Stock market news for May 6, 2021
US equity markets closed mixed on Wednesday. The enthusiasm of market participants for the good earnings performance was partly offset by concerns about higher inflation and a hike in the benchmark interest rate. The economic data was also mixed. The Dow and S&P 500 ended in green while the Nasdaq Composite ended in red.
How did the benchmarks perform?
The Dow Jones Industrial Average (DJI) rose 0.3% to close at 34,230.34, marking a new closing high. In intraday trading, the blue chip index set a new all-time high of 34,331.20. Notably, 18 components of the 30-stock blue chip index ended in the green while 12 in the red.
The high tech Nasdaq Composite closed at 13,582.42, down 0.4% on weak performance from large cap tech stocks. Investors remained concerned about the earlier-than-expected rise in the benchmark interest rate, which is detrimental to growth sectors like technology.
Meanwhile, the S&P 500 rose 0.1% to close at 4,167.59. Energy Select Sector SPDR (XLE) and Materials Select Sector SPDR (XLB) grew by 3.2% and 1.3% respectively, while Utilities Select Sector SPDR (XLU) and Real Estate Select Sector SPDR (XLRE ) fell 1.7% and 1.5%, respectively. Notably, six of the benchmark index’s eleven sectors closed in the red and five in the green.
The CBOE volatility index (VIX) measure of fear fell 1.7% to 19.15. A total of 8.35 billion shares was traded on Wednesday, lower than the last 20 sessions average of 9.94 billion. Decliners outnumbered advancers on the NYSE by a 1.11-to-1 ratio. On the Nasdaq, a 1.32-to-1 ratio favored declining issues.
Strong earnings results
General Motors Co. GM reported adjusted earnings of $ 2.25 per share for the first quarter of 2021, beating the Zacks consensus estimate of $ 1.02. The higher than expected profits of its North American and international units led to this outperformance. (Read more)
The Scotts Miracle-Gro Co. SMG came out with a quarterly profit of $ 5.64 per share, beating Zacks’ consensus estimate of $ 5.51 per share. The company reported revenue of $ 1.83 billion for the quarter ended March 2021, beating Zacks’ consensus estimate by 5.14%. (Read more)
Barrick Gold Corp. GOLD came out with quarterly earnings of $ 0.29 per share, beating Zacks’ consensus estimate of $ 0.26 per share. This compares to a profit of $ 0.16 per share a year ago. These figures are adjusted for non-recurring items. (Read more)
As a result, the stock prices of General Motors, The Scotts Miracle-Gro and Barrick Gold increased by 4.1%, 6.3% and 1.1% respectively. All three actions carry a Zacks # 3 rank (Hold). You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.
The Institute of Supply Management reported that its Service Purchasing Managers (PMI) index fell to 62.7% in April from 63.7% in March. The consensus estimate was 64.1%. Notably, any reading above 50 indicates an expansion of service activities. On the other hand, IHS Markit reported that its services sector PMI index jumped to 63.5% in April from 59.7% in March, marking its biggest monthly gain since the index was created in October 2009. .
The automatic data processing indicated that the private sector wage bill had increased by 742,000 in April. Data for the previous month has been revised up to 565,000 from 517,000 reported earlier. Large companies added 277,000 new employees. Medium-sized companies recruited 230,000 people. Small businesses hired 235,000 people. Manufacturers and construction companies together have created nearly 100,000 jobs.
The Energy Information Administration reported that US crude inventories fell 8 million barrels for the week ended April 30 to 485.1 million barrels. Crude oil exports increased to 4.1 million bpd, the highest since March 2020. In addition, refining production was at its highest since March 2020.
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General Motors Company (GM): Free Inventory Analysis Report
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