Markets
For the week of Monday, February 24, 2014 through Friday, February 28, 2014:
- Standard & Poor’s 500 Index: 1.30%
- Dow Jones Industrial Average: 1.42%
- NASDAQ Composite: 1.06%
Stocks began the week with a strong rally, with the S&P 500 closing just shy of a record. The index still notched a new all-time intraday high; however, a late-day pullback pared most of those gains. The markets ended modestly lower Tuesday as investors continued to digest weak economic data. The Financial and Telecommunication sectors led seven of 10 sectors lower for the day. By mid-week, the markets closed higher, but the S&P 500 failed to close in record territory for a third-straight session. It is likely that short-term traders were waiting to see if the S&P could hold all-time closing highs before buying or selling. Although jobless claims rose, stocks erased losses Thursday after durable goods fell less than expected. On Friday, the S&P 500 closed at a record high, although well off session peak levels as concern about tensions in Ukraine caused investors to sweep some profits off the table. The Commerce Department said U.S. GDP grew at a 2.4% rate in the fourth quarter, down from the prior estimate of 3.2%, on a retreat in private inventory investment and decrease in federal and state spending. The University of Michigan Consumer Sentiment Index hit 81.6 this month, versus 81.2 in January, exceeding an expected reading of 81.3.
Economic Data
Chain Store Sales Snapshot:
- Chain store sales growth decelerated to 0.6%.
- President’s Day sales showed similar results to last year.
- Year-over-year growth came in at 1.4%.
Case-Shiller Home Price Index:
- Existing-home price appreciation decelerated on a year-ago basis in the three months ending in December relative to the same period in November.
- The 10-city composite is 13.6% higher than last year.
- The 20-city composite is 13.4% higher than last year.
- Non-seasonally adjusted month-to-month:
- The 10-city composite index was unchanged.
- The 20-city composite fell 0.1%.
MBA Mortgage Applications Survey:
- Mortgage application activity fell for the third week in a row.
- The composite index fell 8.5%.
- The purchase index fell 3.5%.
- Refinance activity fell 11.4%.
- Mortgage interest rates rose slightly.
New Home Sales:
- New single-family homes sales rose to an annualized pace of 468,000 units.
- The pace of new-home sales is up 9.6% from December and up 2.2% from last year.
- Months of supply fell to 4.7
- The median new-home price is 3.4% higher year-over-year.
Jobless Claims:
- Initial claims for unemployment increased 14,000 to 348,000.
- The previous week’s claims were revised down 2,000 to 334,000.
- The four-week moving average remained 338,250.
- Continuing claims rose 8,000 to 2.96 million.
Durable Goods:
- New orders for durable manufactured goods slid 1%.
- Excluding transportation, new orders rose 1.1%.
- Total shipments slipped 0.4%.
- Inventories increased 0.3%.
- Core capital goods orders increased 1.7%.
- Shipments fell 0.8%.
Earnings:
The Home Depot (NYSE: HD):
- Home Depot earned $1.01 billion, or $0.73 a share, compared to $1.02 billion, or $0.68 a share last year.
- Analysts expected $0.71 a share.
- Home Depot cut total operating costs 4% in the quarter.
- Sales fell 3% to $17.70 billion, just short of analysts’ expectations of $17.91 billion.
- Same store sales increased 4.4% overall and 4.9% at U.S. stores.
Lowe’s Companies, Inc. (NYSE: LOW):
- Lowe’s earned $306 million, or $0.29 a share, compared to $288 million, or $0.26 a share, year-over-year.
- Analysts expected $0.31 a share.
- Sales increased 5.6% to $11.66 billion in the fourth-quarter, just short of analysts’ estimates of $11.67 billion.
- Same store sales rose 3.9%.
Target Corp. (NYSE: TGT):
- Target profit fell 46% in the quarter after a security breach that revealed credit card numbers and other information of millions of its customers.
- Revenue also fell 5.3%.
- Target reported earnings of $520 million, or $0.81 a share, compared to $961 million, or $1.47 a share, last year.
- Revenue fell to $21.5 billion.
- Same store sales fell 2.5%.
- Analysts expected $0.80 a share on revenue of $21.5 billion.
Best Buy Co. Inc. (NYSE: BBY):
- Best Buy earned $293 million, or $0.83 a share, compared to a loss of $409 million, or $1.21 a share, a year ago.
- Best Buy earned $1.24 a share excluding costs, beating analysts’ estimates of $1.01 a share.
- Revenue fell 3% to $14.47 billion, short of the $14.67 billion expected by analysts.
Interest Rates
- The two-year Treasury rate stayed at 0.32%.
- The five-year Treasury rate fell five basis points to 1.49%.
- The 10-year Treasury rate slid eight basis points to 2.65%.
- The 30-year Treasury yield fell nine basis points to 3.60%.
Disclosures
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.
