U.S. stock prices ended April on a down note, with the S&P 500 and the NASDAQ both recording losses for the month while the Dow eked out a nominal increase. All three indexes fell on Monday, mostly following Europe’s lead to lower prices, with little in the way of economic news to move them higher. The Dow was the best performer among the major U.S. stock market averages both on Monday and for all of April; Monday’s decline was just 0.1%, leaving the Dow basically unchanged for the month. NASDAQ lost 0.7% for the day and 1.5% for the month, while the S&P fell 0.4% on the final day of April, bringing its loss for the month to 0.8%.
Declines in the NASDAQ and S&P 500 indexes were influenced by Apple’s 3% drop Monday to $584, a loss of 2.7% for the month. Despite declining 13 of the last 15 days of April, Apple has still posted a 44% rise to date in 2012, an important factor in the S&P 500’s 11% rise this year and NASDAQ’s 17%. Barron’s Magazine has speculated about the possible addition of Apple and Google to the Dow 30 – Alcoa, Hewlett-Packard and Bank of America are some potential candidates to exit the blue-chip index – but their high share prices (Google is also around $600) make the move problematic unless there is to be a change in the Dow’s price-weighted computation.
U.S. bond prices were up slightly on Monday and outpaced stock prices in April. The Barclays U.S. bond market aggregate returned roughly 1.1% during April, the Barclays Treasury composite returned 1.4%, and its TIPS composite had a 2.2% return. The yield on the 30-year Treasury bond closed Monday at 3.11%, down 23 basis points from where it began the month, while the 10-year yield was at 1.92%, down 30 basis points from the 2.22% rate it yielded at the end of March. Oil prices were down slightly on Monday, while natural gas futures jumped 5.6%, reportedly on supply cuts.
In economic news, personal income for March came in slightly better than expected, while consumer spending was a bit on the light side. The Commerce Department said personal income rose 0.4% in March, up from 0.3% the prior month and ahead of analysts’ estimates of a 0.3% increase. Consumer spending rose 0.3% for the month, well below the 0.9% uptick seen in February. The headline consumer price inflation rate eased a bit in March, with prices rising 0.2% compared to 0.3% the previous month. Year over year, the rate of increase in prices eased to 2.1% from 2.3% the prior month. The Chicago Institute for Supply Management index fell to 56.2 in April from 62.2 in March, which was below the 60.8 figure analysts had been projecting, although index values above 50 indicate growth.
European stocks were lower Monday after Spain reported that it met the technical definition of a recession, the second major European nation to do so in the past week. The Spanish statistics institute INE said the country’s GDP declined 0.3% in the first quarter after falling 0.3% in the previous quarter. Last week the U.K. said its GDP also fell for two consecutive quarters, indicating recession. The IBEX 35 index of major Spanish stocks fell 2% in response to today’s news (although it was hardly a surprise), while French stocks lost 1.6% and Italian equities fell 1.3%. German stocks lost about half as much, falling 0.6%, while the broader-based Stoxx Europe 600 fell 0.7%. There was some flight to quality in Europe on Monday, as investors bid up the price of the German 30-year bund by about ¾ of a point to yield 2.36%, while the 10-year note rose about 1/3 of a point to yield 1.66%. The euro was down slightly on the day.
Reports/dates/facts/links worth paying attention to over the next week:
- May 1: Construction spending for March; motor vehicle sales for April; ISM manufacturing composite index for April.
- May 2: ADP national employment report for April; factory orders for March.
- May 3: Unemployment claims; productivity for Q1; ISM non-manufacturing survey for April.
- May 4: Employment situation for April.
Copyright © 2012 by Wright Investors’ Service, Inc. The views expressed in this blog reflect those of Wright Investors’ Service, Inc. and are subject to change. Statements and opinions therein are based on sources of information believed to be accurate and reliable, but Wright Investors’ Service, Inc. makes no representations or guarantees as to the accuracy or completeness thereof. These views should not be relied upon as investment advice.