Markets
For the week of Monday, May 12, 2014 through Friday, May 16, 2014:
- Standard & Poor’s 500 Index: 0.03%
- Dow Jones Industrial Average: -0.45%
- NASDAQ Composite: 0.53%
Investors snapped up shares of companies large and small Monday, driving major indices to new records. The rally was even able to revive beaten-down tech stocks. The S&P 500 squeezed out its ninth record close of the year. The Dow Jones Industrial Average and the S&P 500 edged higher, reaching fresh records again on Tuesday, as investors maintained their focus on a stable U.S. economy and better-than-expected corporate earnings. However, money managers remained wary of technology stocks, likely worried share prices aren’t justified by these companies’ growth prospects.
By mid-week, stocks retreated on concerns of the slow economic growth. Stocks fell again on Thursday as disappointing results from Wal-Mart Stores (NYSE: WMT) weighed on blue chips, while shares of small companies led the declines. Stocks stepped up in Friday’s session, ramping up late on a variety of economic data. However, consumer confidence is on the wane this month. In a preliminary reading for May, the University of Michigan’s consumer sentiment index slipped from 84.1 to 81.8.
Economic Data
Chain Store Sales Snapshot:
- The Chain Store Sales Index fell 0.1%.
- The fall was a surprise, however, the index is up 3.9% year-over-year.
- The data included the Mother’s Day holiday.
- Warmer weather and falling gasoline prices have increased consumer spending
Retail Sales:
- Retail sales increased 0.1% in April.
- April sales were flat excluding auto dealers.
- April sales rose 4% year-over-year.
- March was revised up 1.5%.
MBA Mortgage Applications Survey:
- The Mortgage Applications composite index rose 3.6%.
- The purchase index slid 0.1%.
- However, the refinance index rose 6.8%.
Producer Price Index:
- Producer prices increased 0.6% in April.
- Wholesale and retail margins saw strong gains
- Early stages of production saw prices unchanged.
- The year-over-year increase in producer prices rose to 2.1%.
Jobless Claims:
- Initial claims for unemployment insurance slid 24,000 to 297,000.
- This is the first time claims have been under 300,000 since the recovery began.
- The four-week moving average fell from 2,000 to 323,250 for the week.
- Continuing claims fell to 2.667 million.
Consumer Price Index:
- The Consumer Price Index rose 0.3% in April.
- Gasoline prices and food prices helped the headline gains.
- The core consumer price index increased 0.2%.
Industrial Production:
- Industrial production declined 0.6% in April.
- Normal weather contributed to a 5.3% drop in utilities production.
- Manufacturing output fell 0.4%.
- Mining production increased 1.4%.
Earnings:
Cisco Systems, Inc. (NASDAQ: CSCO)
- Cisco reported profits of $2.2 billion, or $0.42 a share, compared to $2.5 billion, or $0.46 per share last year.
- Excluding one-time items, profits were flat at $0.51, year-over-year.
- Revenue fell 5.5% to $11.5 billion.
- Analysts expected $0.48 per share on revenue of $11.3 billion.
Macy’s, Inc. (NYSE: M)
- Macy’s earned $224 million, or $0.60 per share, compared to $217 million, or $0.55 per share, a year ago.
- Revenue fell 1.7% to $6.28 billion.
- Analysts expected $0.59 a share on revenue of $6.46 billion.
Wal-Mart Stores Inc. (NYSE: WMT)
- Wal-Mart earned $3.59 billion, or $1.11 per share, compared to $3.78 billion, or $1.14 per share, year-over-year.
- Revenue increased to $114.96 billion.
- Analysts expected $1.15 per share on revenue of $116.43 billion.
Kohl’s Corp. (NYSE: KSS)
- Kohl’s earned $125 million, or $0.60 per share, compared to $147 million, or $0.66 per share, a year ago.
- Revenue fell 3.1% to $4.07 billion.
- Analysts expected $0.62 cents a share on revenue of $4.22 billion.
- Same-store sales fell 3.4%.
Interest Rates
- The two-year Treasury rate slid two basis points to 0.36%.
- The five-year Treasury rate fell 10 basis points to 1.53%.
- The 10-year Treasury rate decreased 13 basis points to 2.49%.
- The 30-year Treasury yield fell 14 basis points to 3.32%.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
