Stock Market News for April 4, 2013 - Market News
04 Abril 2013 - 6:36AM
Zacks
Discouraging reports on private
sector hiring dampened investor sentiment on Wednesday. Investors
turned cautious following comments made by Defense Secretary Chuck
Hagel regarding North Korea. Meanwhile, comments from president of
San Francisco Federal Reserve John Williams added fuel to investor
concerns. All the top ten S&P 500 industry groups suffered
losses, among which energy stocks suffered the most.
The Dow Jones Industrial Average
(DJI) fell 0.8% to close the day at 14,550.35. The S&P 500 lost
1.1% to finish yesterday’s trading session at 1,553.69. The
tech-laden Nasdaq Composite Index declined 1.1% to end at 3,218.60.
The fear-gauge CBOE Volatility Index (VIX) gained almost 11.2% to
settle at 14.21. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 7.1
billion shares, above 2012’s average of 6.48 billion shares.
Declining stocks outnumbered the advancers. For the 23% that
advanced, 75% declined.
Weak private sector employment
numbers came as a surprise to investors. According to the National
Employment Report released by Automatic Data Processing
(NASDAQ:ADP), on a seasonally adjusted basis, 158,000 jobs were
added in March. These numbers are well below the figure of 237,000
added in February. Of the 158,000 jobs added, 74,000 jobs were
added by small business while 37,000 and 47,000 were added by
medium and large businesses respectively. Initial claims data and
the unemployment rate, due on Thursday and Friday, respectively
will determine investor sentiment going forward.
According to the Institute of
Supply Management (ISM), the Non-Manufacturing Index (NMI) came in
at 54.4% in March. This was 1.6% lower than the figure reported in
February. Among the fifteen industries included in the index, only
two sectors, imports and supply deliveries, grew month over
month.
Investor sentiment was also
affected by comments the president of San Francisco Federal
Reserve, John Williams. He said that if the economy continues to
improve and post strong economic numbers, like in recent months,
there is a possibility that monetary stimulus will be withdrawn.
Since the start of 2013, the markets have witnessed strong
corporate results, an improving housing sector and a brighter job
scenario. The Federal Reserve’s stimulus package has also helped
markets rise significantly.
"I expect we will meet the test for
substantial improvement in the outlook for the labor market by this
summer. If that happens, we could start tapering our purchases
then," San Francisco Federal Reserve Bank President John Williams
said in remarks prepared for delivery to Town Hall Los Angeles. "If
all goes as hoped, we could end the purchase program sometime late
this year,” he added.
On the international front, Defense
Secretary, Chuck Hagel today said U.S. leaders will take North
Korean threats seriously and will take appropriate actions for
defense. According to the U.S. Department of Defense, North Korea
has threatened to attack Seoul, South Korean capital, and launch
missiles on Guam, Hawaii and western United States. In response to
the North Korean threat, the Department of Defense has sent a
land-based missile defense system to Guam, 2,000 miles from South
Korea. This move has been taken to defend from possible North
Korean attacks. Hagel described the threat as “a real and clear
danger and threat” to the United States.
Energy stocks were the biggest
losers among the top ten S&P 500 industry groups. The Energy
Select Sector SPDR (XLE) lost 1.9%. Stocks such as Chevron
Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), Hess
Corp. (NYSE:HES), Schlumberger Limited. (NYSE:SLB) and
ConocoPhillips (NYSE:COP) declined 1.0%, 0.7%, 2.8%, 1.1% and 1.3%,
respectively.
AUTOMATIC DATA (ADP): Free Stock Analysis Report
CONOCOPHILLIPS (COP): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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