The stock markets in the United States rallied despite the report from the Institute for Supply Management (ISM) that the manufacturing activity declined in January. The markets gained because of the strength of equities in the energy sector including Exxon Mobil, Chevron, Halliburton and others.
The ISM Manufacturing Index declined 1.6% to 53.5% in January, lower than the 54.5% estimated by economists. The institute reported that the new orders index dropped 4.9% to 52.9% while the production index fell 1.2%.
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On the other hand, the Department of Commerce reported that personal income increased 0.3$ to $41.3 trillion in December. The agency also reported that the disposable personal income (DPI) increased 0.3% or $35.8 billion while the personal consumption expenditures (PCE) declined 0.3% or $40 billion last month.
Despite the decline in consumer spending, Russell Price, a senior economist at Ameriprise Financial told Bloomberg, “Consumers are in a good mood coming into 2015. We think that’s likely to continue. The prospects for 2015 look very encouraging.”
Market observers believed that consumers took a break after their aggressive spending over the past two months. Many consumers shopped earlier in October and November for the holiday season to take advantage of the promotions offered by companies.
Separately, Bloomberg reported that Jonathan Krinsky, chief market technician at MKM Holdings predicted that the S&P 500 Index may decline 6% to 7% to 1,850 points over the next few weeks.
According to Krinsky, U.S. equities are poised for more declines ahead based on different factors such as increasing intraday volatility, gains among fewer individual stocks, complacent trader sentiment and weakness in other markets.
- Dow Jones Industrial Average (DJIA) – 17,361.04 (+1.14%)
- S&P 500- 2,020.85 (+1.30%)
- NASDAQ- 4,676.69 (+0.89%)
- Russell 2000- 1,175.51 (+0.87%)
- EURO STOXX 50 Price EUR- 3,370.11 (+0.56%)
- FTSE 100 Index- 6,782.55 (+0.49%)
- Deutsche Borse AG German Stock Index DAX- 10,828.01 (+1.25%)
- Nikkei 225- 17,558.04 (-0.66%)
- Hong Kong Hang Seng Index- 24,484.74 (-0.09%)
- Shanghai Shenzhen CSI 300 Index- 3,353.96 (-2.34%)
Stocks in Focus
The stock price of Exxon Mobil climbed 2.76% to $89.58 per share. The company posted earnings of %1.56 per share, higher than the $1.33 per share consensus estimate of Zack’s analysts for the fourth quarter. Its total revenue declined to $87.3 billion from $110.9 billion in the year-ago quarter.
Chevron gained 3.44% to $106.06 per share. The company appointed Jeanette Ourada as corporate vice president and comptroller starting April 1. On the other hand, analysts at Barclays reduced their price target for the stock to $110 per share.
The stock value of PostRock Energy Corporation surged more than 42% to $2.20 per share. The company is among the highest gainers on NASDAQ.