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Markets Close on a Positive Turn

Originally published: 02.01.14 by Margot Crabtree

Wall Street rose up and up to close out 2013, with the Dow industrials hitting their longest winning streak since March, then limped into 2014. As our trading session ended January 15, 2014, markets found some solid footing as earnings season began, and the S&P 500 closed out the session at an all-time high. Orders for durable goods were up by 3.5 percent in November, and even though new home sales fell in November, the government upwardly revised numbers for the earlier three months, and homebuilding stocks rose. 

Volume was light on Wall Street as markets entered 2014, and the economic news was largely positive. National factory activity as recorded in the Institute for Supply Management’s index showed a reading of 57 in December, and new orders reached a 3.5 year high. The Economic Cycle Research Institute said that its weekly leading index, a gauge of future growth, rose to 132.9, the highest reading since April 2010. The Commerce Department reported that construction spending increased 1 percent in November to its best level since March 2009 and the eighth straight month of gains. Despite the slow start — with the S&P beginning with the worst intro in a decade —

bank profits and technology shares pushed equities forward. “The market will take its direction from how well, or how poorly, corporate earnings season is unfolding,” said Phil Orlando, chief equity market strategist at Federated Investors. “I think we’re setting up for a positive surprise.” 

The HVACR Business Stock Index began 2014 rising in tandem with national markets, ahead 48.28 points, or 3.78 percent, to end at 1325.57. Advancing issues dominated declining issues at a 27-to-4 count. 

SPX Corp. rose 9.84 points, or 10.84 percent, and was one of five components in the index making more than a 7-point jump this session. SPX said it has inked a cooperation agreement with Relational Investors LLC, in which Relational has an opportunity to appoint Relational co-founder David Batchelder to the SPX board of directors. At the end of 2013, Relational held over 15 percent of SPX stock. SPX ended at 103.77, and was the top dollar gainer. 

After a hot run-up in 2013, General Motors said it expects modest pre-tax growth this year. Even so, a $1.1 billion restructuring plan for its European operations is expected to cut into its profit, leading to flat margins. “We’re taking advantage of the strength in the U.S. and China to engage in other areas such as our international operations,” said GM President Dan Ammann. Some analysts expect GM to hit sales of 16 million units, a level not seen since 2007. GM said it will pay a quarterly dividend for the first time since 2008. The company also appointed Mary Barra as CEO, the first woman to helm a global car company. GM inched south 0.66 points, or 1.65 percent, and was the top dollar and percentage loser. 

Echelon hitched its star to Google’s acquisition of Nest Labs, and increased 0.95 points, or 45.89 percent. Nest produces home automation devices; Echelon develops energy control networking solutions. ELON closed at 3.02, and was the top percentage gainer. 


 Margot Crabtree is president of Trade Trends, Inc., a financial data services provider. She has been offering market analysis with customized stock indices and financial commentaries since 1999. For additional information, visit www.tradetrendsonline.com.


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