Stock Market News for February 8, 2012 - Market News

By Zacks Equity Research,

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Markets recouped the day's early losses to end modestly higher on Tuesday, following reports that Greece was close to concluding an agreement with private creditors. Domestic data that suggested improving job conditions also contributed towards the buoyant mood. However, the gains were anything but robust, as investors refrained from betting big until the deal finally comes through. Nonetheless, the Dow closed at its highest level since May 2008, while seven of the ten industry groups in the S&P 500 posted modest gains.

All of the benchmarks were trading in the negative zone during the initial hours with the Dow Jones Industrial Average (DJI) hitting an intra-day low of 12,782.57. The Dow recouped its losses to finally end 0.3% higher at 12,878.20. The Standard & Poor 500 (S&P 500) gained 0.2% to sign off yesterday's trading session at 1,347.05. The tech-laden Nasdaq Composite Index edged up 0.07% to close at 2,904.08. Consolidated volumes on the New York Stock Exchange, the American Stock Exchange and Nasdaq remained weak at about 6.48 billion shares, lower than last year's daily average of 7.84 billion. For 55% of the advancers on the NYSE, 41% of the stocks moved lower. The remaining stocks were left unchanged.

Reports from across the Atlantic which suggested that Greece was close to inking a deal with private creditors lifted the overall sentiment. Greece's government is preparing a list of economic measures that will qualify them for the next bailout package. French and German leaders have demanded that the nation adopt new austerity measures if they expect to receive the next installment of the bailout package. Greece is in dire need of the $171 billion in order to avoid a debt default. Earlier, during a joint briefing with French President Nicolas Sarkozy, Merkel had commented: "Time is running out".

Meanwhile, speaking before Congress, Federal Reserve Chairman Ben Bernanke said: "Banks have made progress in protecting themselves against problems in European sovereign or bank debt. But I would agree that if there is a very substantial crisis or similar problem in Europe that, because there are so many channels in which that would flow to the financial system, our banks, our whole financial system would still be significantly affected".

Additionally, he told the Senate Budget Committee that there is "a long way to go before the labor market can be said to be operating normally." Recent data has mostly been positive, suggesting an improving jobs market. The unemployment rate fell to 8.3% in January and the latest government report also reflects the strongest jobs growth in nine months. Initial claims have showed a downtrend and are well below the significant 400, 000 mark. Even yesterday, a report from Labor Department suggested that job openings in December climbed to the highest level in almost a year. Job openings soared to 3.38 million, rising by 258, 000 in December, the biggest jump since February 2011.

However, as mentioned earlier, Bernanke maintained a cautious outlook on the job scenario. He said: "We are concerned that over the past few years that there has been some modest increase in the sustainable rate of unemployment. One of the factors contributing to that is the fact that about 40 percent of the unemployed have been unemployed for six months or more and those folks lose skills, they lose attachment to the labor force. It makes it difficult for them to find steady employment in the longer-term".

Utilities and consumer discretionary stocks posted decent performance among the S&P 500's sectors. The Utilities SPDR Select Sector Fund ( XLU ) fund was up 0.7% and the Consumer-Discretionary SPDR Select Sector Fund ( XLY ) gained 0.5%. Among utilities' stocks, The Southern Company (NYSE: SO ), Duke Energy Corporation (NYSE: DUK ), American Electric Power Company (NYSE: AEP ), NextEra Energy, Inc. (NYSE: NEE ) gained 0.7%, 1.0%, 0.7% and 0.4%, respectively. As for the Consumer-Discretionary stocks, McDonald's Corporation (NYSE: MCD ),, Inc. (NASDAQ: AMZN ), Nike, Inc. (NYSE: NKE ) and Starbucks Corporation (NASDAQ: SBUX ) gained 1.4%, 0.6%, 0.7% and 0.3%, respectively.


AMER ELEC PWR ( AEP ): Free Stock Analysis Report
AMAZON.COM INC ( AMZN ): Free Stock Analysis Report
DUKE ENERGY CP ( DUK ): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis Report
NEXTERA ENERGY (NEE): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
STARBUCKS CORP (SBUX): Free Stock Analysis Report
SOUTHN COMPANY (SO): Free Stock Analysis Report
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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing US Markets
Referenced Stocks: AEP , AMZN , DUK , XLU , XLY

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