Stock Market News for August 18, 2011

On Wednesday, The Dow Jones Industrial Average see-sawed between positive and negative territory, eventually closing flat as did the S&P. The Nasdaq closed in the red after tech shares dragged the index lower following Dell’s revised sales forecast. However, a few positive earnings results from retail stocks and a couple of economic reports helped the markets ward of another slide in the middle day of the week.

The Dow ended with a small gain of 4.28 points to close at 11,410.21, gaining 4.28%. During the day, the blue chip index managed to touch an intraday high of 124 points and an intraday low of 84 points. The Standard & Poor 500 (S&P 500) increased marginally, by 1.12 points to settle at 1,193.88. Helping the S&P to close in the green was Sprint Nextel Corp (NYSE:S). Shares of the company gained 3.6%, making it the leading component of the index. Of all the sectors in the index, the telecom sector witnessed the highest gains and the tech lagged the most. The tech-laden Nasdaq Composite Index shed 0.47% and closed the day at 2,511.48.

The fear-gauge CBOE Volatility Index (VIX) ended below 32. However, the fear-gauge is still above the technical level of 30, which is considered to reflect a high degree of fear in the market. It was also one of the busiest days in over a year as consolidated volumes reached 15.9 billion shares, twice as much as the average volume on the New York Stock Exchange, Amex and Nasdaq. On the NYSE, 937 million shares were traded and for every three stocks that advanced, only two stocks fell. The Dow kept moving to and fro between positive and negative territory. After the initial jump, the blue-chip index plunged, then the index recovered its losses and eventually closed flat. Leading the gains was American Express Co. (NYSE:AXP) whose share prices were up by 2.2% and Hewlett-Packard Co (NYSE:HPQ) which declined by 3.7% makeing it the leading declining stock of the index.

Coming to earnings reports, share prices of retailer Target Corporation (NYSE:TGT) gained momentum during the day’s trade after the discount retailer reported its second quarter earnings results. The company posted EPS of $1.03 which came in above analysts’ expectations of $0.97 per share while sales came in at $15.9 billion. The company also provided an optimistic outlook for the year ahead. Staples, Inc. (NASDAQ:SPLS) reported its earnings figure for the second quarter which came in at $0.22 per share. The office supplier’s witnessed an increase of 5.2% in its sales volume quarter over quarter to touch $5.82 million. Shares of Abercrombie & Fitch (NYSE:ANF) slid 8.66%, to $64.87 although the retail chain reported a 64% boost in its second-quarter income, which topped the Street expectations. Chico's FAS Inc., (NYSE:CHS) which also reported its second-quarter earnings that beat Street's expectations, saw its share prices falling 2.46 %, to close at $12.30.

Computer manufacturers Dell’s (NASDAQ:DELL) share prices dropped 10.13% marking the steepest fall in the shares of the company since October 2008. The PC maker said declining demand of its products will significantly affect sales. The company lowered its revenue growth outlook to 1.5% from 5.9%. Share prices of other tech companies also witnessed a steep fall. Hewlett-Packard’s (NYSE:HPQ) shares fell 3.74% after investors showed negative sentiments towards the stock. NetApp Inc (NASDAQ:NTAP) and JDS Uniphase’s (NASDAQ:JDSU) shares lost 14.5% and 3.2% after both the companies posted weak earnings results.

On the economic front, the U.S.Bureau of Labor Statistics reported that The Producer Price Index for finished goods rose 0.4% in July after a 0.4% decrease in June, making it the biggest percentage gain since January. Moving on to crude oil inventories, for the week ending August 12, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.2 million barrels from the previous week. At 354.0 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Investors now await data on the Consumer Price Index which is slated to increase 0.3% in July.

Moving on to individual stocks, shares of Kinetic Concepts, Inc. (NYSE:KCI) fell 1.22% after a report from Bloomberg said that Bain Capital has called off talks with Alvista Capital Partners involving a bid for Kinetic Concepts. Southern Union’s (NYSE:SUG) shares rose 2.45% after Williams (NYSE:WMB) announced the oil and gas company is still interested in purchasing Southern Union for $44 per share. Online brokerage firm E*Trade Financial (NASDAQ:ETFC) said it closed the month with 2.8 million brokerage accounts which includes 24,110 gross new brokerage accounts and 916 net new brokerage accounts during the month. The energy sector also gained after a government report said crude stocks gained last week against expectations for a drop. Share prices of ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) rose 0.9% and 0.33% respectively.

ABERCROMBIE (ANF): Free Stock Analysis Report

AMER EXPRESS CO (AXP): Free Stock Analysis Report

CHICOS FAS INC (CHS): Free Stock Analysis Report

E TRADE FINL CP (ETFC): Free Stock Analysis Report

HEWLETT PACKARD (HPQ): Free Stock Analysis Report

JDS UNIPHASE CP (JDSU): Free Stock Analysis Report

KINETIC CONCPTS (KCI): Free Stock Analysis Report

SPRINT NEXTEL (S): Free Stock Analysis Report

STAPLES INC (SPLS): Free Stock Analysis Report

SOUTHN UNION CO (SUG): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

WILLIAMS COS (WMB): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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