Only on last week, the benchmark stock gauge of US, Standard & Poor’s 500 Index marked the biggest weekly loss in the last 5 months. However, the US stocks have risen now, mainly because of the rally in commodity prices which spurred the raw material and energy producers. The S&P 500 increased by 0.5% and is currently at 1,562.50. On last week, the gauge went down by 2.1%, marking its biggest drop since last November. The earnings figures of both International Business Machines Corp and Bank of America Corp missed the estimates and this played a big part in declining the stock figures.
According to the Chief Investment Officer of Philadelphia Trust Co., Richard Sichel, US is currently in the middle of earnings season and hence the same will continue to be a key driver in determining the gauge’s performance. Sichel added that for investors it is important to listen to what the management teams are saying and how optimistic or pessimistic are they sounding while talking about the possible future growth.
Incidentally, on today, 8 companies listed under the S&P published their quarterly earnings figures including Texas Instruments and Netflix. So far, in this year, 106 S&P 500 listed companies have reported the earnings and 72 out of those have exceeded the predictions made by the analysts. In the first 3 months of the current year, profit at the S&P 500 listed companies to decline by 1.1%, as far as forecasts made by economists are concerned. If this happens, it will be the first year-over-year decrease since 2009.
Among companies, Caterpillar increased by 2.8% as it predicts output to increase in the largest economy in Asia in the next quarter. The company also has plans of buying back stock. A statistics released by the National Association of Realtors showed that the purchases of previously owned houses, declined by 0.6% to an annual rate of 4.92 million in the last month. Prices on the other hand jumped up reflecting more demand for the higher priced houses.
As stated by the Fund Manager of Christiana Trust, Thomas Nyheim, the home sales number was not at all encouraging for the market; however, it is still true that the housing market is showing modest improvement on a whole. Economic outlook of US looks to improve gradually and that most certainly is good news.