Stock Market News

Stock Market News for May 18, 2012 - Market News
Fri, 18 May 2012

The Dow and S&P 500 extended their losses into a fifth-straight day and the Nasdaq also took a hammering, as discouraging domestic economic data added to the woes of lingering Greek concerns. The mid-Atlantic region witnessed its first drop in manufacturing activity in eight months and the outlook for US economic growth showed a declining trend for the first time in six months. With these concerns sinking the benchmarks, the Dow suffered its 11th decline in the past 12 sessions and ended at its lowest level since January this year.

The Dow Jones Industrial Average (DJI) dropped 1.2% and ended significantly lower at 12,442.49. The Standard & Poor 500 (S&P 500) slumped 1.5% to finish yesterday’s trading session at 1,304.86. The tech-laden Nasdaq Composite Index crashed 2.1% and closed at 2,813.69. The fear-gauge CBOE Volatility Index (VIX) shot up almost 10% to settle at 24.49. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 8.35 billion shares, sharply higher than the daily average of 6.81 billion. Decliners drubbed the advancing stocks on the NYSE; as for 84% of the decliners, only 13% stocks could move higher. The remaining stocks were left unchanged.

European political uncertainty has taken a toll on global as well as US benchmarks. France has a new government in place and Greece is yet to finalize on one. Germany’s Angela Merkel too has lost a poll recently, which she termed as a "bitter, painful defeat”. All through this week Greek concerns have dampened sentiment overshadowing positives such as encouraging economic readings.

The concerns which have dominated the week are clearly reflected in the performance of benchmarks. So far this week, the Dow, S&P 500 and Nasdaq are down 3.0%, 3.6%, and 4.1%, respectively. Additionally, this was the second near 10% jump for the VIX this week. On Monday, the VIX had jumped precisely 9.95% and has followed it up with an uptrend since then. Yesterday it jumped 9.97% and subsequently the VIX hit its highest level since late December last year.

Amidst ongoing Greek concerns, economic readings have been the only saving grace, though they have failed to rescue markets from their consistent slump. However, yesterday even economic readings were a big disappointment and that ensured a heavy fall for the benchmarks. The Philadelphia Federal Reserve's business conditions index showed a declining trend and was at its lowest level since September last year. The Business Outlook Survey for the month of May noted: The survey’s broad indicators for general activity fell into negative territory for the first time in eight months. Indicators for new orders and employment also suggested slight declines from April”. According to the report, the ‘measure of manufacturing conditions, the diffusion index of current activity,’ was down to ‐5.8 in May from a positive 8.5 in April. This was also contrary to consensus estimates of a reading of 9.4.

Separately, The Conference Board Leading Economic Index contracted 0.1% last month to 95.5. This was the first decline in six months. In March it had rose 0.3% and had registered a 0.7% increase in February. The 0.1% fall was in absolute contrast to the 0.1% uptrend predicted by consensus estimates. Ken Goldstein, economist at The Conference Board, said “The indicators reflect an economy that’s still struggling to gain momentum. Growth is slow, but choppy, and consumers, executives and investors are looking for more progress”.

Meanwhile, first-time claims for unemployment benefits remained unchanged over last week. The U.S. Department of Labor reported: “In the week ending May 12, the advance figure for seasonally adjusted initial claims was 370,000, unchanged from the previous week's revised figure of 370,000”. Consensus estimates had expected initial claims to be around 367, 000.

As for the sectors, the Technology Select Sector SPDR (XLK) slumped 1.5%. Among the tech stocks, Apple Inc. (NASDAQ:AAPL), SanDisk Corporation (NASDAQ:SNDK), Seagate Technology PLC (NASDAQ:STX), Google Inc (NASDAQ:GOOG), Yahoo! Inc. (NASDAQ:YHOO), and Oracle Corporation (NASDAQ:ORCL) plunged 2.9%, 3.3%, 5.2%, 0.9%, 2.7% and 1.8%, respectively.

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Stock Market News for May 17, 2012 - Market News
Thu, 17 May 2012

The US benchmarks fell once again due to the same-old concerns regarding the increasing likelihood of Greece exiting the euro. Markets enjoyed an early morning rally after economic readings were quiet encouraging. However, in the face of the Greek turmoil, which even looks to threaten the world economy, the gains had to ultimately give way to losses.

The Dow Jones Industrial Average (DJI) dropped 0.3% and closed at 12,598.55. The Standard & Poor 500 (S&P 500) lost 0.4% to finish yesterday’s trading session at 1,324.80. The tech-laden Nasdaq Composite Index slumped 0.7% and was down to 2,874.04. The fear-gauge CBOE Volatility Index (VIX) edged up 1.4% to settle at 22.27. Consolidated volumes on the New York Stock Exchange, Nasdaq and American Stock Exchange were roughly 7.59 billion shares, higher than the daily average of 6.79 billion. Decliners easily outpaced advancing stocks on the NYSE; as for 66% stocks that declined, 31% stocks were on the positive side. The remaining 3% stocks were left unchanged.

The Dow, like its fellow benchmarks, has been battered heavily all through this month. On the first day of the month the blue-chip index had hit a four-year high. However since then, the index has hardly provided any reason to the investors to cheer about. The blue-chip index has notched up just one gain since May 1st and has now lost 4.7%. In the light of the present scenario, the index looks poised to post a monthly loss and it is trading down 4.4% this month. If the Dow does not recoup all of those monthly losses, this would be the Dow’s first monthly decline since September last year.

Even yesterday, things were no different for the Dow. Investors’ sentiment had turned for the good early yesterday and the Dow was up almost 91 points. However, with Greek concerns once again overshadowing positive catalysts, it had to suffer its fourth-straight decline. Moreover, with Wednesday’s decline, the Dow has finished 10 times in the red out of the last 11 trading sessions.

As mentioned earlier, the day had started on an upbeat note buoyed by positive economic readings and indications provided by the minutes of the Federal Open Market Committee’s meeting. The Fed minutes boosted sentiment, as it once again raised hopes of the further monetary policy measures. The Fed minutes noted that ‘several’ members opined that monetary easing would be a requirement if economic momentum declines.

Separately, the U.S. Department of Housing and Urban Development reported that privately-owned housing starts in April jumped 2.6% to a seasonally adjusted annual rate of 717,000 from March’s revised estimates. This was also ahead of the consensus estimates of housing starts reaching 683, 000. However, privately-owned housing units authorized by building permits in April dropped 7.0% from March to a seasonally adjusted annual rate of 715,000.

Separately, the Board of Governors of the Federal Reserve System reported a 1.1% increase in industrial production in April. This came in well ahead of consensus estimates of an increase of 0.6%. The report further noted: “Manufacturing output increased 0.6 percent in April after having decreased 0.5 percent in March. Excluding motor vehicles and parts, which increased nearly 4 percent, manufacturing output moved up 0.3 percent, and output for all but a few major industries increased. Production at mines rose 1.6 percent, and the output of utilities gained 4.5 percent after unseasonably warm weather in the first quarter held down demand for heating”.

Despite these positives, markets were in the red once again thanks to the Greek crisis. The nation has decided to go back to polling once again on June 17. This would be the nation’s second vote in quick succession as Greece has failed to form a government. With no government in place, there is obviously no one at the helm of affairs at the moment to negotiate for the next bailout package. Political uncertainty has increasingly intensified and has increased chances of Greece exiting the euro. Thus, with heightened fears regarding Greece, which is even a threat to global markets, the US benchmarks had to undergo another set of declines.

Coming to sector-wise performances, financials and materials had a bad day. The Financial Select Sector SPDR (XLF) and the Materials Select Sector SPDR (XLB) declined 1.5% and 1.1%, respectively. Financial bellwethers including Bank of America Corporation (NYSE:BAC), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), The Goldman Sachs Group, Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) slumped 2.6%, 3.1%, 2.2%, 1.7% and 4.2%, respectively. Among material stocks, E I Du Pont De Nemours And Co (NYSE:DD), Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Southern Copper Corp (NYSE:SCCO) and HudBay Minerals Inc (NYSE:HBM) dropped 0.6%, 0.3%, 0.7% and 2.4%, respectively.

Stock Market News for May 16, 2012 - Market News
Wed, 16 May 2012

Investors had to stomach the benchmarks’ eighth fall in ten days yesterday, as lingering political uncertainty in Europe intensified its negative impact on the financial arena. The Dow closed at a four-month low and the S&P 500 recorded its third-consecutive day of losses. Investors were so focused on these concerns that they completely negated positive economic readings.

The Dow Jones Industrial Average (DJI) slumped 0.5% to finish at 12,632.00. The Standard & Poor 500 (S&P 500) closed yesterday’s trading session 0.6% lower at 1,330.66. The tech-laden Nasdaq Composite Index lost 0.3% and ended at 2,893.76. The fear-gauge CBOE Volatility Index (VIX) moved up 0.5% and settled at 21.97. This was the VIX’ third-straight day of gains and it has gained 15.3% over the past five trading sessions. Consolidated volumes on the New York Stock Exchange, Nasdaq and American Stock Exchange were 7.28 billion shares, considerably higher than the daily average of 6.78 billion shares. Decliners had a better day than advancing stocks on the NYSE; as for two stocks that moved down, only one stock that could manage a finish in the green. The S&P 500 has lost over 6% from the highs it achieved in April and the Dow has declined by 647 points or almost 5% from its four-year high of 13,279, achieved on May 1.

Market watchers believed that the day might be a favorable one given the positive economic numbers. At the beginning of the session, investors were also hoping for the same and benchmarks were trading higher. However, by the end of the day things had taken a turn for the worse. European political uncertainty once again dented the markets. Before getting on with the news from across the Atlantic, let us have a look at the few readings that raised investors’ hopes.

On the domestic front, the Federal Reserve Bank of New York’s monthly survey of manufacturers in New York State noted manufacturing activity in the state had expanded at a ‘moderate pace’ in May. The report stated that the general business conditions index was up eleven points to 17.1, new orders index moved up to 8.3, and the shipments index was at 24.1 after jumping eighteen points. The general business conditions index settled at a significantly higher 9.3, matching consensus estimates.

Separately, the retail sales report from the U.S. Department of Commerce was also a positive. According to the report: “Advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $408.0 billion, an increase of 0.1 percent (±0.5%)* from the previous month and 6.4 percent (±0.7%) above April 2011”. The 0.1% increase matched the consensus estimates.

Further, the Consumer Price Index for All Urban Consumers (CPI-U) released by the U.S. Bureau of Labor Statistics remained flat in April. The index for all items minus food and energy was up 0.2% in April, in line with the 0.2% rise in March. This was also in line with the consensus estimates.

Economic data from Europe was also encouraging. Investors were happy to learn that the Euro-zone had narrowly avoided a recession. Contrary to fears of a contraction, Eurostat confirmed that in the first quarter Euro-zone recorded ‘zero GDP growth’. Zero growth is never great news. However it is a positive when an economy avoids back-to-back quarters of contraction. The euro-zone needs to thank Germany for helping it avoid a contraction, as Germany posted 0.5% growth in its GDP. On the other hand, while France too had zero GDP growth, Italy, Spain and Portugal contracted 0.8%, 0.3% and 0.1%, respectively.

However, none of the positives were any good in face of the deepening political uncertainty in Greece. The nation has struggled for long to form a government and with every passing day the possibility of exiting the euro is becoming stronger. Political uncertainty in the region has become a near daily affair for the markets. The latest development on this front is that Greek president Karolos Papoulias has urged the nation to go back to polling yet again. With no clear majority currently, the nation failed to put a new government in place, a government that would have negotiated for the next bailout. The euro was down to a four-year low and with no definite solution in sight, investors’ sentiment was hampered.

Moving on to the sectors, the financials once again bore the brunt and the Financial Select Sector SPDR (XLF) was down 0.5%. Financial bellwethers including American Express Company (NYSE:AXP), Bank of America Corporation (NYSE:BAC), Citigroup, Inc. (NYSE:C), Morgan Stanley (NYSE:MS) and Wells Fargo & Company (NYSE:WFC) lost 0.8%, 0.7%, 1.2%, 1.1% and 0.5%, respectively.

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Stock Market News for May 15, 2012 - Market News
Tue, 15 May 2012

Markets suffered a heavy fall yesterday as political uncertainty in Europe continued and China’s economic health looked gloomier than previously perceived. Financial bellwether JPMorgan’s disclosure that it had suffered a $2 billion trading loss remained an overhang on the markets and dragged down financials once again. As the benchmarks finished in the red, S&P 500 recorded its lowest level since February.

The Dow Jones Industrial Average (DJI) inched down 1% to close at 12,695.35. The Standard & Poor 500 (S&P 500) lost 1.1% and finished yesterday’s trading session at 1,338.35. The tech-laden Nasdaq Composite Index slumped 1.1% and ended at 2,902.58. The fear-gauge CBOE Volatility Index (VIX) jumped almost 10% to settle significantly higher at 21.87. Consolidated volumes on the New York Stock Exchange, Nasdaq, and the American Stock Exchange were roughly 6.6 billion shares, lower than the daily average of 6.78 billion shares. Declining stocks hammered the advancing ones on the NYSE; as for every five stocks that ended lower, only one stock could move higher.

Benchmarks had raised high hopes earlier this year, when they started with a bang. Aside from a few low days, benchmarks sprung to individual key levels and sustained those levels for a while. However, over the past couple of weeks benchmarks have been vulnerable to European concerns arising out of political uncertainty and rising borrowing costs. They have also been dented by a mixed bag of domestic economic data as well as by dismal data from Europe and China. It hasn’t been smooth sailing, which is highlighted by the fact that the Dow has closed in the red on eight occasions out of the last nine trading days and the S&P 500 recorded its fourth decline out of five sessions. Moreover, the benchmarks are almost near their three-month lows and last week the Dow posted its worst weekly performance for the year.

Things were no different yesterday as European concerns continued to hamper domestic sentiment. Greece is still struggling to form a government. On Monday, President Karolos Papoulias called four party leaders for talks, but optimism arising out of this development soon vanished after the SYRIZA party denied attending the meeting, which was followed by another leftist leader walking out. With the nation still grappling to form a government and signs strongly suggesting that things are getting tougher, Greece may soon default on its debt and eventually exit the euro. The nation needs a government to secure the bailout and avoid this scenario. Following yesterday’s developments, Greece, Italy and Spain witnessed another rise in their borrowing costs.

Additionally, German chancellor Angela Merkel seemed to be in a tough spot, after centre left Social Democrats defeated her Christian Democrat party in a poll by a huge margin. This yet again reflects the public’s attitude to austerity measures. Merkel termed it as a "bitter, painful defeat”, but she said that she will still stick to the austerity plans.

Meanwhile, China’s has decided to reduce the amount of cash that the country’s banks must retain. The decision was described ad ‘pro-growth’ and was aimed at easing the monetary situation. However, with most of the data coming in over the last few days being of a disappointing nature, investors’ faith in the second-largest economy has reduced and the possibility of a softening economy weighed on the markets.

Shifting to the domestic front, an earlier disclosure by JPMorgan Chase & Co. (NYSE:JPM) about suffering a loss of $2 billion continued to hamper he sentiments. In latest developments, Ina Drew resigned as the chief investment officer, thus becoming the first among the top executives to vacate office after the incident.

Shares of JPMorgan slumped 3.2% and the stock emerged as the biggest loser among the 30 Dow components. Other financial stocks in the Dow, American Express Company (NYSE:AXP) and Bank of America Corporation (NYSE:BAC) suffered losses of 2.1% and 2.7%, respectively. Financials had a bad day and the Financial Select Sector SPDR (XLF) slipped as much as 2.1%. Shares including Citigroup, Inc. (NYSE:C), Morgan Stanley (NYSE:MS), The Goldman Sachs Group, Inc. (NYSE:GS) and Wells Fargo & Company (NYSE:WFC) lost 4.1%, 4.4%, 2.3% and 2.7%, respectively.

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Stock Market News for May 14, 2012 - Market News
Mon, 14 May 2012

Markets experienced another gloomy day on Friday as JPMorgan Chase disclosed it had suffered a $2 billion trading loss in a span of only six weeks. The financials bore the brunt and dragged the benchmarks along, also ensuring weekly losses for them. Separately, a couple of good economic reports could hardly make any impact against the strong headwinds of the day.

The Dow Jones Industrial Average (DJI) closed 0.3% lower at 12,820.60. The Standard & Poor 500 (S&P 500) also dropped 0.3% to end Friday’s trading session at 1,353.39. The tech-laden Nasdaq Composite Index was helped by some good news from the tech sector, and it moved up 0.01% to end at 2,933.82. The fear-gauge CBOE Volatility Index (VIX) gained 5.6% and settled at 19.89. The advancers were outshined by the declining stocks on the New York Stock Exchange; as for 39% of advancers, 58% stocks moved down. The remaining 3% stocks were left unchanged. Total volumes on the NYSE were at 3.87 billion shares.

Late Thursday financial bellwether JPMorgan Chase & Co. (NYSE:JPM) disclosed that the bank has suffered pre-tax trading losses worth $2 billion. This loss was due to synthetic credit positions or the over-the-counter derivatives, which however was offset by credit-related position sales of $1 billion. Nonetheless, the company suffered a humongous loss and stated that it expects to incur an after-tax loss of $800 million in the corporate segment during the next quarter.

Following this development, investors were wary of the stock on Friday and it received a heavy battering. JPMorgan’ stocks plunged 9.3% on Friday. The broader financial sector was also not spared and the Financial Select Sector SPDR (XLF) and the KBW Bank Index (BKX) suffering a downtrend of 1.1% and 1.2%, respectively. Among other financial stocks, Citigroup, Inc. (NYSE:C), The Goldman Sachs Group, Inc. (NYSE:GS), Morgan Stanley (NYSE:MS), and Barclays PLC (NYSE:BCS) plunged 4.2%, 3.9%, 4.2% and 4.3%, respectively.

Coming to technology stocks, some good news helped the Technology Select Sector SPDR (XLK) chalk up gains of 0.1%. Intel Corporation (NASDAQ:INTC) came out with an announcement that it is well en route to meet its sales expectations. This gave a huge boost to investors in the tech sphere. Intel shares rose 1.4%, joined by Microsoft Corporation (NASDAQ:MSFT) that also gained 1.4%. NVIDIA Corporation (NASDAQ:NVDA) also lent significant support to the technology arena, as its shares jumped 6.4% after it topped revenue estimates. Other stocks like SanDisk Corp. (NASDAQ:SNDK), Broadcom Corp. (NASDAQ:BRCM) and Marvell Technology Group Ltd. (NASDAQ:MRVL) gained 0.3%, 1.3% and 1.8%, respectively.

Economic data too was on the positive side, but not strong enough to prevent the markets from closing in the red. The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for finished goods eased 0.2% in April, and this fall was in line with consensus estimates. This was the first decline since December last year and the biggest since 0.3% fall in October. Starting January, the PPI index had trended higher with January and February registering gains of 0.2% and 0.45, respectively. The index remained flat in March. Separately, The Thomson Reuters/University of Michigan consumer sentiment’s preliminary index moved up from 76.4 to 77.8, the highest level since January 2008.

However, these reports did the markets little good. Technology shares helped Nasdaq end in the green with negligible gains. However, the Nasdaq had to join the other benchmarks in negative territory for the week. The changing political scenario in Europe had left investors wondering worried about the region’s fiscal health, dragging down US benchmarks. Greece continued to struggle to form a government increasing its chances of exiting the euro. Eventually, the benchmarks had a rough run through the week. In what was one of the Dow’s worst weekly performances this year, it ended 1.7% lower, while the S&P 500 and the Nasdaq dropped 1.2% and 0.8%.