Microsoft Rises on Upgrade
In premarket trade on Thursday, the shares of Microsoft Corp. (MSFT, +0.07%) increased by 1.1 percent. This came after the software giant was upgraded by Stifel Nicolaus. According to analyst Brad Reback, as a result of an increase in confidence in Microsoft’s commercial business as well as the belief that Microsoft’s consumer and devices businesses will become more profitable; the rating for Microsoft was raised from hold to buy. Interesting, Stifel Nicolaus has maintained Microsoft at a hold rating for the last 2 years. In addition, Reback also set a price target on Microsoft’s stock at $55. This is 18 percent above the closing price on Wednesday of $46.74 a share. In addition, Reback also stated in a note to clients that since the “Nokia fire is largely contained", Microsoft is likely to raise its dividend by about 15% in fiscal years 2016 and 2017. Last month, Microsoft announced that it was taking a $7.6 billion charge to write down assets associated with its purchase of the handset business of Nokia Corp. (NOK, +0.23%). Since Wednesday, year to date, the stock of Microsoft has increased 0.6% and in comparison, over the same period, the Dow Jones Industrial Average (DJIA) has declined 2.4 percent.
Stocks traded higher on Thursday in U.S. trading. This came in response to positive reports on jobless claims and retails sales which suggested that the economy in the U.S. is improving. During the trading session, the Dow Jones Industrial Average (DJIA) was down 51 points but by the close of trading, the blue chip index rose 0.4%, or 61 points, to 17,463. Also on the upside was the Nasdaq Composite Index (COMP) which gained 0.4%, or 21 points, to 5,065. This tech heavy index was also lower earlier in the session. Meanwhile, the S&P 500 index (SPX) advanced 0.2%, or 5 points, to 2,091. These gains were led by the consumer discretionary sector which gained 1.1% while the financial sector also gained 0.5 percent. The poorest performer was the energy sector which dropped 1.2% as oil prices declined.
On Thursday, the U.S. dollar gained as a result of positive U.S. economic reports which boosted investor sentiment regarding the strength of the economy as well as a possible rate hike by the Federal Reserve in September. According to the U.S. Department of Labor, the number of people who filed for initial jobless benefits in the week ending on the 8th of August, increased to 274,000, up by 5,000. Also, the U.S. Commerce Department reported that retail sales increased in July by 0.6%. The EUR/USD traded at 1.1116, down 0.37% while the USD/JPY traded at 124.44, up 0.20%. Against the currencies in Britain and Australia, the U.S. dollar traded higher with GBP/USD down 0.17% at 1.5587 and with AUD/USD down 0.58% and trading at 0.7335. Also, the U.S. dollar index was at 96.61, up 0.34%.
Crude oil prices traded lower on Friday as investors have now shifted their attention to the data on the U.S. rig count expected out today. Last week, Baker Hughes, the industry research group, reported that the number of rigs drilling for oil in the U.S. was at 670, up by 6. This marked the 3rd straight weekly gain. WTI crude oil for delivery in September traded at $42.08 a barrel, down 0.36%, on the NYMEX. Meanwhile, Brent crude oil for September delivery traded at $49.59 a barrel, down 1.18%, or $0.59, on the Intercontinental Exchange (ICE) in London. The spread between the U.S and the international benchmarks of crude stood at $7.36.