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May 2014 — Volatile Markets End Mixed

Originally published: 05.01.14 by Margot Crabtree


Wall Street see-sawed this month, with geo-political pressures weighing on markets and economic data — in general — trending upward. As our trading session ended April 15, 2014, retail sales numbers and earnings results boosted all sectors except tech into positive terrain. Bio-techs stumbled as our session began, while uncertainty in China growth and tensions in Russia kept the geo-political pot bubbling, and comments from Fed chief Janet Yellen indicated that the central bankers are eyeing interest rate hikes down the road.

The Commerce Department reported that permits to build new homes — an indicator of future housing health — rose to the highest level in four months. The Thomson Reuters/University of Michigan index of consumer sentiment fell to 80.0 in March, down from 81.6 the month before.

In early April, payroll company ADP said that private companies added 191,000 jobs in March, and upwardly revised February numbers to 153,000, from an earlier-reported 139,000. Then, the Labor Department reported that employers added 192,000 jobs in March, below what analysts expected. The rate of hiring in the private sector reached a milestone in regaining the employment that disappeared in the 2007-2009 recession, when 8.8 million jobs were lost; 8.9 million jobs have since been created.

The supply sector index from the Institute for Supply Management rose to 53.1 in the month, from 51.6 in February. The Commerce Department reported that factory orders improved 1.6 percent in February, the strongest in five months.

“Weakness in the biotech and momentum names is getting investors worried about where the market is headed in the near term, eventually triggering a sell-off in everything,” said Robert Pavlik, chief market strategist at Banyan Partners in New York. “Our long-term outlook on the market hasn’t changed because if you understand why the market is selling off, you know it’s not rational, that it doesn’t make sense.”

The HVACR Business Stock Index marched solidly into positive terrain, up 31.93 points, or 2.53 percent, closing at 1292.62. Advancing issues squeaked past declining issues at a 16-to-15 count.

Siemens rose 5.97 points, or 4.75 percent, and closed at 131.72. SI sold its Environmental Systems and Services to Foster Wheeler’s Global Power subsidiary. The transaction is expected to close in the second quarter. Siemens has also received a $230 million order for 32 diesel-electric passenger locomotives, and options for another 225 locomotives, valued at up to $1.5 billion. SI was the top dollar gainer.

Despite an upgrade, shares of Lennox International slid 4.54 points, or 4.96 percent. Investment firm Wells Fargo upped its rating to “outperform” from “market perform,” citing improvement in the company’s market share. LII closed at 87.05, and was the top dollar loser.

LSB Industries rose this session on the news that its subsidiary El Dorado Chemical will not renew its exclusive agreement with Orica International for ammonium nitrate.

LXU Chairman Jack Golsen said, “As a result of the exclusivity provision in our current Agreement with Orica, we cannot sell ammonium nitrate produced at our El Dorado, Arkansas facility into the explosives market.”

The current agreement will expire April 9, 2015. LXU added 3.11 points, or 9.10 percent, and was the top percentage gainer. LXU ended at 37.28.

 


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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