Stock Market News for August 27, 2013
Benchmarks ended in the red after U.S. Secretary of State John Kerry accused Syria’s government of using chemical weapons against civilians. He also said Syria’s usage of chemical weapons is “undeniable” and President Barack Obama would hold Syria’s government responsible for this. Stocks were trading higher for most of the day but erased all gains and entered into negative territory following Kerry’s comments on Syria. Meanwhile, durable orders declined more than expected for the month of July. The health care sector was the only gainer among the S&P 500 industry groups. Consumer staples stocks were the worst performers.
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) lost 0.4% to close the day at 14,946.46. The S&P 500 slipped 0.4% to finish yesterday’s trading session at 1,656.78. The tech-laden Nasdaq Composite Index fell 0.01% to end at 3,638.707. The fear-gauge CBOE Volatility Index (:VIX) jumped 7.2% to settle at 14.99. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.0 billion shares, well below 2013’s average of 6.31 billion shares. Declining stocks outnumbered the advancers. For 56% shares that declined, 40% advanced.
On Monday, the U.S. Secretary of State John Kerry said all countries must unite to question Syria’s use of chemical weapons against innocent civilians and make that government accountable. He further said: “Make no mistake: President Obama believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people.” He added that Syria’s government is trying to hide facts, implying the U.S. is closer to a probable military attack.
On the home front, the U.S. Department of Commerce reported durable goods numbers for the month of July. After three consecutive months of gains, new orders for manufactured durable goods declined 7.3% to $226.6 billion. This was above the consensus estimate of a fall of 3.8%. Orders for durable goods registered their biggest drop in almost a year. Excluding transportation, new orders fell 0.6% while excluding defense, new orders declined 6.7%.
Going further into details of new orders, shipments of manufactured durable goods fell 0.3% $228.8 billion. On the other hand, unfilled orders for manufactured durable goods edged up 0.4% to $1,034.3 billion. Despite discouraging durable goods numbers benchmarks traded higher for most of the trading session as weak durable goods numbers eased investor concerns about the Federal Reserve trimming its massive bond buying program.
The Obama administration said on Monday that U.S might run out of cash if lawmakers fail to increase a limit on government borrowing. In a letter written to congressional leaders Treasury Secretary Jack Lew said: “Congress should act as soon as possible to protect America's good credit.” He further added: “Such a scenario could undermine financial markets and result in significant disruptions to our economy.”
The health care sector was the only gainer among the S&P 500 industry groups and the Health Care SPDR (XLV) gained 0.1% Stocks such as Stryker Corporation (NYSE:SYK), Wright Medical Group Inc (NASDAQ:WMGI), MAKO Surgical Corp. (NASDAQ:MAKO), Bristol-Myers Squibb Co (NYSE:BMY) and The Medicines Company (NASDAQ:MDCO) added 0.1%, 0.5%, 0.7%, 0.4% and 3.4%, respectively.
Consumer staples stocks took a beating yesterday and were the worst performers among the S&P 500 industry groups. The Consumer Staples Select Sect. SPDR (XLP) lost 1.2%. Stocks such as The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), The Coca-Cola Company (NYSE:KO), Philip Morris International Inc. (NYSE:PM) and Wal-Mart Stores, Inc. (NYSE:WMT) slipped 1.8%, 1.4%, 1.0%, 1.1% and 0.6%, respectively.
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Read the analyst report on MAKO
Read the analyst report on BMY
Read the analyst report on MDCO
Read the analyst report on WMT
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