Stock Market News for August 25, 2011 - Market News
August 25 2011 - 5:06AM
Zacks
The wild swing of the
markets finally came to a halt after a strong rally in the final
session pushed the benchmarks higher. Investor sentiment was
boosted by positive durable-goods orders and investors rushed in to
buy beaten-down financial stocks. Markets posted their
third-straight win and look likely to finally enjoy a positive week
after recording four-weeks of decline. However, investors wavered
between anticipation and caution as they await Fed Chairman’s
speech on Friday at the Jackson Hole.
The Dow Jones Industrial
Average (DJIA) moved up 1.3% to close at 11,320.71. The Standard
& poor 500 (S&P 500) gained 1.3% to settle at 1,177.60. The
tech-laden Nasdaq Composite Index climbed 0.9% and finished the day
at 2,467.69. The fear-gauge CBOE Volatility Index (VIX) hovered
near 35, and it continues to trade above the key level of 30. On
the New York Stock Exchange, the American Stock Exchange and
Nasdaq, consolidated volumes were 8.21 billion shares, versus last
year's daily average of around 8.47 billion. On the NYSE, for every
stock that declined, more than two stocks moved higher.
But for Exxon Mobil
Corporation (NYSE:XOM), which dropped 0.2%, all of the 30 Dow
components settled in the green. Bank of America Corporation
(NYSE:BAC) led the gains for the Dow after soaring 10.9%. This
bellwether’s jump comes after the stock was heavily beaten down
over the past few days and recently hit a 52-week low. Fears
emerged that the bank is in need of raising capital to cover
mortgage losses. Raymond James Financial Inc. (NYSE:RJF) maintained
its neutral rating on the stock.
Coming to financial stocks,
the financial sector itself finished in the green and the S&P
financials index (GSPF) advanced 2.8%. Among other bellwethers,
JPMorgan Chase & Co. (NYSE:JPM), The Goldman Sachs Group, Inc.
(NYSE:GS), Morgan Stanley (NYSE:MS), Wells Fargo & Company
(NYSE:WFC) and U.S. Bancorp (NYSE:USB) gained 3.0%, 3.2%, 3.6%,
2.1% and 3.4%, respectively.
Most of the domestic
economic reports released off late have highlighted the sorry state
of the economy. However, investors were more than happy after
encouraging data on durable-goods orders was released by the
Commerce Department yesterday. The US Census Bureau announced that
new orders for manufactured durable goods increased $7.7 billion or
4.0% to $201.5 billion in July. The report further stated: “This
increase, up two of the last three months, followed a 1.3 percent
June decrease. Excluding transportation, new orders increased 0.7
percent. Excluding defense, new orders increased 4.8
percent”.
Also, gold prices slipped
substantively by $104 to $1,757 an ounce, after gold had traded
over $1, 900 an ounce for the first time. Subsequently,
exchange-traded funds that track gold stocks and gold-mining stocks
declined. The drop in the gold futures for December to $1,757 an
ounce is the sharpest percentage drop since December
2008.
While the market sentiment
was boosted by durable goods data, declining gold prices and the
opportunity to buy beaten-down stocks, investors anxiously await
Federal Reserve Chairman Ben Bernanke‘s speech at the central
bank's annual conference in Jackson Hole, Wyoming on Friday.
Investors are hopeful that the bond-buying plan will provide
support to the financial markets. It was August last year when
Bernanke had actually laid the foundation for the $600 billion
bond-buying plan known as the QE2. However, a portion of market
watchers are not so hopeful and opined that Bernanke may not hint
at any asset-purchase plan on Friday.
Separately, co-founder of
Apple Inc. (NASDAQ:AAPL), Steve Jobs, announced he was stepping
down from his role as the chief executive of the tech-giant. Jobs,
aged 55, has been suffering from health issues and has survived
pancreatic cancer. While the shares of the tech-giant gained by a
mere 0.7% during the trading day, the stock slid 5.1% after the
closing bell. S&P futures lost 3.8 points and it is worth
noting that when ranked according to market capitalization, Apple
is the second-largest component in the S&P 500.
APPLE INC (AAPL): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
RAYMOND JAS FIN (RJF): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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