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Benchmarks finished flat on Friday with the Nasdaq and the S&P 500 notching record close on the back of strong gains in consumer staples and discretionary shares. Consumer staples shares were boosted by gains in shares of Costco following the release of its strong quarterly results. Moreover, strong earning and upbeat full year forecast from Ulta Beauty led the consumer discretionary sector northward. Further, investors digested the mixed bag of economic data released on Friday. The U.S. stock market remained closed on Monday for the Memorial Day holiday.
For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article.
The Dow Jones Industrial Average (DJI) declined 2.67 points to close at 21,080.28. The S&P 500 rose 0.75 points to a record close at 2,415.82. The S&P 500 posted 20th record of the year on Friday, beating the number of records posted by the index in the previous year.
The tech-laden Nasdaq Composite Index advanced 0.1% to a record close at 6,210.19, marking its 35th record close in 2017. Both the Nasdaq and the S&P 500 posted gains for a seventh consecutive session on Friday. A total of around 5.2 billion shares were traded on Friday, marking the lowest volume of trade for the year. Decliners outnumbered advancing stocks on the NYSE by 1,527 to 1,213.
S&P 500 Boosted By Consumer Staples
Consumer staples shares gained on Friday following the release of better than expected earnings results from Costco Wholesale Corporation (COST – Free Report) . Shares of Costco increased 1.8% after the company posted better-than-expected fiscal third-quarter earnings results.
Costco Wholesale reported adjusted quarterly earnings of $1.40 per share that surpassed the Zacks Consensus Estimate of $1.31. Moreover, total revenue came in at $28,860 million that edged past the Zacks Consensus Estimate of 28,654 million and jumped 7.8% year over year. (Read More)
The broader Consumer Staples Select Sector SPDR (XLP) advanced 0.4%, emerging as the best performing sector of S&P 500. Some of its key holdings including Procter & Gamble (PG – Free Report) and Altria Group Inc (MO – Free Report) gained 0.5% and 0.4% respectively. Both the company possess Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Consumer Discretionary Shares Gain
Consumer discretionary shares moved north led by gains in shares of Ulta Beauty (ULTA – Free Report) of 3.2% after the company raised its comps and earnings outlook for fiscal 2017. Following an excellent quarter, the company now expects to deliver comps growth in the range of 9–11%, up from the old projection of 8–10%.
For fiscal second quarter, the company anticipates net sales in a range of $1,257–$1,278 million, compared with $1,069 million delivered in the prior-year quarter. Earnings per share for the fiscal second quarter are expected in the range of $1.72–$1.77, compared with $1.43 earned in second-quarter fiscal 2016. (Read More)
The Consumer Discretionary Select Sector SPDR (XLY) increased 0.3%, emerging as the second biggest gainer of S&P 500. Some of its key holdings including AutoZone Inc (AZO – Free Report) and Genuine Parts (GPC – Free Report) gained 1.4% and 2.1% respectively.
As per the U.S. Census Bureau, new orders for manufactured durable goods in April fell 0.7% to $231.2 billion against the consensus estimate of a decrease of 1.9%. This decrease followed four successive increases, including a revised 2.3% increase in March.
As per the “second” estimate released by the Bureau of Economic Analysis, real gross domestic product (GDP) recorded an increase at an annual rate of 1.2% from the previous estimate of 0.7%in the first quarter of 2017. The consumer spending was also revised upward from 0.3% to 0.6%.
For the week, the Nasdaq, the Dow and the S&P 500 advanced 2.1%, 1.3% and 1.4% respectively. On Wednesday, Federal Open Market Committee released minutes from the Fed’s meeting held on 2-3 May. As per the minutes, Fed officials agreed to trim down Fed’s $4.5 trillion balance sheet. The central bank also indicated that it may raise interest rates in its next meeting in June.
The Trump administration released its budget proposal which was more or less in line with expectations. The budget plan seeks to cut federal spending by $3.6 trillion with a focus on balancing the budget over the next decade through cuts in healthcare and food assistance programs.
Stocks that made Headlines
Despite a challenging retail landscape, PVH Corporation (PVH – Free Report) continued its superb run, as its first-quarter fiscal 2017 results marked the company’s third consecutive sales beat, with earnings keeping its positive surprise streak alive for the 12th straight time. (Read More)
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