Markets Pare Week’s Gains in Friday Trading

Markets

For the week of Monday, March 31, 2014 through Friday, April 4, 2014:

• Standard & Poor’s 500 Index: 0.44%
• Dow Jones Industrial Average: 0.58%
• NASDAQ Composite: -0.65%

Stocks rallied on the first quarter’s final day. Biotech stocks capped a lackluster quarter with strong gains. Stocks struggled in the quarter to maintain last year’s momentum, though they remain near record highs. Investors were also encouraged by Fed Chairwoman Janet Yellen’s comments about the U.S. economy still requiring support from the central bank’s low interest-rate policy. The markets kicked off the second quarter with broad gains, propelling the S&P 500 index to its seventh record close of the year. Several economic reports in the U.S. and overseas were close enough to expectations that they didn’t alter the outlook. The S&P 500 notched another record close Wednesday, and the Dow finished just short of an all-time high. The Dow hit an intraday record high on Thursday, but the major indices were largely flat. Stocks closed lower Friday, led by a drop in NASDAQ-listed tech and biotech shares. Earlier, stocks were mixed when investors received the March nonfarm payrolls report. The data showed an increase of 192,000 jobs last month, slightly below the 200,000 analysts had expected, but both February and January job growth figures were revised upward. The jobless rate held steady in March at 6.7%.

Economic Data

Chain Store Sales Snapshot:

• The ICSC chain store sales index rose 3.6%.  
• Year-over-year the index increased 0.6%.

ISM Manufacturing Index:

• The Institute for Supply Management’s manufacturing index increased from 53.2 to 53.7.
• New orders also increased in March.

MBA Mortgage Applications Survey:

• Mortgage applications fell for the third consecutive week as the composite index fell 1.2%.
• Purchase activity advanced 0.9%.
• Refinancing activity fell 2.9%. 

ADP Jobs Report:

• Private payrolls increased 191,000 in March, up from the upwardly revised gain of 178,000 in February.
  • The gains are broad-based across industries and business size classes.
    • Goods producing employment rose by 28,000 jobs, slightly more than the upwardly revised 25,000 in February.
    • The construction industry added 20,000 jobs over the month.
    • Manufacturers added 5,000 jobs during the month, the same number as in February.
  • Job gains were also broadly distributed across companies of various size.
    • Small businesses (<50 employees) added 72,000.
    • Medium-sized businesses (50-499 employees) contributed 52,000.
    • The largest businesses (>500 employees) increased staffing by 67,000.

Factory Orders:

• Orders for manufactured goods increased 1.6%.  
• Durable goods orders rose 2.2%.  
• Shipments of durable goods rose 0.8%.
• Unfilled orders gained 0.3%
• Inventories increased 0.7%.

Jobless Claims:

• Unemployment insurance claims rose 16,000 to 326,000.
• The four-week moving average increased slightly.
• Continuing claims rose 22,000 to 2.84 million.
  

International Trade:

• The U.S. foreign trade deficit widened to $42.3 billion.
  • Exports declined to $190.4 billion from $192.5 billion in January.
  • Imports rose to $232.7 billion from $231.7 billion.

ISM Services Index:

• ISM’s Services index rose to 53.1.
• The rebound was less than expected with mixed details.
• New orders rose in March.
• Employment expanded following last month’s drop.

Earnings:

Cal-Maine Foods, Inc. (NASDAQ: CALM)

• Cal-Maine foods reported revenue and earnings of $395.5 million and $1.77 a share.
• Specialty egg sales accounted for much of the strong report.
  • Nutritionally enhanced, cage-free and organic egg sales increased 9% accounting for 17.4% of all sales.

Apollo Education Group, Inc. (NASDAQ: APOL)

• Apollo’s earnings increased 8% to $14.6 million, or $0.13 a share, compared to $13.5 million, or $0.12 a share, year-over-year.
  • Excluding one-time charges, Apollo earned $0.28 a share, compared to $0.34 a share last year.
• Revenue fell from $834.4 million to $679.1 million.
• Analysts expected revenue of $689.4 million and earnings of $0.19 a share.

Monsanto Company (NYSE: MON)

• Monsanto earned $1.67 billion, or $3.15 a share, compared to $1.48 billion, or $2.74 a share, a year ago.
  • This beat analysts’ expectations of $3.07 a share.
• Net sales increased to $5.8 billion from $5.5 billion. 

Jos. A Bank Clothiers Inc. (NASDAQ: JOSB)

• Jos. A Bank earned $27.4 million, or $0.98 a share, compared to $28.4 million, or $1.01 a share, last year.
  • Excluding costs, adjusted earnings per share was $1.07.
• Revenue rose to $356 million.

Interest Rates

• The two-year Treasury rate remained at 0.45%.
• The five-year Treasury rate increased four basis points to 1.78%.
• The 10-year Treasury rate rose eight basis points to 2.80%.
• The 30-year Treasury yield increased nine basis points to 3.64%.

Disclosures

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