects to increase its revenue between 1% to 2% from a previously estimated 1% while earnings are expected to be between $3.97 and $4.07 per share compared to prior estimates of $3.80 to $4.00 per share.
Following Procter & Gamble’s results, the Consumer Staples SPDR (XLP) surged 0.6%. Apart from P&G, PepsiCo, Inc. (NYSE:PEP), H.J. Heinz Company (NYSE:HNZ), Kellogg Company (NYSE:K) and Kraft Foods Group Inc (NASDAQ:KRFT) increased 0.4%, 0.1%, 0.4 and 0.5% respectively.
Meanwhile, the U.S. Census Bureau and the Department of Housing and Urban Development reported new home sales data which noted that new home declined in December. According to the report, sales of single family homes declined in December to a seasonally adjusted annual rate of 369,000 from the previous month’s revised estimates of 398,000. This was below the consensus estimate of 387,000. However, in the previous year, new home sales reached their highest point since 2009.
Encouraging data from Germany indicated the revival of its economy after the EU crisis. German business sentiment improved for the third month, moving to the highest level in the past six months. European banks are expected to repay a higher portion of the loans the ECB provided them than originally expected.
Consumer Discretionary stocks rallied, gaining 1.1%. Major gainers among the sector were Amazon.com, Inc. (NASDAQ:AMZN), Comcast Corporation (NASDAQ:CMCSA), The Home Depot, Inc. (NYSE:HD), The Walt Disney Company (NYSE:DIS) and McDonald's Corporation (NYSE:MCD) which increased 3.8%, 0.5%, 0.7%, 0.8% and 0.4%, respectively.