Encouraging reports from China and Europe lifted global
investor sentiment, helping benchmarks finish in the green on
Thursday. Investor optimism about global growth has propelled the
S&P 500 to a new five year high. Meanwhile, the number of
Americans filing for the unemployment benefits increased during
the previous week. Despite a positive global outlook housing
stocks declined yesterday. The financial sector emerged as the
biggest gainer among the S&P 500 industry groups.
The Dow Jones Industrial Average (DJI) gained 0.6% to close
the day at 13,471.22. The Standard & Poor 500 (S&P 500)
added 0.8% to finish yesterday's trading session at 1,472.12. The
tech-laden Nasdaq Composite Index surged 0.5% to end at
3,121.76.The fear-gauge CBOE Volatility Index (VIX) lost 2.3% to
settle at 13.49. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.77
billion shares, higher than the 2012 daily average of 6.42
billion shares. Advancing stocks easily outpaced decliners on the
NYSE; as for 65% stocks that rose, only 31% moved lower.
Benchmarks finished in the green for the second consecutive
day. After an encouraging start to the fourth-quarter earnings
season on Wednesday, benchmarks received another boost following
optimism about global growth pushed. Encouraging international
reports helped the S&P 500 touch its second highest level
since December 2007. The index is only 93 points below the all
time high achieved in October 2007.
A report from China, the world's second largest economy
revealed exports grew at the quickest rate in seven months
following seven consecutive disappointing quarters. China exports
expanded 14.1% on a year on year basis in December, whereas
exports increased 6%. Despite positive trade data from China for
the last month of the year, the country has missed its initial
targets of 10% growth, both in exports and imports by a big
margin. According to Zheng Yusheng, a spokesperson for the
customs office: "China trade still faces uncertainties in 2013."
"But we expect the trade situation will be relatively better
compared to 2012," he added.
European Central Bank President Mario Draghi said the Euro
Zone will continue to struggle in 2013 but conditions will
improve slowly in the later part of the year. He also
said:"Several ... indicators have broadly stabilized, albeit at
low levels and financial market confidence has improved
Meanwhile, initial claims surged for the second consecutive
week. According to the U.S. Department of Labor the advance
figure for seasonally adjusted initial claims increased 4,000 to
371,000 for the week ending January 5 from prior week's revised
figure of 367,000. This was below consensus estimates of 365,000.
Meanwhile, the U.S. Census Bureau revealed that wholesale
inventories increased 0.6% in November to $498.9 billion.
The fourth-quarter earnings season has started on a positive
note following encouraging quarterly results and a positive
outlook from Alcoa Inc (NYSE:
). The company predicted stronger demand for aluminum in 2013.
According to market experts, investors will closely examine the
sales outlook of companies this quarter. Wells Fargo &
) is scheduled to report its quarterly results on Friday.
Housing stocks took a hit and the SPDR S&P Homebuilders
(XHB) lost 0.1%. Stocks such as PulteGroup, Inc. (NYSE:
), M.D.C. Holdings, Inc. (NYSE:
), D.R. Horton, Inc. (NYSE:
), The Ryland Group, Inc. (NYSE:
) and KB Home (NYSE:
) slipped 0.4%, 1.0%, 1.4%, 1.4% and 0.2%, respectively.
Financials were the biggest gainer among the S&P 500
industry groups and the Financial Select Sector SPDR (XLF) gained
1.2%. Stocks such as JPMorgan Chase & Co. (NYSE:
), Wells Fargo & Company (NYSE:
), Goldman Sachs Group, Inc. (NYSE:
), Citigroup Inc. (NYSE:
) and PNC Financial Services (NYSE:
) jumped 1.5%, 2.0%, 2.3%, 1.9% and 1.6%, respectively.
ALCOA INC (AA): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
D R HORTON INC (DHI): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
KB HOME (KBH): Free Stock Analysis Report
MDC HLDGS (MDC): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
PNC FINL SVC CP (PNC): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
WELLS FARGO-NEW (WFC): Free Stock Analysis
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