Market Movement in April 28 and 29 By Jeffrey Arsenault of Old Greenwich, CT

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Monday saw the market’s performance wobble but it did manage to pull itself together and end on a mostly good note that day despite traders being pulled in several directions. According to the April 28, 2014 article “Shares Rally Late Despite a Tech Slump” by The Associated Press in The New York Times, “[s]tocks rallied at the opening, fell in the afternoon, then mostly rose again in the last hour of trading.”

The Dow Jones industrial average increased by 87.28 points, or 0.5 percent, to 16,448.74. The Standard and Poor’s 500-stock index rose 6.03 points, or 0.3 percent, to close at 1,869.43 while the Nasdaq fell 1.16 points, or 0.03 percent, to 4,074.40. “Although the index [Nasdaq] erased most of a 61-point loss earlier in the afternoon,” noted the Associated Press. “In the bond market, interest rates moved higher. The yield on the 10-year Treasury note rose to 2.71 percent, from 2.67 percent late Friday, while its price declined 12/32, to 100 12/32.”

A financial error that would force Bank of America to cancel its stock buyback plan and dividend increase caused its stocks to fall. “Bank of America sank $1, or 6.3 percent, to $14.95 after it unexpectedly announced it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to delay its buyback and dividend increase until the error was fixed,” reported the Associated Press. Both Citigroup and Goldman and Sachs fell 1 percent after Bank of America’s announcement.

Pfizer’s renewal of its pursuit of a merger with AstraZeneca, pushing to acquire the British company for $100 billion, caused health care stocks to rise. The “deal, if it happens, would be the latest big merger in the drug industry in recent weeks. AstraZeneca shares rose $8.35, or 12 percent, to $77.01. Pfizer shares rose $1.29, or 4.2 percent, to $32.04,” reported the Associated Press.

Former star performers, technology stocks, fell once more, pulling the Nasdaq composite index down into the red. According to The Associated Press, “investors continued to cut their exposure to high-growth names and turned their focus to larger dividend-paying companies. Amazon fell $7.25, or 2.4 percent, to $296.58 after plunging nearly 10 percent on Friday after reporting its financials. Netflix lost $7.87, or 2.4 percent, to $314.21 and Facebook fell $1.57, or 2.7 percent, to $56.14.” Meanwhile, the veteran technology companies which have been tried and tested and pay quarterly dividends, such as Microsoft, Apple, and I.B.M., rose by almost 2 percent or more on Monday. “High-growth technology and biotechnology stocks have been falling for several weeks now. The Nasdaq is down 3 percent so far in April, while the S.&P. 500 and Dow are roughly flat.”

Tuesday brought better news as “solid earnings from a broad range of companies pushed the stock market higher,” reported the Associated Press in The New York Times. They quoted Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, who said: “Corporate earnings are pretty good…Once the market got back on its feet after that dip that we had, it seems to be poised to hit a new record high very soon.”

A little over half the companies in the Standard & Poor’s 500-stock index have released their first quarter earnings and, for the most part, the reports have borne enough good news to drive stock prices higher. The Standard & Poor’s 500-stock index has rose 2.6 percent since April 14, and is, according to the New York Times, “approaching its nominal all-time high after a pullback at the start of April prompted by a sell-off in high-flying Internet and biotech stocks.”

The Dow Jones industrial average rose 86.63 points, or 0.5 percent, to 16,535.37; the Nasdaq composite index increased 29.14 points, or 0.7 percent, to 4,103.54; and the S.&P. 500 rose 8.90 points, or 0.5 percent, to 1,878.33. The index is only 12 points away from its record high set on April 2. In the bond market, the yield on the Treasury’s 10-year note fell to 2.70 percent, from 2.71 percent late Monday, while its price rose 3/32, to 100 15/32.

Ameriprise Financial, a wealth management company, experienced a surge in its stocks after posting earnings that exceeded Wall Street’s expectations. Ameriprise increased by 5.8 percent or $6.04, to $109.55. Financial stocks rose almost 1 percent, the most of any of the 10 sectors that make up the Standard and Poor’s 500-stock index. Cummins, a maker of large diesel engines, is another example, experiencing a jump after the company said a surge in North American sales increased its earnings. It rose by $5.61, or 3.9 percent, to $150.81. MGM Resorts International is another stock on the move, rising 8.5 percent or $1.96 to reach $24.98 after its first-quarter earnings soared. According to the Associated Press, it was “bolstered by continued strength in Macau and improved bookings on the Las Vegas Strip.”

Sprint and Consol Energy both also experienced gains. “Sprint, the third-largest wireless carrier in the United States, gained 84 cents, or 11.3 percent, to $8.27 after the company posted a loss that was smaller than Wall Street analysts’ had expected,” noted the Associated Press. “Consol Energy rose $1.98, or 4.7 percent, to $43.93 after it posted quarterly earnings of $116 million compared with a year-ago loss.”

Jeffrey Arsenault, Principal and Founder, Old Greenwich Capital Partners, LLC.

Mr. Arsenault brings more than 25 years of investment experience to the Old Greenwich Capital partnership. Prior to launching Old Greenwich Capital Partners (OGCP) in 2005, he was a partner at Paradigm Capital, Inc., a Canadian investment boutique, where he successfully launched and established a U.S. presence for the firm.

Mr. Arsenault began his career in institutional sales at Gordon Capital, where he worked for five years prior to moving to CIBC World Markets. After a successful run at CIBC World Markets, Jeffrey became Director of Institutional Sales at Merrill Lynch.

Through his professional career, Mr. Arsenault has established a close network of associations throughout the investment community allowing him to identify and access valuable information. For many years, Mr. Arsenault has researched the needs of investors and managers and as a result developed a technical investment management framework that allows him to source, analyze, monitor, and assess the best breed of mangers in the industry, and to deliver positive alpha returns to Old Greenwich Capital Partners’ clients.

Jeffrey graduated from Boston University in 1985 with a Bachelor of Science in Business Administration while being part of the university men’s soccer team. To this day, Jeffrey remains highly involved in Boston University’s Athletic Directors Council and Boston University’s Metropolitan Dean Advisory as a board member. Furthermore, he also serves as a board member of the Stepping Stones Museum for Children and Sound Point Capital and finds the time to manage a family of five children along with his lovely wife.

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