President Barack Obama's encouraging comments on the Fiscal
Cliff issue and positive factory orders data guided Dow and
S&P 500 into the green. But a slump in Apple's shares dragged
Nasdaq into negative territory. Apple recorded its worst one-day
performance since 2008. Meanwhile, factory orders increased
modestly in October. The financial sector was a major gainer
among the S&P 500 industry groups.
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The Dow Jones Industrial Average (DJI) gained 0.6% to close the
day at 13,034.49. The Standard & Poor 500 (S&P 500) rose
0.2% to finish yesterday's trading session at 1,409.28. The
tech-laden Nasdaq Composite Index dropped 0.8% to end at
2,973.70. The fear-gauge CBOE Volatility Index (VIX) lost 3.9% to
settle at 16.46. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.93
billion shares, higher than the daily average of 6.48 billion
shares. Advancing stocks edged past decliners on the NYSE; as for
50% stocks that rose, 46% stocks moved lower.
A large number of stocks ended higher after declining for two
consecutive days. President Obama's comments about the Fiscal
Cliff pushed stocks higher in the afternoon. In a volatile
trading session, the S&P 500 had dropped into negative
territory initially but rebounded in the later part of the day.
The Dow gained as much as 137 points before ending the session
with a gain of 82 points.
Apple Inc. (NASDAQ:
) tumbled 6.4% and recorded its worst day in four years. Apple
plunged after COR Clearing increased the iPhone maker's margin
requirement to 60% from 30%. Apple's market capitalization
reduced by nearly $35 billion and it was the biggest one-day
market capitalization loss ever for the tech giant.
The Technology SPDR (XLK) was negatively affected due to this.
Stocks such as SanDisk Corporation (NASDAQ:
), Google Inc (NASDAQ:
), Intel Corporation (NASDAQ:
) and NVIDIA Corporation (NASDAQ:
) lost 1.2%, 0.5%, 0.6% and 1.1%, respectively. Thus, tech-heavy
Nasdaq remained the solitary benchmark to miss a seat in the
President Barack Obama met corporate chief executives on
Wednesday to discuss the Fiscal Cliff issue. Speaking to
corporate chief executives on the fiscal cliff issue, Obama said:
"We can probably solve this in about a week, it's not that
tough." However, he again emphasized increasing tax rates of rich
Americans. Congress needs to seal a deal about the Fiscal Cliff
issue, otherwise it might result in another recession. The Fiscal
Cliff is about to take effect in less than four weeks.
Meanwhile, factory orders increased modestly in October.
According to the U.S. Commerce Department, factory orders gained
0.8% to $477.6 billion in October, beating consensus estimates of
a break even figure. Shipments gained 0.4% to $482.3 billion,
whereas unfilled orders gained 0.3% to $982.9 billion. Orders for
inventories have risen for four consecutive months, gaining 0.1%
to $616.0 billion in October.
Automatic Data Processing's (NASDAQ:
) National Employment report revealed that the U.S. private
sector added 118,000 jobs in November compared to 158,000 in
October. This was below the Street's estimates. According to the
report, large businesses added 66,000 jobs, while small and
medium businesses added 19,000 and 33,000
jobs, respectively. The service sector added 114,000 jobs,
whereas goods sector accounted for 4,000 more jobs.
Professional/business services and construction industry added
16,000 and 23,000 jobs, respectively. However, the manufacturing
industry reported a decline of 16,000 jobs.
Citigroup Inc. (NYSE:
) jumped 6.3% after the company said it will layoff 11,000
employee to lower expenses and improve efficiency. The company
expects to save more than $1.1 billion. The news pushed the
banking shares higher and the Financial Select Sector SPDR (XLF)
gained 1.2%. Stocks such as Bank of America Corp (NYSE:
), Goldman Sachs Group, Inc. (NYSE:
), JPMorgan Chase & Co. (NYSE:
) and Morgan Stanley (NYSE:
) surged 5.7%, 0.5%, 1.6% and 2.2%, respectively.