In the absence of major earnings reports or economic events, investor sentiment flagged, dragging benchmarks marginally lower. Monday’s trading session marked an end to the recent rally which lifted benchmarks to record levels. After several encouraging economic and earnings reports last week, investors are looking for a new catalyst which could spur market movement. Energy stocks were the major loser while the financial sector was the biggest gainer for the S&P 500.
The Dow Jones Industrial Average (:DJI) declined 0.2% to close the day at 13,971.16. The S&P 500 decreased marginally, by 0.1%, to finish yesterday’s trading session at 1,517.01. The tech-laden Nasdaq Composite Index fell 0.1% to end at 3,192.00. The fear-gauge CBOE Volatility Index (:VIX) decreased 0.6% to settle at 12.94. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.8 billion shares, well below the daily average of 6.45 billion shares in 2012. Declining stocks outnumbered the advancers on the NYSE. For 42% stocks that advanced, 54% declined.
Last week, the S&P 500 and the Nasdaq touched their highest levels in the last five and twelve years, respectively. The rally was brought about by a series of encouraging domestic and international economic data. Better-than-expected earnings added further fuel to the rally. Economic data for December shows that the global economy has improved. China and Germany experienced growth in exports and imports while the U.S. received encouraging reports on initial claims and the trade deficit.
On the earnings front, Boardwalk Pipeline Partners, LP (NYSE:BWP) reported a 26% growth in earnings. Despite the company beating the Street’s expectations, shares declined 0.6%. Shares of Moody’s Corporation (NYSE:MCO) gained 4.9% after losing 22% last week. Moody’s shares declined last week following fears that Moody’s will be the next target of a law suit by the Justice Department after it sued Standard’s & Poor.
Shares of tech-giant Apple Inc. (NASDAQ:AAPL) gained 1% following news that the company is planning to increase its product portfolio by introducing a “wristwatch-like device”. The “wristwatch-like device” is expected to have functions similar to smart phones. The losses in the Nadsaq were partly recovered after shares of the company increased by 1%.
U.S. President Barack Obama is expected to address the nation on how he plans to revive the economy. He is expected to bring about positive changes in infrastructure, education, clean energy and manufacturing. The President also agreed to negotiate on expenses incurred on Social Security and Medicare for aging citizens. However, he expressed his concerns on bringing an end to long-term tax relief for corporate jet owners, private equity firms and oil companies. Using this route, he intends to increase cash balance for the country.
The biggest gainer among the top ten S&P 500 industry groups was the financial sector. The Financial Select Sector SPDR (XLF) gained 0.5%. Stocks such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C) and Goldman Sachs Group, Inc. (NYSE:GS) gained 0.1%, 1.1%, 0.9%, 1.1% and 0.4%, respectively.
Energy stocks were the major loser among the S&P 500’s industry groups. The Energy Select Sector SPDR (XLE) declined 0.5%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Schlumberger Limited. (NYSE:SLB), Anadarko Petroleum Corporation (NYSE:APC), Apache Corporation (NYSE:APA) and National-Oilwell Varco, Inc. (NYSE:NOV) declined 0.4% 1.4%, 1.2%, 1%, and 1.2%, respectively.
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