The stock markets in the United States ended the trading session higher as investors weigh economic data, corporate earnings, and monthly sales results of the auto industry.
Yesterday, the markets were down after investors decided to sell-off their stockholdings in small caps and biotechnology companies.
David Heidel, a regional investment director for the private client reserve at U.S. Bank, told Bloomberg. “This week felt like an unwinding of a lot of big trading positions that had been on for months and that had been extremely successful.”
Commenting on the market rally today, Heidel said, “This is a rebound from the tough days we had earlier this week. People are taking a look at potential bargains.”
On the other hand, Michael Ingram, a market strategist at BGC Brokers LP said, “Markets are becoming increasingly tactical and taking profits. The very basic issue is that markets want strong growth and zero rates forever. That’s simply not going to happen.”
The Institute for Supply Management (ISM) reported that the manufacturing sector expanded in April for the 28th consecutive month. The PMI recorded a 51.5%. The new orders index rose 1.7% to 53.5%. The production index climbed 2.2% to 56%.
The auto industry’s sales increased 5.6% to a seasonally adjusted annual rate of 16.5 million vehicles in April based on preliminary results.
Yesterday, the Department of Labor reported that the number of American workers who applied for unemployment benefits declined 34,000 to 262,000 for the week ended April 25. The Department of Commerce reported a 0.4% increase in consumer spending last month.
- Dow Jones Industrial Average (DJIA) – 18,024.06 (+1.03%)
- S&P 500- 2,108.29 (+1.19%)
- NASDAQ- 5,005.39 (+1.29%)
- Russell 2000- 1,228.14 (+0.66%)
- EURO STOXX 50 Price EUR- 3,615.59 (0.00%)
- FTSE 100 Index- 6,985.95 (+0.36%)
- Deutsche Borse AG German Stock Index DAX- 11,454.38 (+0.19%)
- Nikkei 225- 19,531.63 (+0.06%)
- Hong Kong Hang Seng Index- 28,133.00 (-0.94%)
- Shanghai Shenzhen CSI 300 Index- 4,749.89 (-0.51%)
Stocks in Focus
LinkedIn plummeted more than 18% to $205.21 per share. The company posted adjusted earnings of $0.57 per share on $638 million in revenue. Analysts expected the company to post $0.56 in earnings per share on $636 million in revenue.
LinkedIn beat estimates, but it was negatively impacted by its lower-than-expected guidance for the current quarter. The company expects to achieve adjusted EPS of $0.28 and revenue of around $670 million to $675 million. Analysts expected the company to generate $0.74 EPS on $717.2 million in revenue for the second quarter.
The stock price of Yum Brands increased almost 7% to $91.90 per share after activist investor Daniel Loeb disclosed a significant stake in the company. In a letter to investors, Loeb explained that his firm initiated a position in Yum Brands based on his belief that the company is in the “early stages of turning the page on recent troubles in its Chinese business.”
The shares of Ocwen Financial surged more nearly 21% to $10.26 per share after reporting its preliminary results. Analysts at Sterne Agee upgraded their rating on the stock to Buy and increased their price target to $12 per share.