Stock Market News for October 10, 2013
Stocks eked out gains yesterday after Republicans and Democrats lawmakers showed signs of resolving the budget issue ahead of the impending debt ceiling deadline. Yesterday’s modest gains helped the Dow and the S&P 500 avoid their third consecutive day of losses. However, the Nasdaq ended in the red for the third day in a row. Meanwhile, President Barack Obama nominated Federal Reserve Vice chairperson Janet Yellen to lead the world’s most powerful central bank. The Street also received earnings from some major companies. Utilities sector was the biggest gainer among the S&P 500 industry groups. Consumer discretionary stocks were beaten down the most for the third consecutive day.
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) added 0.2% to close the day at 14802.98. The S&P 500 rose 0.1% to finish yesterday’s trading session at 1656.40. The tech-laden Nasdaq Composite Index dropped 0.5% to end at 3677.78. The fear-gauge CBOE Volatility Index (:VIX) declined 3.6% to settle at 19.60. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.9 billion shares, lower than 2013’s average of 6.1 billion shares. Declining stocks outnumbered the advancers. For 50% shares that declined, only 46% advanced.
The budget stalemate and investor tensions about the approaching debt ceiling deadline have affected the markets in recent days. These concerns have pulled the major indices lower. The S&P 500 has declined nearly 4% after touching a record high in September. Yesterday, the Nasdaq dropped as much as 1% but trimmed its losses in the afternoon.
In an effort to reopen the government and increase the country’s debt limit, President Barack Obama made plans to discuss with lawmakers of both the parties at the White House on Thursday. Michael Steel, a spokesman for House speaker John Boehner, said: “Reps. Pelosi and Hoyer asked for the meeting, and as we've stated publicly, we're willing to meet with any Democratic leader who is willing to talk.” In order to save U.S. from credit default, lawmakers will have to increase $16.7 trillion debt limit by October 17.
Meanwhile, President Barack Obama nominated Federal Reserve Vice chairperson Janet Yellen as the replacement for current Federal Reserve chairman Ben Bernanke. If the Senate supports Yellen, then she would be the first women to lead the Fed in its 100-year history. President Obama said: “Given the urgent economic challenges facing our nation, I urge the Senate to confirm Janet without delay.”
On the earnings front, Alcoa Inc (NYSE:AA) reported third quarter earnings. Shares of the aluminum maker gained 2.0% after the company’s earnings came in above the Street’s estimate. The company also forecasted a 7% growth in the demand for aluminum. On the other hand, shares of Yum! Brands, Inc. (NYSE:YUM) declined 6.8% after the company reported its results. Yum! Brands the parent company of KFC, Taco Bell and Pizza Hut missed the Street’s estimates. The company’s profits declined 68% in the third quarter after same-store sales declined in Asian Countries. Yum! Brands also lowered its 2013 earnings forecast due to “lower-than-expected China sales and a higher-than-expected full-year tax rate.”
The consumer discretionary sector was the biggest loser among the S&P 500 industry groups for the third consecutive day. The Consumer Discretionary SPDR (XLY) lost 0.5%. Stocks such as 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) slipped 1.7%, 0.7%, 0.2%, 0.6% and 0.7%, respectively.
The utilities sector was the biggest gainer among the S&P 500 industry groups and the Utilities SPDR (XLU) gained 0.4%. Stocks such as Public Service Enterprise Group Inc. (NYSE:PEG), Exelon Corporation (NYSE:EXC), PG&E Corporation (NYSE:PCG), Consolidated Edison, Inc. (NYSE:ED) and Edison International (NYSE:EIX) added 0.7%, 1.4%, 0.7%, 0.7% and 1.4%, respectively.
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