In one of the quietest trading sessions of the year, markets
closed negligibly lower as Germany raised objections about bond
purchases by the ECB. With minute losses yesterday, the Dow and
S&P 500 still remained close to their individual multi-year
highs. Meanwhile, tech bellwether Apple emerged as the most
valuable company ever.
The Dow Jones Industrial Average (DJI) slipped 0.03% to close
merely 3.56 points lower at 13,271.64. The Standard & Poor 500
(S&P 500) dropped 0.03 point to close almost unchanged at
1,418.13. The tech-laden Nasdaq Composite also ended the day almost
at the level at which it had started the day, dropping 0.01% to
finish at 3,076.21. The fear-gauge CBOE Volatility Index (VIX)
gained 4.2% to settle at 14.02. Consolidated volumes on the New
York Stock Exchange, American Stock Exchange and Nasdaq remained
low at roughly 4.83 billion shares, sharply lower than the daily
average of 6.64 billion shares. Declining stocks on the NYSE
outpaced the advancing ones; as for 54% stocks that declined, 43%
stocks closed in the green.
Markets were extremely reluctant to move yesterday thanks to the
absence of domestic headlines. The summer holidays, a wait and
watch attitude by investors who await concrete steps from central
banks and the lack of major economic reports combined to keep
volumes in check. Eventually, markets closed hardly changed. Thus,
benchmarks continue to be shy of multi-year highs. The S&P 500
is roughly a point lower than a four-year high.
Given the dearth of domestic developments, it was news from the
European region that determined market movement yesterday. The
central bank of German, Bundesbank, opposed European Central Bank's
(ECB) idea of bond purchases. In a monthly report, Germany's
central bank noted: "The Bundesbank remains critical of the
purchase of euro system sovereign bonds, which comes with
considerable risks for stability". The statement somewhat dampens
the cheer sparked off by ECB's announcement that it would buy
Italian and Spanish bonds in an order to fight these nations'
incremental borrowing costs.
Interestingly, Bundesbank's statement comes only few days after
German Chancellor Angela Merkel said all efforts would be taken to
help the European Central Bank tackle the region's debt crisis.
Merkel had said that an earlier statement by the ECB President
Mario Draghi to do "whatever it takes" to preserve the Euro-zone
was in tune with what European leaders have been working on. "We
feel committed to do everything we can in order to maintain the
common currency," Merkel added.
While benchmarks struggled for direction, technology bellwether
Apple Inc. (NASDAQ:
) climbed 2.6% yesterday to reach an all time high of $665.15 a
share. Following yesterday's gains, Apple has become the world's
most valuable company ever. Apple boasts of a market value of $623
billion and it has broke an earlier record set by Microsoft
) around the bubble period in 1999. Apple is now far ahead of its
competitors in the pecking order of most valuable companies and its
worth is roughly double than that of Exxon Mobil Corporation (NYSE:
), ranked second.
The technology sector managed to chalk up modest gains yesterday
and the Technology Select Sector SPDR (XLK) ended roughly 0.1%
higher. However, technology heavyweights such as Google Inc
), Microsoft Corporation, International Business Machines Corp.
) and Intel Corporation (NASDAQ:
) dropped 0.2%, 0.5%, 0.4% and 0.4%, respectively.
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