Stock Market News for August 31, 2012 - Market News
31 Agosto 2012 - 11:06AM
Zacks
Encouraging consumer spending data
and strong sales figures from major retailers failed to avoid
benchmarks’ fall yesterday as investors remained cautious ahead of
Ben Bernanke’s speech. The S&P 500 settled below the 1, 400
level for the first time since August 6. Also, none of the industry
groups in S&P settled in the green. The financial sector was
heavily battered as investors preferred to offload their positions
ahead of Bernanke’s speech.
The Dow Jones Industrial Average
(DJI) slumped 106.77 points or 0.8% to close at 13,000.71. The
Standard & Poor 500 (S&P500) also dropped 0.8%to finish
yesterday’s trading session at 1,399.48. The tech-laden Nasdaq
Composite Index was down 1.1% and ended at 3,048.71. The fear-gauge
CBOE Volatility Index (VIX) added 4.5% and settled at 17.83.
Volumes continued to be among the lowest for the year and it was a
mere 2.8 billion shares on the New York Stock Exchange. The average
consolidated volumes for the week till Thursday is at 4.49 billion
shares on the New York Stock Exchange, Nasdaq and American Stock
Exchange; the lowest levels for 2012 so far. The declining stocks
far outpaced the advancing ones; as for 68% stocks that declined,
only 28% stocks closed higher.
As for the economic readings, the
real consumer spending expanded in July, rebounding from a
contraction in June. The Bureau of Economic Analysis reported that
Personal consumption expenditures (PCE) rose 0.4% or $46.1 billion.
The real PCE was up 0.4% as against a decline of 0.1% in June. The
report also noted that the personal income increased 0.3% and
disposable personal income (DPI) added 0.3% in July.
Separately, retailers including
Target Corp. (NYSE:TGT), Macy's, Inc. (NYSE:M), Gap Inc. (NYSE:GPS)
and Nordstrom Inc. (NYSE:JWN) reported encouraging August sales
numbers. This combined with the positive consumer expenditure data
should have been encouraging headlines for the benchmarks to have
finished in the green. However, that was not the case yesterday as
a cautious stance coupled with no drop in initial claims and
discouraging signs from international frontiers dragged benchmarks
to the negative zone.
As for the international jitters,
Greek Prime Minister Antonis Samaras pressed on the need of the
austerity measures in 2013-2014. He did mention that the “cutbacks
are difficult, painful,” and added, ““But they are also inevitable.
For without them the country would return to zero credibility and
effectively leave the euro. Which would...destroy the
country”. However, he also mentioned that this cutback would
be the last major austerity measure. Separately, German Chancellor
Angela Merkel’s talks with Chinese Premier Wen Jiabao failed to
assure him about the European region, as Wen Jiabao urged that the
embattled European nations must pick up austerity measures.
Coming back to the domestic front,
the U.S. Department of Labor reported that the seasonally adjusted
initial claims in the week ending August 25 remained flat with the
previous week at 374,000. It was also somewhat weaker than the
consensus estimates of 373,000.
While the these negatives weighed
on investor sentiment, they also remained on the edges as the
investors are apprehensive about what Federal Reserve Chairman have
to divulge regarding the need of another economic stimulus. The
Federal Reserve’s annual meeting is scheduled at Jackson Hole on
Friday. Through the week, investors remained cautious and refrained
from betting big bucks. While some investors have been optimistic
about a definite clue regarding the third quantitative easing,
there have been strategists who opined otherwise. Very recently,
economic data have been on the brighter side, including positive
housing figures and GDP data showing slight advance in the second
estimate from the initial estimate.
Thus, with the apprehensions alive,
investors chose to sell their shares and the financial sector also
bore the brunt. The Financial Select Sector SPDR (ETF) dropped 0.5%
and stocks including Citigroup Inc. (NYSE:C), JPMorgan Chase &
Co. (NYSE:JPM), U.S. Bancorp (NYSE:USB), Goldman Sachs Group, Inc.
(NYSE:GS) and Wells Fargo & Company (NYSE:WFC) dropped 0.9%,
1.1%, 0.6%, 0.8% and 0.6%, respectively.
CITIGROUP INC (C): Free Stock Analysis Report
GAP INC (GPS): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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