Thursday, April 23, 2015 -
US stocks posted modest gains on Thursday, as energy and technology stocks led the market as tensions heat up in the Middle East.
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Stocks once again shrugged off early losses to gradually move mostly higher over the course of the trading day on Thursday. With the upward move on the day, the tech-heavy Nasdaq ended the session at a new record closing high.
The major indexes gave back ground going into the close but managed to hold on to most of the day’s gains. While the Nasdaq rose 21 points (+0.4%) to 5,056, the Dow inched up 20 points (+0.1%) to 18,059 and the S&P 500 edged up 5 points (+0.2%) to 2,113. The NYSE finished at +0.42% and the small cap Russell 2000 at +0.48%.
Today’s strength was attributed to a positive reaction to the latest batch of earnings news from big-name companies, despite the fact that S&P earnings are forecast to fall this quarter.
Crude Oil Prices Jump
In spite of very mixed earnings and weak economic reports, the bulls got support today from another spike in crude oil prices with a 1.2 percent jump in energy shares as WTI crude oil climbed $1.58 to $57.74 a barrel.
This has really been the story in the month of April. Crude oil ended March at $49.34 and here 16 days later we are up $8.4 or 17% so far this month. Of course, this has blasted the energy sector higher. At the same time the central bankers have been selling the U.S. dollar, which was also down sharply today, putting pressure on oil prices higher.
“Attempts to ease fighting in Yemen appeared to falter Thursday, as Shiite rebels pressed an offensive in the south and a Saudi Arabia-led coalition intensified its airstrikes less than two days after it said it was scaling back the campaign” according to the Associated Press.
Yemen doesn’t produce much oil but around its straits flow the majority of the world’s oil coming from the Middle East and Iran and U.S. sending battleships to the area has made oil prices very volatile.
New Home Sales – not so good –
along with manufacturing
In other news, yesterday we learned of a small improvement in March’s existing home sales but today, new home sales declined 11.4% in March to 481,000 from an upwardly revised 543,000 (from 539,000) in February. The median new home price declined 1.7% y/y in March to $277,400. That was the first year-over-year decline since September 2014.
The April 2015 Markit manufacturing PMI noted the weakest rise in production for four months. Export orders decline for the first time since Nov 2014. Input prices fall for the longest period since 2008/09 leading to factory prices at the lowest in nearly a year.
“Manufacturers saw a disappointing start to the second quarter, reporting the weakest growth since January. Key to the slowdown was a weakening of export orders, in turn a symptom of the loss of competitiveness arising from the dollar’s strength.”
Both China and Japan reported their manufacturing PMI and both are trending below 50. France’s PMI slowed to an awful 48.4 in April vs. 48.8 and Germany’s PMI slowed to 51.9 from 52.8—not exactly, inspiring.
For now the stock market buying is very selective, as a changing group of sector leaders and laggards is contributing to a lazy market with no ambition with summer just around the corner and the first quarter GDP about to be announced in a few days.
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