Markets
For the week of Monday, May 5, 2014 through Friday, May 9, 2014:
- Standard & Poor’s 500 Index: -0.05%
- Dow Jones Industrial Average: 0.56%
- NASDAQ Composite: -1.18%
Stocks started the week recovering from an early slide on Monday to end the day higher. Investors weighed disappointing earnings news and a mixed bag of economic data from China, which likely contributed to the volatility in stocks on Monday. The next day, stocks closed broadly lower, with declines concentrated in the shares of smaller companies and tech stocks. Worries about lofty valuations have caused stocks to struggle for much of the year, with many investors saying current share prices are justified only if economic growth in the U.S. speeds up.
By mid-week, stocks ended mostly higher; however, technology shares trading at pricey valuations continued their decline. Thursday saw some positive action as stocks rose after an upbeat report from the job market. This brought the Dow Jones Industrial Average close to an all-time high. Indices closed in green territory on Friday, with stocks stepping up in the final hour of trading. International Business Machines (NYSE: IBM) led the Dow to a new record high. On another note, Apple Inc. (NASDAQ: AAPL) avoided the tech sector tick up. The iPhone innovator traded lower on news that it is close to paying $3.2 billion for Beats Electronics.
Economic Data
ISM Services Index:
- The Institute for Supply Management’s nonmanufacturing index rose to 55.2 from 53.1 in April.
- Overall, the details were generally upbeat in April.
- New orders index increased 4.8 points to 58.2.
- The business activity index increased from 53.4 to 60.9.
- New exports orders added 7.5 points to 57.
- Overall, the details were generally upbeat in April.
Chain Store Sales Snapshot:
- The ICSC chain store sales index fell 2% for the week.
- Year-over-year, the index increased 2%.
International Trade:
- The U.S. foreign trade deficit narrowed to $40.4 billion in March
- Exports increased to $193.9 billion in March from $190 billion.
- Imports increased to $234.3 billion from $231.8 billion in February.
- February’s trade deficit was revised to $41.9 billion.
MBA Mortgage Applications Survey:
- The mortgage applications survey composite index increased 5.3%.
- The purchase index increased nearly 9%.
- The refinancing index rose 2.4%.
Productivity and Costs:
- Nonfarm business productivity fell 1.7%, seasonally adjusted.
- Fourth quarter productivity was revised up to 2.3% from 1.8%.
Jobless Claims:
- Initial claims for unemployment insurance fell 26,000 to 319,000.
- The four-week moving average increased 4,500 to 324,750.
- Continuing claims fell 76,000 to 2.69 million.
Earnings:
American International Group, Inc. (NYSE: AIG)
- AIG earned $1.61 billion, or $1.09 a share, compared to $2.21 billion, or $1.49 a share, last year.
- Excluding certain items, the company earned $1.21 a share.
- Analysts expected $1.06 a share.
The Walt Disney Company (NYSE: DIS)
- Boosted by the success of “Frozen,” Disney beat expectation for earnings.
- Disney earned $1.9 billion, or $1.11 a share, compared to $1.5 billion, or $0.79 a share.
- Analysts expected $0.96 a share.
- Disney’s Movie Studio segment operating income quadruple to $475 million, compared to $118 million last year.
Whole Foods Market, Inc. (NASDAQ: WFM)
- Whole Foods reported flat earnings year-over-year, at $142 million, or $0.38 a share.
- However, same-store sales increased 4.5%.
Interest Rates
- The two-year Treasury rate fell two basis points this week to 0.40%.
- The five-year Treasury rate slid two basis points to 1.65%.
- The 10-year Treasury rate increased three basis points to 2.62%.
- The 30-year Treasury yield rose three basis points higher to 3.40%.
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.
