For the week of Monday, April 28, 2014 through Friday, May 2, 2014:
- Standard & Poor’s 500 Index: 0.97%
- Dow Jones Industrial Average: 0.93%
- NASDAQ Composite: 1.20%
Stocks staged a late rally to finish higher on Monday, as investors learned of a blockbuster Big Pharma deal, with Pfizer possibly looking to buy AstraZeneca for about $100 billion. Monday’s rise helped reverse last Friday’s losses. The next day, stocks rose on an improving outlook for corporate earnings. On Wednesday, the Dow had its first record close of 2014 after the Fed said it would reduce its bond-buying program as expected. The Dow added 0.3%, ending slightly above its Dec. 31 record.
Thursday, investors digested mixed U.S. economic reports, while most European markets were closed for May Day. Friday’s payroll employment gains blew past consensus expectations, increasing by 288,000. Private payrolls rose by 273,000, and gains were broad-based across industries. Meanwhile, the unemployment rate fell to 6.3%. However, the decline has been attributed to a large drop in labor force participation. Even on the heels of a good employment report, the markets fell on Friday, possibly due to the increased fear of violence in the Ukraine.
Chain Store Sales Snapshot:
- The ICSC chain store sales index rose 1.6%.
- Year-over-year the index is 3.1% higher.
- The increase is encouraging, given the Easter Sunday store closures.
- April’s forecast is unchanged, with comparable store sales expected to rise more than 3%.
Case-Shiller Home Price Index:
- Existing-home price appreciation decelerated year-over-year in the three months ending in February relative to the same period in January.
- The 10-city composite index is up 13.1%.
- The 20-city composite is up 12.9%.
- Non-seasonally adjusted month-to-month:
- The 10-city composite index is flat.
- The 20-city composite index is flat.
- Seasonally adjusted month-to-month:
- The 10-city composite index is up 0.9%.
- The 20-city composite indexes is up 0.8%.
Conference Board Consumer Confidence:
- The Conference Board Consumer Confidence Index fell to 82.3 from 83.9 in March.
- Weaker perceptions of economic conditions was the main contributor to the decline.
MBA Mortgage Applications Survey:
- The MBA Mortgage Applications index fell, with the composite index losing 5.9%.
- The purchase index fell 4.4%.
- The refinance index fell 6.9%.
Gross Domestic Product:
- First Quarter real GDP rose 0.1%, according to the Bureau of Economic Analysis’ preliminary estimate.
- This was below expectations, and 2013’s fourth quarter’s 2.6% growth.
- Falling equipment investment, exports and inventory investment all contributed to the drag.
Federal Open Market Committee Meeting:
- The Federal Reserve lowered the monthly asset purchase pace another $10 billion, bringing it to $45 billion.
- The reduction was split between Treasuries and mortgage-backed securities.
- The total reduction in monthly asset purchases since December is $40 billion.
- Initial jobless claims rose 14,000 to 344,000.
- The 4-week moving average rose to 320,000.
AFLAC Inc. (NYSE: AFL)
- Aflac earned $732 million, or $1.60 a share, compared to $892 million, or $1.90 a share, last year.
- After one-time item adjustments, Aflac earned $1.69 per share.
- Revenue fell from $6.2 billion to $5.6 billion.
- Analysts expected $1.58 a share on revenue of $5.8 billion.
AGCO Corporation (NYSE: AGCO)
- AGCO Corp. earned $99.6 million, or $1.03 a share, compared to $118.0 million, or $1.19 a share, a year ago.
- Analysts expected $0.76 a share.
The Southern Company (NYSE: SO)
- Southern Company earned $368 million, or $0.39 a share, compared to $97 million or $0.09 a share, last year.
- Revenue rose to $4.64 billion.
- Analysts expected $0.56 a share on revenue of $4.03 billion.
Kellogg Company (NYSE: K)
- Kellogg’s revenue fell to $3.74 billion, while analysts expected $3.81 billion.
- Net income was $406 million, or $1.12 a share, compared to $311 million, or $0.85 a share last year.
Short-term rates slid, while rates at the longer-end rose.
- The two-year Treasury rate slipped two basis points to 0.42%.
- The five-year Treasury rate fell four basis points to 1.69%.
- The 10-year Treasury fell one basis point to 2.66%.
- The 30-year Treasury yield increased two basis points to 3.47%.