Stock Market News for February 21, 2012 - Market News
February 21 2012 - 4:06AM
Zacks
Markets struggled for direction on
Friday with few inputs from the news desk, but the prospect of a
Greek deal next week enabled benchmarks to extend their gains to
the highest levels this year. Cross-Atlantic developments had
guided the markets on most of the days the week, while robust
economic data single-handedly boosted the markets on Thursday.
Thus, it was another week of strong gains for the benchmarks, and
the Dow was just marginally short of the 13, 000 mark.
On Friday, the Dow Jones Industrial
Average (DJI) gained 0.4% to close the day at 12,949.87. The
Standard & Poor 500 (S&P 500) edged up 0.2% to close
marginally higher at 1,361.23. The tech-laden Nasdaq Composite
Index was the only one to miss out; dropping 0.4% to close Friday’s
trading session at 2,951.78. The fear-gauge CBOE Volatility Index
(VIX) shed 7.5% and settled at 17.78. Total volume on the New York
Stock Exchange (NYSE) was 3.72 billion shares. The advancers
enjoyed an upper hand over the declining stocks, as for 56% of the
gainers, 40% of the stocks traded lower. The remaining stocks were
left unchanged.
Even as cross-Atlantic developments
and tensions had investors wondering whether benchmarks would be
able to record another week of robust gains, US economic data
stepped in to drive optimism. On Thursday, investors were greeted
with robust data from the jobs and housing sectors, both of which
play huge role in shaping the economy. The U.S. Department of Labor
reported another drop in initial claims, painting a rosy picture of
declining unemployment. Separately, according to a joint release
from the U.S. Census Bureau and the Department of Housing and Urban
Development, both building permits and housing starts reflected
encouraging trends, lifting the broader sentiment.
These developments in addition to
Friday’s gains culminated in another week of gains and the Dow,
S&P 500 and the Nasdaq were up 1.2%, 1.4% and 1.7%,
respectively. The week ending on February 10 had been
disappointing, largely due to Greek concerns. However, the week
ending February 19 came to a close on a winning note. Investors
remained largely optimistic about the Greek debt deal and it is
widely expected that the country will secure the next tranche of
its bailout package early this week.
On the economic front, consumer
prices were reported to have moved higher, buoyed by higher
gasoline prices. The U.S. Bureau of Labor Statistics reported that
Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% last
month, marking its highest rise in four months. The increase in
gasoline prices is a concern and it can also adversely affect the
economic recovery. Consensus estimates had predicted the CPI to
increase 0.3%.
Coming back to the benchmarks, the
Dow is precisely 50.13 points shy of hitting the psychological 13,
000 level. The last time the Dow had witnessed such a level was in
May 2008, a time before the recession. Breaking the 13, 000 barrier
would be a major psychological boost for investors, who will
definitely love to see the Dow move back to pre-recessionary
levels. However, during May 2008, unemployment was at 5.4% versus
8.3% now. Federal Reserve Chairman Ben Bernanke had voiced his
concerns about the long-term prospects of jobs and the unemployment
situation. Jobs markets have been showing a positive trend in
recent days, but are still far behind pre-recessionary levels. The
Dow’s current level may therefore not depict an accurate picture
about the financial scenario, which is fraught with European debt
concerns.
As for the individual sectors, the
financial sector was one of the leading gainers and the Financial
SPDR Select Sector Fund (XLF) was up 0.7%. As for the stocks of
this sector, Citigroup, Inc. (NYSE:C), JP Morgan Chase & Co.
(NYSE:JPM), The Goldman Sachs Group, Inc. (NYSE:GS), U.S. Bancorp
(NYSE:USB) and Wells Fargo & Company (NYSE:WFC) increased 0.6%,
1.2%, 1.0%, 0.9% and 2.4%, respectively.
CITIGROUP INC (C): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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