Last week’s momentum continued to give stocks some tailwinds with quarterly earnings season drawing to a close.
The week began with stocks heading modestly higher, as Apple (AAPL) shares soared 1.79 percent to $528.99 with Carl Icahn’s decision to keep his big mouth shut about a share buyback program. Icahn’s time would probably be better spent if he could just focus on getting rid of his Herbalife stock (HLF). Meanwhile, vague references to a share buyback plan along with increasing dividend payouts sent Hasbro (HAS) shares skyrocketing 4.53 percent to $52.36 despite the fact that the company missed on earnings and revenue estimates.
The Dow Jones Industrial Average (DIA) picked up 7 points to finish Monday’s trading session at 15,801 for a 0.05 percent advance. The S&P 500 (SPY) rose 0.16 percent to close at 1,799.
The Nasdaq 100 (QQQ) climbed 0.57 percent to finish at 3,582. The Russell 2000 (IWM) advanced 0.20 percent to end the day at 1,118.
In other major markets, oil (USO) dipped 0.03 percent to close at $35.63.
On London’s ICE Futures Europe Exchange, March futures for Brent crude oil declined $1.01 (0.93 percent) to $107.84/bbl. (BNO).
April gold futures advanced $11.70 (0.93 percent) to $1,274.60 per ounce (GLD).
The transportation sector skidded off the pavement on Monday, as the Dow Jones Transportation Average fell 0.98 percent to 7,171, dropping further below its 50-day moving average of 7,271 (IYT).
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks soared as the yen weakened and held at 102.47 per dollar until Monday’s closing bell in Tokyo – at which point the yen immediately strengthened to 102.14 per dollar. Hmmmm … A weaker yen causes Japanese exports to be more competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average jumped 2.17 percent to 14,462 (EWJ).
In mainland China, stocks soared after the nation’s Ministry of Commerce reported that retail sales and catering increased by more than 13 percent above last year’s level during the week-long Lunar New Year holiday. Chinese automaker shares soared after the government announced that it will reduce its subsidies for development of electric cars by less than previously announced. Subsidies during 2014 will be reduced by only 5 percent, rather than the previously-announced 10 percent. 2015 will bring a 10 percent cut, rather than the previously-announced 20 percent reduction. The Shanghai Composite Index jumped 2.03 percent to 2,086 (FXI). Hong Kong’s Hang Seng Index declined 0.27 percent to 21,579 (EWH).
In Europe, the Euro STOXX 50 Index was able to spend a few minutes above its 50-day moving average before finally ending Monday’s session with a 0.20 percent decline to 3,032 – retreating below its 50-day moving average of 3,047. Its Relative Strength Index is 47.79 (FEZ).
Technical indicators revealed that the S&P 500 remained below its 50-day moving average of 1,809 despite advancing 0.16 percent to finish Monday’s trading session at 1,799. Its Relative Strength Index (RSI) climbed from 49.69 to 50.45. The MACD took another big step in its climb out of the basement and it is now poised to cross above the signal line, suggesting that the S&P could continue its advance during the immediate future.
On Monday, six sectors advanced and three sectors declined. The industrial sector took the hardest hit, with a 0.63 percent drop.
Consumer Discretionary (XLY): -0.06%
Technology: (XLK): +0.20%
Industrials (XLI): -0.63%
Materials: (XLB): +0.49%
Energy (XLE): -0.49%
Financials: (XLF): +0.09%
Utilities (XLU): +0.75%
Health Care: (XLV): +0.83%
Consumer Staples (XLP): +0.39%
Bottom line: The major stock indices made modest advances on Monday, as last week’s momentum was met with enough good news to keep most stocks out of the red.
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