Stock Market News for May 08, 2015 - Market News

Benchmarks snapped a two-day losing streak on Thursday following easing in bond yields and gains in technology stocks. Meanwhile, a less-than-expected rise in initial claims numbers on Thursday has set the tone for crucial total non-farm payroll data scheduled for release today. Investors are looking forward to the nonfarm payroll report to gauge the timing of the rate hike.

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 0.5% to close at 17,924.06. The Standard & Poor’s 500 (S&P 500) advanced 0.4% to 2,088.00. The tech-laden Nasdaq Composite Index closed at 4,945.54; increasing 0.5%. The fear-gauge CBOE Volatility Index (VIX) declined 0.1% to settle at 15.13. A total of about 6.9 billion shares were traded on Thursday, lower than the last five trading days’ average of 7.1 billion. Advancers outpaced declining stocks on the NYSE. For 56% stocks that advanced, 41% declined.
 
Benchmarks ended higher on Thursday after bond yields in the U.S. and Europe dropped from their morning highs. The benchmark U.S. 10-year Treasury note yields touched a high of 2.27% before trading near 2.18% for the day. The 30-year Treasury note yields also hit a four month high of 3%, before settling at around 2.91%. In Europe, 10-year German Bund yields settled near 0.59% after hitting 0.8%.
 
Gains in technology shares also had a positive impact on broader markets. Upbeat quarterly results from Alibaba Group Holding Limited (BABA) boosted the technology sector. Alibaba’s fourth quarter revenues of $2.81 billion increased 45% year over year and also topped analysts’ expectations. Earnings for the same period came in at 48 cents per share and were also able to beat analysts’ expectations. Shares of the Chinese e-commerce giant surged 7.5%.
 
Meanwhile, speculation that internet information provider Yelp Inc. (YELP) is seeking potential buyers also drove tech stocks higher. Yelp is seeking suitable buyers as they are currently struggling to post positive results. Yelp’s shares soared 23%.
 
The Technology SPDR ETF (XLK) gained 0.7%, the second highest gainer among the S&P 500 sectors. Key technology stocks including Apple Inc. (AAPL), Microsoft Corporation (MSFT), Verizon Communications Inc. (VZ), Google Inc (GOOGL) and International Business Machines Corporation (IBM) increased 0.2%, 0.9%, 0.2%, 1.3% and 0.6%, respectively.
 
Separately, the SPDR S&P Homebuilders ETF (XHB) advanced 1.3% and was the biggest gainer among the S&P 500 sectors. Key holdings including KB Home (KBH), Beazer Homes USA Inc. (BZH), Ryland Group Inc. (RYL), Toll Brothers Inc. (TOL) and The Home Depot, Inc. (HD) increased 0.4%, 0.9%, 2.5%, 1.7% and 1.6%, respectively.
 
Yesterday, the energy sector was the only sector of the S&P 500 to end in the red. The Energy Select Sector SPDR (XLE) fell 1.1%, following a drop in oil prices. Oil prices declined on concerns over how much Iran can supply oil to the global markets after sanctions are lifted. WTI crude oil dropped 3.4% to $58.94 per barrel. Additionally, Brent crude oil decreased 3.4% to $65.54 per barrel.
 
In economic news, the U.S. Department of Labor reported that jobless claims increased 3,000 for the week ending May 2 to 265,000, lower than the consensus estimate of 279,500. However, the 4-week moving average decreased 4,250 from previous week’s level to 279,500. The data on initial claims comes a day ahead of the much awaited non-farm payrolls report that accounts for approximately 80% of the workers who produce the entire gross domestic product of the United States.
 
Separately, the Board of Governors of the Federal Reserve System reported yesterday that consumer credit increased at a seasonally adjusted annual rate of 5.5% in the first quarter. Non-revolving credit increased at an annual rate of 7.50%. However, revolving credit decreased at an annual rate of 0.25%.
 
Among earnings news, Tesla Motors, Inc. (TSLA) reported loss of 70 cents per share in the first quarter of 2015, narrower than the Zacks Consensus Estimate of a loss of 81 cents. Apache Corp. (APA) also posted first quarter loss per share of 37 cents, narrower the Zacks Consensus Estimate of loss of 62 cents. The Priceline Group Inc. (PCLN) reported first quarter earnings per share of $7.47, beating the Zacks Consensus Estimate of $6.94. Whole Foods Market, Inc. (WFM) posted second-quarter fiscal 2015 earnings of 43 cents a share that came a penny ahead of the Zacks Consensus Estimate.
 
While, shares of Tesla Motors and Apache gained 2.8% and 0.9%, respectively, Priceline Group and Whole Foods Market’s shares dropped 4% and 9.7%, respectively. Priceline Group provided dismal second quarter outlook, while Whole Foods’ sales missed estimates.

Including these reports, about 434 S&P 500 members have reported first quarter earnings results so far. Among the 434 members, earnings are up 2.3% on 4% lower revenues, with 66.5% beating earnings per share estimates and 42.9% coming ahead of top-line expectations.

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