Encouraging earnings results coupled with consumer confidence
and leading indicators data pushed the markets higher on Friday.
After the Dow closed four points short of the highest level since
December 2007 and the S&P 500 nearing a four-year high, The
Wall Street Journal termed it as a 'nail biting' session. Trading
occurred within a tight range and the Dow moved within the smallest
range in two years. However, it was yet again a lackluster day of
trading with volumes remaining low. Friday's gains also ensured
that the Dow and S&P 500 logged their sixth week of consecutive
The Dow Jones Industrial Average (DJI) gained 0.2% and ended at
13,275.20. The Standard & Poor 500 (S&P 500) also added
0.2% and finished Friday's trading session at 1,418.16. The
tech-laden Nasdaq Composite Index jumped 0.5% and closed at
3,076.59. The fear-gauge CBOE Volatility Index (VIX) slumped 5.9%
to drop to 13.45. Total volumes on the New York Stock Exchange
clocked a mere 2.9 billion shares. Advancers outnumbered the
decliners on the NYSE; as for 59% stocks that gained, 36% stocks
Statistically, investors had a lot to cheer about on Friday. The
VIX, which reflects the amount of fear and apprehension in the
markets, was down to its lowest level in five years. More
importantly, investors were eager to see benchmarks trade at
multi-year highs. The Dow fell a mere four points short of its
highest level, achieved in December 2007, ahead of the recession.
The S&P 500 was just a point shy of a four-year high. Also,
these gains ensured that the Dow and S&P 500 finished with a
sixth consecutive weeks of gains. For the week, the Dow, S&P
500 and the Nasdaq gained 0.5%, 0.9%, and 1.8%, respectively.
Volumes have remained low all through this week. Thus, the fact
that benchmarks are approaching multi-year highs comes at a time
when investors are not really betting big bucks. Headlines have
been few and far between on certain days recently. Coupled with the
investors' wait-and-watch attitude and the summer holidays this has
meant markets have moved within a tight range. Strategists have
also opined that investors are awaiting concrete action from the
central banks of the U.S., Europe and even China.
Coming to Friday's developments, retailers lifted sentiment
after posting promising earnings results. Retail heavyweight Gap
) jumped 4.8% after reporting that second quarter income had soared
29%. The company also lifted the mood with its yearly guidance. The
J. M. Smucker Company's (NYSE:
) fiscal first quarter 2013 results surpassed estimates and it also
said fiscal 2013 earnings are expected to be at the higher end of
its guidance range. This announcement provided much encouragement
and shares surged 5.1%. Separately, ANN INC's (NYSE:
) quarterly earnings were up 24% and the company also upped its
guidance. Thus, shares were set for a strong upward movement and
they ended 20.4% higher.
Economic readings also chipped in to sustain the benchmarks'
stay in the green. The University of Michigan-Thomson Reuters
consumer-sentiment index was up to a preliminary reading of 73.6 in
August, jumping to its highest level in three months. This was up
from July's reading of 72.3. Thus, the jump in the index was a key
positive for the economy. The reading of 73.6 also topped consensus
estimates of 72.3.
Separately, the Index of Leading Economic Indicators was up by
0.4% to 95.8 in July. This comes after the 0.4% decline in June.
The index also increased more than consensus estimates of 0.2%. The
fall in initial claims has been a major factor responsible for the
On Friday, industry heavyweight and technological giant Apple
) jumped 1.9% to an all-time high of $648.11. Apple is Nasdaq's
biggest component and thus it helped Nasdaq outperform fellow
benchmarks. Moreover, Apple's new high was also a positive for the
broader markets and other technology shares including Google Inc.
), Oracle Corporation (NASDAQ:
), Cisco Systems, Inc. (NASDAQ:
) and Red Hat, Inc. (NYSE:
) jumped 0.6%, 0.5%, 0.2% and 2.0%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
ANN INC (ANN): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis
GOOGLE INC-CL A (GOOG): Free Stock Analysis
GAP INC (GPS): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
RED HAT INC (RHT): Free Stock Analysis Report
SMUCKER JM (SJM): Free Stock Analysis Report
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