US Stocks Week Ended May 9, 2014
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The Dow Jones Industrial Average closed the week at an all-time high of 16,583.34. Large-cap stocks performed better this week than their mid or small cap counterparts. The S&P 500 Large-cap index had a -0.05% return, while the S&P 400 Mid-cap index returned -0.54% and the S&P 600 Small-cap returned -1.50%. Internationally, China announced that manufacturing contracted for the fourth month in a row. Political tensions between Russia and Ukraine continued to escalate earlier in the week. However, Thursday and Friday presented a potential turning-point in the crisis, when Mr. Putin urged pro-Russian factions to postpone political referendums and called for troops to pull back from the border. U.S. quarterly corporate earnings season is coming to a close as 451 of the S&P 500 constituents have announced their earnings. Of the 451 announcements, nearly 76% have beaten analyst estimates for earnings while 53% have surpassed analyst estimates for revenue. Earnings have grown 5.5% and sales nearly 3% from the same quarter last year. DirectTV was up over 10% for the week as persistent rumors that AT&T Inc. could be acquiring the satellite television provider sent shares soaring. Whole Foods Market Inc. announced they were cutting their fiscal year forecasts citing increasing competition and a need to lower prices to stay competitive in the organic food space, the stock tumbled over 18% on the news. Tesla Motors Inc. dropped over 11% on news that their R&D costs will rise 30% in the next quarter and that battery supply will continue to constrain their production but should improve in the 3rd quarter. Apple Inc. closed above $600 a share on Tuesday for the first time since October of 2012. Friday, the Apple rumor mill was swirling that they might acquire Beats Electronics LLC. for $3.2b. We remain positive on U.S. equities as corporate profits continue to be strong, employment continues to improve and overall valuations remain attractive.
Posted on Monday, May 12, 2014 @ 8:18 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.