The Joplin Globe, Joplin, MO

Business

January 7, 2014

US stocks rise, breaking a three-day slump

NEW YORK — U.S. stocks are rising Tuesday after the Standard & Poor’s 500 index fell for the first three trading days of the New Year.

JANUARY STATS: The S&P 500’s start to 2014 was the worst opening to a year since 2005. The last time the index closed lower for four straight days to begin a year was 1978, according to S&P Capital IQ. Even though the market ended up in both those years, a weak January is typically a harbinger of a weak year for the stock market. The performance of stocks in January has predicted the trend for 62 of the last 85 years.

The S&P 500 is 0.6 percent lower for the month.

KEEPING SCORE: The Standard & Poor’s 500 index rose 11 points, or 0.6 percent, to 1,838 as of 11:26 a.m. Eastern time. The Dow Jones industrial average climbed 120 points, or 0.7 percent, to 16,544. The Nasdaq composite gained 36 points, or 0.9 percent, to 4,150.

YELLEN EFFECT: Janet Yellen will take the helm of a Federal Reserve after the Senate easily approved her nomination Monday. The vote puts an economist in the post who has backed the Fed’s recent efforts to stimulate the economy with low interest rates and huge bond purchases.

The confirmation is a boon for stock investors, reminding them that the Fed’s policies of stimulating the economy will likely continue, said Kristina Hooper, U.S. Investment Strategist at Allianz Global Investors.

“It’s just a nice little halo effect,” said Hooper.

LEADING SECTORS: Nine of the 10 industry groups in the S&P 500 rose. Health care stocks were the biggest gainers, advancing 1 percent. Materials companies were the worst performers and traded flat.

SHRINKING DEFICIT: The U.S. trade deficit fell in November to its lowest level in four years, an encouraging sign for the economy. Gains in energy production and stronger sales of American-made airplanes, autos and machinery lifted exports to an all-time high, the Commerce Department said Tuesday.

TOY STORY: Mattel fell 48 cents, or 1 percent, to $46.14, after analysts at Goldman Sachs advised their clients to sell the toy retailer’s stock. Goldman is predicting that the company’s earnings will struggle to match expectations as sales stagnate.

TREASURYS AND COMMODITIES: The yield on the 10-year Treasury note fell to 2.96 percent from 2.96 percent Monday. The price of oil rose 43 cents, or 0.5 percent, to $93.85 a barrel. Gold fell $11.80, or 1 percent, to $1,226 an ounce.

 

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