Seven out of ten sectors end higher led by healthcare sector
U.S. stocks ended mixed on Tuesday, 18 February 2014. While Dow ended in the red, the Nasdaq Composite recording its eighth consecutive session of gains, the longest since July 2013. Equity indices kicked off the abbreviated trading week on a relatively quiet note. The benchmark index saw a brief dip at the open, but the weakness was erased promptly thanks to the early strength of the health care sector. Also weighing on the sentiment was the Empire State manufacturing activity index dropped by more than expected while a gauge of confidence among home builders dove in February.
The Dow Jones Industrial Average ended lower by 23.99 points (0.15%) at 1613.4 after component Coca-Cola reported disappointing earnings. The S&P 500 index closed 2.13 points, or 0.1%, higher at 1,840.76, extending gains from the previous two sessions. The Nasdaq Composite rose 28.76 points, or 0.7%, to 4,272.78.
Seven of 10 main sectors rose, with health-care stocks in the lead.
Shares of Coca-Cola were down 3.8% after the beverage company's fourth-quarter profit and revenue came in below analyst forecasts. BlackBerry was up 5.4% following news Friday that billionaire fund manager Dan Loeb took a stake in the company as part of his investment in struggling device makers.
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U.S. economic data released Tuesday included the Empire State manufacturing survey, Treasury international capital data, and the NAHB housing market index. The February NAHB Housing Market Index fell to 46 from 56 while the consensus expected the reading to hold at 56.
The Empire Manufacturing Survey for February registered a reading of 4.5, which was down from the prior month's unrevised reading of 12.5. Market expected the survey to decline to 7.5. Lastly, the December net long-term TIC flows report indicated a $45.9 billion outflow of foreign capital from U.S. denominated assets. This followed the prior month's $28.0 billion outflow.
A weaker U.S. dollar index was also a bullish underlying factor for the precious metals markets Tuesday, and bullish for the raw commodity sector, in general. It's been a calm trading week so far, with U.S. traders and investors coming back from a three-day holiday weekend on Tuesday. In overnight news, the Bank of Japan made a de facto monetary policy stimulus move Tuesday following weak gross domestic product data released Monday. The BOJ offered incentives to Japanese banks to lend more money.
Meantime, there was upbeat economic data coming out of China as foreign investment in the world's most populous nation and the world's second-largest economy rose during the month of January. That's a bullish underlying factor for the raw commodity sector, too.
Bullion prices ended with moderate gains on Tuesday, 18 February 2014. Gold futures posted modest gains after weaker-than-expected data on manufacturing activity in the New York area underlined concerns about the momentum of the economic recovery.
April gold rose $5.80, or 0.4%, to close at 1,324 an ounce in floor trading at the Comex division of the New York Mercantile Exchange. March silver gained 48 cents to trade at $21.90 an ounce.
Crude prices ended substantially higher on Tuesday, 18 February 2014. Economic data across the world and weak dollar pushed prices higher. Crude oil futures also surged on Tuesday, as a new winter storm hit the northeastern U.S. and spurred market expectations that demand for heating fuel would continue to rise. March crude oil rose $2.13, or 2.1%, to settle at $102.43 a barrel.
Treasuries ended near their best levels of the day with the 10-yr yield down four basis points at 2.71%.
Participation was a bit below average with only 709 million shares changing hands at the NYSE.
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while January Housing Starts, Building Permits, and PPI will all be reported at 8:30 ET. Also of note, the latest minutes from the January FOMC meeting will cross the wires at 14:00 ET.
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