Another Record High for S&P 500, U.S. Growth Estimate Lowered to 2.4%

Nichole Harper
28 Feb, 2014
New York City

U.S. indexes scaled to fresh highs after the consumer confidence index improved. U.S. lowered its economic growth estimate in the fourth quarter to 2.4%. Monster Beverage reported better than expected sales. Citigroup lowered 2013 earnings on fraud in Mexico.

[R]1:30 PM New York – U.S. indexes scaled to fresh highs after the consumer confidence index improved. U.S. lowered its economic growth estimate in the fourth quarter to 2.4%. Monster Beverage reported better than expected sales. Citigroup lowered 2013 earnings on fraud in Mexico.[/R]

Market indexes in Wall Street advanced after the release of consumer confidence index and revised economic growth data.

The indexes are on track to close higher for the week, month and the year so far and the S&P 500 index is trading a fresh record.

S&P 500 index increased 0.7% or 12.55 to 1,866.85 and the Nasdaq Composite Index added 0.4% or 15.77 to 4,334.76.

The Thomson Reuters/University of Michigan index of consumer sentiment in February was revised higher to 81.6 from 81.2 in February.

Q4 Economic Growth Revised Lower to 2.4%

The economic growth was revised lower for the fourth quarter on the weakness in retail sales and inventory adjustments and weaker than expected international trade.

The Commerce Department reported in its second estimate of December quarter economic growth at 2.4%, down from the initial estimate of 3.2% released of Jan 30. The third and final estimate of the economic growth is scheduled to release in March.

The revised economic growth is substantially slower than the third quarter growth estimate of 4.1%.

The growth was affected in the fourth quarter on the sharp fall in federal government spending.

The partial government shutdown also affected the economic activities and the 14% decline in military spending after the automatic budget cuts imposed by the Congress also weighed on the growth across the economy.

Europe Markets

In London trading, FTSE 100 index gained 0.3% or 18.17 to 6,828.44 and in Frankfurt the DAX index jumped 0.9% or 85.28 to 9,673.61.

In Paris, CAC 40 index increased 0.3% or 12.03 to 4,408.42.

U.S. Stocks in Review

Citigroup Inc ((C)) increased 32 cents to $49.01 and the bank said it will lower its 2013 earnings to $13.9 billion from $13.7 billion because the company discovered fraud at a unit in Mexico.

Jos. A. Bank Clothiers Inc ((JOSB)) increased 3% or $1.88 to $62.18 rejected the revised offer from Men’s Wearhouse Inc and deemed the offer inadequate but held out for a higher offer.

Men’s Wearhouse, Inc ((MW)) soared 7% to $53.87.

KBR, Inc. ((KBR)) dropped 14.6% to $27.62 after the military contractor lowered its earnings outlook for 2014 to between $1.75 and $2.10.

The Middle East based company also reported fourth-quarter revenues of $1.7 billion, lower than estimate of $1.9 billion.

Monster Beverage Corp ((MNST)) soared 5.5% to $75.05 after the energy drinks and fruit juices developer and distributor reported fourth quarter sales increased 15% to $540.8 million.

Earnings rose to $76.1 million or 44 cents from $68 million or 39 cents a share.

For the full-year 2013, Monster sales increased 9% to $2.2 billion and earnings rose 4.8% to $1.95 a share.

salesforce.com, Inc ((CRM)) declined 3.6% or $2.42 to $63.80 after the cloud computing service provider stated revenue in the fourth-quarter soared 37% to $1.15 billion.

Net loss in the quarter widened $116.6 million or 19 cents a diluted share compared to $20.8 million or 4 cents.

The company forecasted revenue for the first-quarter in the range of $1.205 billion to $1.210 billion, an increase of 35% to 36% and for the year revenue between $5.25 billion and $5.30 billion, an increase of 29% to 30% from a year earlier.

Southwestern Energy Company ((SWN)) plunged 5.6% or $2.43 to $40.71 after the oil and gas explorer said net sales in the fourth-quarter ending in December soared 17% to $907 million.

Net in the quarter swung to a profit $144 million or 41 cents a diluted share compared to a loss of $356 million or $1.02.