Stocks Catapult Over NASDAQ Shutdown On Global Manufacturing Data

Michael Teague  |

Stocks rose dramatically on Thursday investors were blindsided by an unprecedented shutdown of the NASDAQ that interrupted trading on the exchange for nearly three hours.

At 12:14 Eastern Time, and after some 20 minutes of sporadic interruptions, the NASDAQ became completely unable to distribute stock quotes and went off-line until 3:10 pm. While the causes of the “glitch” were not immediately available, the incident marked the second time this year that technical difficulties brought the exchange to a halt. The prior cessation in January was considerably shorter at about 15 minutes of interruptions and only 10 minutes of complete shut-down.

The Standard & Poor’s 500 index advanced 0.86 percent to 1,656.96 points, while the Dow was up over 66 points to finish the day at 14,963.74. The NASDAQ jumped 1.08 percent despite the three-hour ordeal, up almost 39 points to close at 3,638.71.

Economic data for the day was mostly positive, with unexpectedly good PMI figures out of China that showed the country’s economy barely nudging back into expansion mode with a reading of 50.1. Expectations were for a smaller advance with a reading of 48.2. In recent weeks, economists had been cutting their GDP forecasts for the economic powerhouse based on expectations of slower growth.

PMI numbers out of France disappointed expectations for that country to re-enter growth territory and  gave cause for concern about recent positive trends in the Eurozone that has seen the EU clamber its way out of a long recession swept away by the German manufacturing PMI that rose to 52, beating expectations by nearly one full basis-point.

State-side, the Kansas City Federal Reserve’s monthly manufacturing survey was also a bright spot, with a reading of 8 that beat both last month’s result and consensus estimates by two whole basis points. Initial jobless claims for the week ended on Aug. 17, however, rose to 336,000, about 5,000 more than the average of forecasts, and following prior week’s report that saw claims at their lowest weekly level in nearly six years.

Retail stocks have taken center-stage this week as a number of companies are publishing their quarterly income statements to close out earnings season. GameStop Corp. (GME) ended the day 9 percent higher on the S&P 500 after its earnings report showed the company beating EPS expectations as well as posting a 17 percent increase in online sales for the recently-ended period. Furthermore, the company expects to profit from the upcoming release of new gaming consoles from Sony (SNE) and Microsoft (MSFT) .

Other brick-and-mortars also finished the day up, with 4.3 percent rise for Best Buy (BBY) and home improvement retailer Lowe’s (LOW) advanced 3.5 percent.

Aluminum manufacturer Alcoa ($AA) led the Dow higher on the better manufacturing figures out of Europe and China, ending the day on an advance of 2.7 percent. Construction and farming machinery company Caterpillar Inc. (CAT) , itself deeply tied to the Chinese construction boom, gained 1.75 percent. Overall, 24 of the Dow’s 30 components ended the day in the positive, after two days this week saw all components in the negative by the closing bell.

The shutdown of the NASDAQ came as a great shock to Wall Street, but stocks were relatively unfazed and continued the ascent that had characterized activity on the index prior to the interruption. Tech stocks rose on heavy trading, as Yahoo! (YHOO) was over 3 percent higher, while Zynga (ZNGA) gained 2 percent despite recent difficulties, and semiconductor manufacturer Micron Technology (MU) closed up 1.7 percent. Microsoft gained 2.5 percent.

Otherwise, Tesla Motors (TSLA) erased Wednesday’s losses on an advance of 6.25 percent. The stock is now trading for a $157, on a staggering year-to-date advance of 336 percent. Formerly popular clothing retailer Abercrombie & Fitch (ANF)  was not so lucky, as shares tanked nearly 18 percent to a closing price of $38.53 as the company released its quarterly earnings statement showing missed expectations across the board, as well as a serious decline in the all-important same-store-sales category.

 

[Image: A ticker-tape parade on Wall Street celebrating the Apollo 11 astronauts who made the first moon-landing. Courtesy of Wikimedia Commons]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Companies

Symbol Name Price Change % Volume
TSLA Tesla Inc. 358.39 -1.29 -0.36 6,574,281 Trade
AA Alcoa Corporation 20.69 -0.57 -2.68 4,334,076 Trade
LOW Lowe's Companies Inc. 118.50 0.30 0.25 3,119,506 Trade
GME Gamestop Corporation 5.45 -0.13 -2.33 5,439,083 Trade
BBY Best Buy Co. Inc. 84.29 -0.56 -0.66 2,646,051 Trade
ZNGA Zynga Inc. 6.22 0.02 0.32 11,547,671 Trade
YHOO Yahoo! Inc. n/a n/a n/a 0 Trade
ANF Abercrombie & Fitch Company 16.76 -0.58 -3.34 2,725,556 Trade
MU Micron Technology Inc. 51.20 0.23 0.45 30,050,047 Trade
SNE Sony Corporation 67.57 0.25 0.37 1,019,420 Trade
CAT Caterpillar Inc. 145.53 -1.25 -0.85 3,311,720 Trade
MSFT Microsoft Corporation 154.53 1.29 0.84 23,850,062 Trade

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