Week in Review
New all-time highs continued for both the Dow Industrials and the S&P 500, up 1.0% and 1.4%, respectively for the week. The NASDAQ pushed higher by 57.38 points or 1.3% and the small-cap Russell 2000 Index jumped 26 points, equal to 2.2%. All industry sectors took part in the broad advance led by utilities, energy and healthcare. The Federal Reserve Open Market Committee meeting continued to be dovish; specifically the central bank’s position on interest rates has not changed much and the $10 billion per month easing in its bond-buying program continues. However, inflation fears came to the forefront, but investors appeared to shrug off any signs of higher interest rates by the Fed. Gold saw its biggest daily gain in nine months on Thursday breaking $1,300 an ounce. The iShares Gold Trust ETF (NYSE: IAU – $$12.73) is showing some signs of strengthening with tensions in Iraq heating up as well as other technical issues effecting gold prices. Even beleaguered Newmont Mining (NYSE: NEM – $24.86) saw its shares advance $1.46 on the week. Acquisitions by healthcare-related companies looking to save taxes by re-incorporating in Ireland or the U.K. continues with device maker Medtronic looking to take over Covidien and pharmaceutical company AbbVie eying Dublin-based Shire, Plc. These tax-haven inversions are the new game in town.
Oracle Corp. (NYSE: ORCL – $40.82) disappointed investors with less than stellar revenue and earnings growth in its final quarter of fiscal 2014, as it transitions from a pure server-based software company to cloud computing, where earnings will stretch out over longer periods of time. The shares were down as much as 10% after Thursday’s announcement, but recovered to end the week off only $1.32 after setting a new multi-year high before the news. Oracle is also flirting with the idea of acquiring hospitality software company Micros Systems and decided to pull the trigger by offering to take out privately held LiveLOOK, Inc., a provider of visual collaborative technologies to bolster its cloud customer-service offerings. In other blog portfolio news, aggressive choice Hess Corp. (NSYE: HES – $97.96) offloaded its 50% interest in an under-construction power plant in New Jersey, as it continues to re-shape its energy portfolio. HES hit a multi-year high of $97.99 on Friday, up 53% over the past year on its ongoing restructuring efforts and higher oil prices. The market will most likely move sideways until the second quarter earnings season begins in early July, unless pressures in Iraq swell or traders find other “news” worthy of moving the needle.
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