Encouraging corporate results and Spain's falling borrowing
costs boosted the markets to their best performance in nearly a
month. The Dow rose for the fourth time out of the last five
trading sessions and is back over its key 13, 000 level.
Additionally, the Nasdaq posted its best performance of the
year.
The Dow Jones Industrial Average (DJI) soared 194.13 points or
1.5% to finish at 13,115.54. The Standard & Poor 500 (S&P
500) was up 1.6% and closed yesterday's trading session at
1,390.78. The tech-laden Nasdaq Composite Index sprung 1.8% to
settle at 3,042.82. The fear-gauge CBOE Volatility Index (VIX)
declined 5.6% to settle at 18.46. Consolidated volumes on the New
York Stock Exchange (NYSE), Nasdaq and the American Stock Exchange
were roughly 6 billion shares, lower than the year-on-year average
of approximately 6.78 billion shares. Advancers outnumbered the
decliners on the NYSE; as for every stock that declined, more than
3 stocks ended in the green.
Meanwhile, the Dow is now back above the 13, 000 mark after over
a week of languishing below that level. This was also the Dow's
biggest gain in almost a month in terms of points, and it had
rallied 209 points during the trading session. The S&P 500 is
still below its key 1,400 level but has now narrowed the gap to
precisely 9.22 points. The Nasdaq extended its gains above its key
level and posted its best performance for the year until now.
Apple Inc. (NASDAQ:
AAPL
), was a major contributor to the Nasdaq's gains after it jumped
5.1% yesterday. The world's most valued company, Apple, bounced
back after plunging for five-straight trading days. A slide in the
iPhone and iPad maker's stock had dented the Nasdaq substantially.
This was clearly evident on Monday when a 4.2% drop in Apple
dragged down the index.
Other tech shares also enjoyed decent gains, and the technology
sector was one of the best performers among the 10 industry groups
in the S&P 500. The Technology Select Sector SPDR (
XLK
) jumped 2.2% and stocks including Microsoft Corporation (NASDAQ:
MSFT
), Oracle Corporation (NASDAQ:
ORCL
), Dell Inc. (NASDAQ:
DELL
), Cisco Systems, Inc. (NASDAQ:
CSCO
) and Juniper Networks, Inc. (NYSE:
JNPR
) gained 1.2%, 2.3%, 1.6%, 1.8% and 3.7%, respectively. Meanwhile,
tech bellwethers such as International Business Machines
Corporation (NYSE:
IBM
), Intel Corporation (NASDAQ:
INTC
) and Yahoo! Inc. (NASDAQ:
YHOO
), which were scheduled to report their earnings results
after the closing bell, gained 2.3%, 0.2% and 1.5%,
respectively.
While investors waited results from these tech bellwethers,
their sentiment had already received a boost from several
encouraging corporate results released earlier during the day. The
Coca-Cola Company (NYSE:
KO
) came out with its first quarter 2012 results that surpassed the
Street's estimates. The cola giant was joined by Johnson &
Johnson (NYSE:
JNJ
) and financial bellwether The Goldman Sachs Group, Inc. (NYSE:
GS
). Both these companies reported encouraging figures and Goldman
Sachs' first quarter 2012 earnings per share of $3.92 was more than
double of its prior quarter's earnings of $1.84 per share.
Also helping the markets' rally yesterday was a fall in Spain's
borrowing costs. Spanish bond-yields have trending up of late and
that has sparked off fears among investors. However, the fall in
the nation's 10-year government bond yield to 5.88% from the 6.1%
attained on Monday brought relief to the US benchmarks. The
downtrend had also enabled European stocks to notch their best
gains in almost four months. Further, this clearly shows that
investors have gained confidence about the nation's financial
ability. The bond auction was well received and the country sold
more 12- and 18-month bills than it had expected to sell.
Coming to domestic economic data, the U.S. Department of Housing
and Urban Development reported that privately-owned housing starts
in March fell 5.8% from revised February estimate of 694,000 to a
seasonally adjusted annual rate of 654,000 in March. Consensus
estimates had projected privately-owned housing starts to clock a
figure of 704, 000. Additionally, in the joint release by the The
U.S. Census Bureau and the Department of Housing and Urban
Development, building permits in March were reported to have
climbed 4.5% over the revised February rate of 715,000 and stood at
747,000 in March.
Separately, industrial production remained flat for the second
month in March, while manufacturing output dropped. The report by
the Board of Governors of the Federal Reserve System reported:
"Industrial production was unchanged in March for a second month
but rose at an annual rate of 5.4 percent in the first quarter of
2012. Manufacturing output declined 0.2 percent in March but jumped
10.4 percent at an annual rate in the first quarter".
APPLE INC (
AAPL
): Free Stock Analysis Report
CISCO SYSTEMS (
CSCO
): Free Stock Analysis Report
DELL INC (
DELL
): Free Stock Analysis Report
GOLDMAN SACHS (
GS
): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis
Report
JUNIPER NETWRKS (JNPR): Free Stock Analysis
Report
COCA COLA CO (KO): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis
Report
ORACLE CORP (ORCL): Free Stock Analysis Report
YAHOO! INC (YHOO): Free Stock Analysis Report
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