Strong quarterly results from tech-major Intel coupled with
encouraging housing sector data drove the benchmarks into positive
territory. The positive tone not only enabled Dow to notch up a
triple-digit gain, but all of the benchmarks rebounded to close in
the green for the month.
The Dow Jones Industrial Average (DJI) jumped 103.16 points or
0.8% to close at 12,908.70. The Standard & Poor 500 (S&P
500) added 0.7% and finished yesterday's trading session at
1,372.78. The tech-laden Nasdaq Composite index surged 1.1% and was
up to 2,942.60. The fear-gauge CBOE Volatility Index (VIX) dropped
1.9% to settle at 16.16. Total volume on the New York Stock
Exchange was 3.6 billion shares. For 60% stocks that gained, 36%
stocks moved lower.
Investors have already been buoyed by encouraging corporate
results from JPMorgan Chase & Co. (NYSE:
), Wells Fargo & Company (NYSE:
) and Citigroup, Inc. (NYSE:
). After the upbeat tone in financials, yesterday it was time for
the tech sector to come to the party. Tech bellwether, Intel
) second quarter earnings outpaced the Street's estimates.
Moreover, though revenues were in line with management
expectations, they were up both sequentially as well as on a yearly
Following the earnings surprise, Intel's shares added 3.3%
yesterday and helped the overall rally of the tech sector.
Technology Select Sector SPDR (XLK) jumped 1.7% and stocks
including Microsoft Corporation (NASDAQ:
), International Business Machines Corp. (NYSE:
), Red Hat, Inc. (NYSE:
), VMware, Inc. (NYSE:
), Hewlett-Packard Company (NYSE:
) and Oracle Corporation (NASDAQ:
) gained 2.7%, 2.5%, 4.4%, 12.1%, 2.3% and 1.9%, respectively.
Coming back to Intel's earnings release, the leading producer of
microprocessors for the PC market also released its 2012 guidance
where it said the company expects a 3-5% year on year jump in
revenues. However, the operating margin guidance was chopped by
$100 million from prior forecasts.
We have noticed that some corporate houses have been reducing
their forecasts, owing to uncertain global economic conditions.
Intel's peer, Advanced Micro Devices, Inc. (NYSE:
) had slashed its sales estimates a week back. Other tech companies
like Applied Materials, Inc. (NASDAQ:
) and Infosys Ltd ADR (NASDAQ:
) have also done likewise. However, so far earnings have been on
the bright side. According to S&P Capital IQ, 43 out of 65
S&P 500 companies have managed to surpass estimates.
Also helping improve the mood yesterday was strong housing data
from the U.S. Department of Housing and Urban Development. The
number of housing starts jumped to the highest level since October
2008, and that was reason enough for investors to ring in the
cheer. The report noted that privately-owned housing starts had
jumped 6.9% from revised May estimate to seasonally adjusted annual
rate of 760,000 in June. This was also ahead of consensus estimates
that projected housing starts would move up to 746, 000. As for
building permits, the report noted that "privately-owned housing
units authorized by building permits in June were at a seasonally
adjusted annual rate of 755,000", up 3.7% from May.
On the second day of his congressional testimony, Federal
Reserve Chairman Ben Bernanke said: "It may be possible that we
will take additional action if we conclude we are not making
progress towards higher levels of employment". The statement comes
after a day, when Bernanke on his first day of testimony had
painted a grim picture of the economy. However, while Bernanke
remained elusive about further monetary measures on Tuesday,
markets have been reflecting fresh hopes about economic
APPLD MATLS INC (AMAT): Free Stock Analysis
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INTL BUS MACH (IBM): Free Stock Analysis Report
INFOSYS LTD (INFY): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis Report
RED HAT INC (RHT): Free Stock Analysis Report
VMWARE INC-A (VMW): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis
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