Markets struggled to find a definite course in the absence of
news yesterday and investors struggled to decide on their course of
action. Eventually, volumes remained at the lowest level for the
year. However, while the blue-chip index and S&P 500 slipped
marginally, Nasdaq managed to finish in the green riding on Apple's
gains. A key legal advantage for the iPhone maker led the share to
a new high yesterday. Investors also continued to maintain a
cautious stance, as they await Federal Reserve Chairman Ben
Bernanke's speech on Friday.
The Dow Jones Industrial Average (DJI) dropped 0.3% to close the
day at 13,124.67. The Standard & Poor 500 (S&P 500) slipped
a meager 0.69 point or 0.05% to finish yesterday's trading session
at 1,410.44. The tech-laden Nasdaq Composite Index was the only
gainer, edging up 0.1% to end at 3,073.19. The fear-gauge CBOE
Volatility Index (VIX) jumped 7.7% to settle at 16.35. Consolidated
volumes on the New York Stock Exchange, American Stock Exchange and
Nasdaq were roughly 4.46 billion shares, significantly lower than
the year-to-date average of 6.6 billion shares. A Bloomberg report
noted that volumes were at their lowest since 2008 after leaving
out the days around holidays. Declining stocks edged past the
advancers on the NYSE; as for 50% stocks that declined, 46% stocks
closed higher.
The lack of major developments kept investors away from the
Street. Moreover, they are also waiting for concrete action from
the central banks of key economies including the U.S. Europe and
even China. Over the last couple of weeks, possibilities of fresh
economic stimulus have see-sawed in Europe as well as in the U.S.
Meanwhile there were indications that the European Central Bank
(ECB) will buy back Italian and Spanish bonds. Recent reports have
also suggested that the ECB is considering a 'yield band target'
for the bond purchase plan. However, the plan has hit some
roadblocks with the German central bank, Bundesbank, opposing ECB's
idea to go ahead with bond purchases.
Even developments regarding the economic stimulus plan in U.S.
have sent out mixed signals over the past few days. While the
minutes from the Federal Open Market Committee's (FOMC) meet
suggested that "many members" were in favor of additional measures,
St. Louis Fed President James Bullard created uncertainty about
additional economic stimulus arriving anytime soon saying the
present economic situation does not warrant the need for QE3.
Thus, investors have gone into a shell and are waiting for the
outcome of the Federal Reserve's annual meeting scheduled for the
end of this week at Jackson Hole. The central bank chairman's
speech at the annual convention is a key one. Investors' eyes are
now fixed on this meet. Thus, they have currently refrained from
betting big bucks.
The only headline of any importance came from tech-bellwether
Apple Inc. (NASDAQ:
AAPL
). A nine member jury of the U.S. District Court in San Jose,
California, ruled in favor of Apple in a patent-related case
against its rival Samsung. The court ruled that Samsung had
infringed upon six of Apple's patents and ordered Samsung to pay
$1.05 billion to Apple. Additionally, all the counter claims by
Samsung were rejected. This marks a major advantage for Apple and
it will help the iPhone maker limit the growth of its rival as well
as Google Inc.'s (NASDAQ:
GOOG
) Android operating systems. While Apple's shares jumped 1.9% and
had also touched an all time high of $680.87, shares of Google
dropped 1.4%.
Apple is the biggest component of the Nasdaq and any movement in
the stock has a significant impact on Nasdaq's direction. Thus,
gains made by Apple lifted Nasdaq higher. Even the technology
sector finished in the green and the Technology Select Sector SPDR
(XLK) was up 0.1%. However, key technology stocks including
Hewlett-Packard Company (NYSE:
HPQ
), Dell Inc. (NASDAQ:
DELL
), International Business Machines Corp. (NYSE:
IBM
), Intel Corporation (NASDAQ:
INTC
), NVIDIA Corporation (NASDAQ:
NVDA
) dropped 2.1%, 1.2%, 1.1%, 0.3% and 1.7%, respectively.
APPLE INC (AAPL): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
Report
HEWLETT PACKARD (HPQ): Free Stock Analysis
Report
INTL BUS MACH (IBM): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research