Upbeat economic data helped offset fears of Japan’s nuclear meltdown and pushed indices higher ending a three-day losing streak for US markets.
The day after the Dow recorded its largest decline since August 2010, the Dow Jones Industrial Average gained 1.39% to end at 11,774.51. The S&P 500 was up 1.34%, or 16.81 points, to close at 1,273.69. The tech-laden Nasdaq Composite Index too gained 19.23 points or 0.73% to close at 2,636.05. The CBOE Volatility Index, Wall Street’s fear gauge, was down 10.4%. However, the Index is up 30.8% over the week.
Coming to the economic front, on Thursday the Labor Department lifted market sentiment by reporting a decrease in weekly initial claims figures. Unemployment claims shed 16,000 to 385,000 for the week ending March 12th from 401,000 recorded a week earlier. In a separate report the Conference Board said leading indicators for the month of February rose 0.8% from 0.1% recorded in January. Another report, from Philadelphia Federal Reserve Bank said manufacturing activity in the Philadelphia region rocketed 43.4 in March, beating economists’ expectations of 28.1. As a result, the markets took little notice of the negative data which came in, namely industrial production which recorded a 0.1% drop and consumer inflation which increased 0.5%.
On the international front, the nuclear power plant crisis in Japan was the centre of attention for global investors. In an attempt to avoid a complete meltdown Japanese military helicopters released 100 tons of sea water onto the Fukushima Daiichi nuclear reactor. Although the efforts helped to lower radiation levels slightly the situation still remains fluid. Major stock markets from around the world closed mixed. London’s FTSE and the DAX in Germany gained 1.7% and 2.0% respectively. However, Japan’s Nikkei fell 1.4% and Hong Kong’s Hang Seng lost 1.8%.
Coming to earnings news, shares of motor home manufacturer Winnebago Industries (NYSE:WGO) slid 12% after the company’s second quarter revenue fell 3.6% due to weakening consumer confidence arising out of volatile gas prices. FedEx’s (NYSE:FDX) share prices gained 3% to close at $87.89 after the cargo company projected better than expected earnings results for the current quarter. Retailer Guess? Inc (NYSE:GES) share prices decreased 14% after the company reported disappointing guidance late on Wednesday. Nike (NYSE:NKE) reported its fourth quarter earnings results missing expectations. The company reported earnings of $1.08 per share, lower than analysts’ expectations of $1.11 per share.
On a sectoral basis, energy and natural resources stocks were the gainers of Thursday’s trade. Turmoil in Middle East and North Africa drove oil prices high. Chevron Corp (NYSE:CVX) and ConocoPhillips (NYSE:COP) increased 2.7% and 4% to close at $102.24 and $76.72 respectively. The world’s largest oil services group Schlumberger (NYSE:SLB) spiked 4.75% to close at $87.05. Material stocks like Freeport-McMoRan (NYSE:FCX) and Cliffs Natural Resources (NYSE:CLF) gained 3.4% and 5.8%. Freeport-McMoRan is the largest copper miner by capitalization in the world.
CLIFFS NATURAL (CLF): Free Stock Analysis Report
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CHEVRON CORP (CVX): Free Stock Analysis Report
FREEPT MC COP-B (FCX): Free Stock Analysis Report
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WINNEBAGO (WGO): Free Stock Analysis Report
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