On Friday, the US stock market gave up huge profits and finished with marginal gains. The dividend stocks belonging to the banking sector and technology sector did well where as stocks paying huge dividends were knocked down.
Stocks were progressing towards huge gains early Friday as investors both in the US and China were spending more. Dividend stocks from the banking sector soon saw a boom as JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE C) announced encouraging quarterly results. However, as the day progressed, the profits soon started fading away as the stocks from the healthcare sector fell and oil prices continued to drop.
After seeing a jump of 162 points early in the day, the Dow Jones Industrial Average (INDEXDJX: .DJI) settled at a gain of 0.2%, or 39.44 points, and finished at 18,138.38. The Standard & Poor’s 500 gained 0.43 points to finish at 2,132.98 whereas Nasdaq Composite gained 0.83 points to finish at 5,214.16.
Dow Jones gains, for the most part, were governed by Goldman Sachs (NYSE:GS) after the British Government voided a lawsuit against the company, which was worth $1 billion. As a result the company’s stocks gained a profit of $3.10, an increase of 1.9%, and ended up at $170.52.
Bond prices decreased and as a result the yield rose from 1.75% to 1.8% on the 10-year Treasury note. Better bond yields help banks to gain better profits as they tend to increase interest rates on the loans. Apart from this, encouraging quarterly results from JPMorgan and Citigroup also helped stocks from the financial sector to perform well on Friday.
According to trade analysts, the aforementioned results can also help raise the stocks of other financial institutions such as BlackRock (NYSE:BLK), Morgan Stanley (NYSE:MS) and Charles Schwab (NYSE:SCHW) which are going to announce their quarterly results next week.
Increase in bond yields created a center of attention in investors mind and as a result they sold large dividend paying stocks such as utilities and real estate investment trusts. These high dividend paying stocks may be of interest to investors only when bond yields are low but not when they are doing good. This resulted in the downfall of the stock prices of Pacific Gas and Electric Company, or PG&E (NYSE: PCG), by $0.57 to finish at $59.8 and Duke Energy (NYSE:DUK) lost $0.73 to finish at $77.21.
Technology shares saw an increase as investors in China started to spend more. This favorable trend helped technology companies recover some of their losses suffered on Thursday. Microsoft (NASDAQ:MSFT) gained $0.50 and ended up at $57.42, Intel (NASDAQ:INTC) gained $0.48 cents to finish at $37.45 and Apple (NASDQ:AAPL) rose by $0.68 to stand at $117.66.
According to Commercial Department’s report, sales in the departmental stores fell and the retail business rose as more and more people have started shopping online. As a result Kohl’s Corporation (NYSE:KSS) lost $1.44, or 3.2%, and ended at $43.68 and Macy’s (NYSE:M) lost $1.23, or 3.3%, and ended up at $35.57.
Hewlett Packard (NYSE:HPQ) lost $0.67, or 4.4%, to finish at $14.48 as soon as it announced that it will soon be laying off between 3,000 and 4,000 employees within the next three years. Twitter (NYSE:TWTR) lost $0.91 or 5.1% and stood at $16.88 after Salesforce.com announced that it is no longer interested in acquiring the company. Twitter altogether lost 32% of its value since 5 October.
Energy companies traded low as crude oil prices fell in New York by $0.09 and recorded a low price of $50.53 per barrel. The international standard for crude oil, Brent crude (London), fell $0.08 and finished at $51.95 a barrel driving down the stocks of energy companies.
Healthcare stocks, which did not perform well this year, slipped as well. Mylan (NASDAQ:MYL), the EpiPen maker, lost $1.39 or 3.7% to finish at a three-year low of $36.49. Similarly, Celgene (NASDAQ:CELG), a cancer drug maker, stock prices dropped by $2.13 or 1.7% to finish at $98.50.
The value of gold fell by $2.10 ending at $1,255 per ounce. The cost of silver dropped by $0.02 and finished at $17.44 per ounce. The cost of copper stood at $2.11 per pound after losing $0.01.
The value of the US dollar increased JPY104.18 from JPY103.60 and the value of the Euro got amplified to $1.0983 from $1.1053.