The stock markets in the United States fluctuated and eventually ended the trading with mixed results. The Dow Jones & S&P 500 gained slightly while the NASDAQ and Russell 2000 experienced a marginal decline.
The markets were impacted by the weak factory production in April, and unexpected declined of consumer confidence early in May.
The Federal Reserve reported that the manufacturing output was unchanged in April following a revised gain of 0.3% in March. According to the central bank, a small increase in the production of durables was offset by a small decline in the output of nondurables. Economists polled by Bloomberg were expecting a 0.2% increase in manufacturing output last month.
David Sloan, a senior economist at 4Casttold Bloomberg, “The manufacturing output is really pretty flat.” He believes that the manufacturing output will go from flat to modest growth as oil prices increase and the negative impact of port dispute fade. He is not optimistic about a strong growth.
On the other hand, the University of Michigan preliminary index of consumer confidence declined to 88.6% early in May from 95.9% in April.
“Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal 1st quarter (even if the underperformance was exaggerated by inadequate seasonal adjustments).
The decline was widespread among all age and income subgroups as well as across all regions of the country,” noted Richard Curtin, chief economist, Surveys of Consumers, University of Michigan.
On the other hand, Millan Mulraine, deputy head of U.S. research & strategy at TD Securities USA said, “It’s not very encouraging for growth prospects. The spate of numbers has been quite weak.”
Investors speculate that the Federal Reserve will continue to support the growth of the economy due to weak economic data.
Chad Morganlander, a money manager at Stifel, Nicolaus & Co. said, “The data plays into the renewed concern that economy in the second quarter will move at a glacial place, renewing hope that the Fed won’t move aggressively in 2015. “
“The market is listless today, and you had a big move yesterday that took everybody by surprise on the back of economic data,” he added.
- Dow Jones Industrial Average (DJIA) – 18,271.66 (+0.11%)
- S&P 500- 2,122.72 (+0.08%)
- NASDAQ- 5,048.29 (-0.05%)
- Russell 2000- 1,243.70 (-0.11%)
- EURO STOXX 50 Price EUR- 3,573.07 (-0.18%)
- FTSE 100 Index- 6,960.63 (-0.18%)
- Deutsche Borse AG German Stock Index DAX- 11,447.03 (-0.98%)
- Nikkei 225- 19,732.92 (+0.83%)
- Hong Kong Hang Seng Index- 27,822.28 (+1.96%)
- Shanghai Shenzhen CSI 300 Index- 4,617.47 (-1.77%)
Stocks in Focus
The stock price of Netflix increased more than 4% to $613.03 per share due to a report that the online video streaming company is in discussions to partner with a Chine media company supported by Jack Ma. Netflix aims to enter the $5.9 billion online video market in China. Netflix believes that live sports and award shows will be the saving grace for television producers in the future.
The shares Yum! Brands climbed more than 4% to $93.96 per share. John Ivankoe, an analyst at JP Morgan Chase, upgraded his rating for the stock from Neutral to Overweight.
Pepco Holdings surged more than 8% to $27 per share. Maryland Public Service Commission approved its$6.8 billion merger deal with Exelon.