Benchmarks finished mixed during yesterday’s trading session as fears of a possible US military strike on Syria retreated. Diplomatic efforts are being carried out to make Syria surrender its chemical weapons. Meanwhile, the new iPhone models introduced by Apple failed to impress investors. Of the top ten S&P 500 industry groups, energy stocks gained the most. Utilities stocks suffered maximum losses.
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 0.9% to close the day at 15191.06. The S&P 500 added 0.7% to finish yesterday’s trading session at 1683.99. The tech-laden Nasdaq Composite Index increased 0.6% to end at 3729.02. The fear-gauge CBOE Volatility Index (:VIX) tumbled 7.0% to settle at 14.53. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.5 billion shares, above 2013’s average of 6.24 billion shares. Advancing stocks outnumbered the decliners. For 64% shares that advanced, only 34% declined.
The S&P 500 clocked gains for the seventh straight day as chances of a possible military strike on Syria retreated. These developments boosted investor sentiment. For the past couple of weeks, benchmarks were tilted towards losses as there was a high chance that the US military will execute a military strike on Syria. This happened after the government of Syria used chemical weapons, killing around 1400 people. However, Russia has a diplomatic solution that might prevent a possible military strike. Russia suggested that if Syria’s chemical weapons are surrendered under international control, a military strike can be abated.
The Nasdaq ended in negative territory after shares of Apple Inc. (NASDAQ:AAPL) lost nearly 5.4%. Apple failed to impress investors with their new iPhones, namely iPhone 5S and iPhone 5C. For the first time, Apple has forayed into making a cheaper iPhone, the iPhone 5C. However, the phone was priced well below expectations. The iPhone 5C can be bought at $99 with a 2 year contract or for $549 without contract. This would also be available in different colors. The iPhone 5S was introduced at $199 with a contract. Apart from other features, one feature which stands apart is the fingerprint scanner. Last month, shares of the company had increased 11% on anticipation of the launch of new products.
Investors are likely to pay greater attention towards the Federal Reserve’s two day policy meeting which is due to take place on September 17 and 18. The fate of the $85 billion bond purchase program is expected to be decided during this meeting. In light of positive economic indicators, few policy makers have supported the tapering of the bond purchase program while others have chosen to wait and watch for further indicators. The massive bond purchase program has lifted investor sentiment and benchmarks to a whole new level. Benchmarks have gained nearly 18% owing to these bond purchase programs.
According to the US Department of Commerce, wholesale inventories increased marginally by 0.1%, compared to the consensus estimate of 0.3%. Total inventories also edged up 0.1% and increased 2.2% on a year over year basis. The inventory to sales ratio came in at 1.17 compared to 1.21.
Energy stocks gained the most among top ten S&P 500 industry groups. The Energy Select Sector SPDR ( XLE) gained 0.8%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Hess Corp. (NYSE:HES), ConocoPhillips (NYSE:COP) and Murphy Oil Corporation (NYSE:MUR) gained 1.2%, 0.7%, 0.4%, 0.7% and 0.4%, respectively.
Utilities stocks suffered maximum losses. The Utilities SPDR ( XLU) lost nearly 1.0%, Stocks such as TECO Energy, Inc. (NYSE:TE), Duke Energy Corp (NYSE:DUK), NextEra Energy, Inc. (NYSE:NEE), The Southern Company (NYSE:SO) and NRG Energy Inc (NYSE:NRG) declined 1.3%, 1.0%, 1.2%, 0.9% and 2.0%, respectively.
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