Stocks Surge Notch up Best Gains of 2014
Stocks in the US started the trading session on a positive note as stock continued to rebound after hitting oversold levels on Wednesday. The ISM services report, showed strength despite the recent cold snap which leads traders to believe that the weakness in the manufacturing report, released by the ISM on Monday, was driven by the cold and snow experienced in January. On Friday, all eyes will be on the US employment report, expectations are for the US to increase payrolls by 190K jobs. For the day, all three major indices were in the black with the S&P 500 notching up a 22 point gain.
The Institute of Supply Management Services headline index rose to 54.0 from December’s 53.0 reading. Economists were looking for a smaller advance to 53.7. The all-important employment sub-component advanced to 56.4 from 55.6. The figures suggest that overall business activity in America’s services sector, which accounts for roughly 80% of the economy, accelerated more than expected in January, as did hiring in the sector.
On the employment front jobless claims decreased by 20,000 to 331,000 in the week ended February 1, 2014. That was slightly lower than the 335,000 forecast by economists and reversed most of the prior week’s gain.
In corporate news, Green Mountain’s (NASDAG:GMCR) shares soared on news that Coca Cola (NYSE:KO) will acquire a 10% holding in Green Mountain for $1.25 billion as part of a 10-year partnership in which it will exclusively sell Coke-branded pods for use with the upcoming Keurig Cold single-serve beverage system. The machine will make carbonated drinks, enhanced waters, juice drinks, sports drinks and teas.
Green Mountain Coffee Roasters reported Wednesday that FQ1 net profit jumped 28% to $138.2 million. Adjusted EPS was $0.96 and exceeded analyst projections, while revenue rose 3% to $1.38 billion but undershot forecasts. Pack revenue increased 8% to $931 million and helped to offset a dip in brewer and accessories sales.
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