Stock Market News for March 30, 2012 - Market News

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Except for the Dow, which staged a comeback in the final hours, the benchmarks closed in the red yesterday as economic data that included a lower-than expected drop in initial claims dampened investor sentiment. Markets have been witnessing selling pressure as the quarter nears its end, but benchmarks have put in decent performances starting this year as also this month.

The Dow Jones Industrial Average (DJI) edged up 0.2% and closed the day at 13,145.82. The Standard & Poor 500 (S&P 500) dropped 0.2% and finished yesterday's trading session at 1,403.28. The tech-laden Nasdaq Composite Index was down to 3,095.36, lower by 0.3%. The fear-gauge CBOE Volatility Index (VIX) was nearly flat yesterday as it gained a negligible 0.01 to close at 15.48. Consolidated volumes on the New York Stock Exchange, the Nasdaq and the Amex were 6.80 billion shares, marginally short of the daily average volume of 6.83 billion. Decliners held an edge over the advancing stocks on the NYSE, as they outnumbered the gainers by a ratio of 3:2.

The day's action largely depended on economic data, which unfortunately for the markets failed to please. The U.S. Department of Labor reported a 5,000 decline in seasonally adjusted initial claims for the week ending March 24, to 359,000, compared with previous week's revised figure of 364,000. Following this drop, initial claims were at the lowest point since April 2008. However, the less-than-expected drop in initial claims acted as a drag on the markets. Consensus estimates had projected the figure to come in at 349, 000.

Yesterday, the U.S. Department of Commerce came out with the third estimate of Gross Domestic Product ( GDP ), or the second revision of the original figure. The Bureau of Economic Analysis in its third estimate said that Real GDP increased at an annual rate of 3.0% in the final quarter of 2011.  The 3.0% growth rate was in line with the second estimate, but the third estimate consists of 'more complete source data' than the latter. According to the report, private inventory investment, personal consumption expenditures ( PCE ), non-residential fixed investment, exports, and residential fixed investment positively impacted the GDP, whereas federal government spending and state and local government spending were the deterrents.  The 3.0% growth in GDP was lower than consensus estimates of 3.1%, and failed to create any optimism.

The report also noted: "Real personal consumption expenditures increased 2.1 percent in the fourth quarter, compared with an increase of 1.7 percent in the third.  Durable goods increased 16.1 percent, compared with an increase of 5.7 percent.  Nondurable goods increased 0.8 percent, in contrast to a decrease of 0.5 percent.  Services increased 0.4 percent, compared with an increase of 1.9 percent".

Meanwhile, a report from the Federal Reserve Bank of Kansas City revealed that higher gasoline prices had taken a toll on manufacturing activity in the region. The Kansas City Fed's manufacturing composite index, which is the average of the indexes covering production, new orders, employment, delivery times and raw-materials inventories slowed to 9 in March from 13 in the prior month.

While these reports dampened investment sentiment, the blue-chip index managed to rebound only in the late hours as buyers moved to take advantage of the selling pressure. Alcoa, Inc. (NYSE: AA ) led the gains among the 30 Dow components, jumping 2.0%, followed by stocks including Caterpillar Inc. (NYSE: CAT ), Chevron Corporation (NYSE: CVX ), Intel Corporation (NASDAQ: INTC ), The Coca-Cola Company (NYSE: KO ), McDonald's Corp. (NYSE: MCD ) and United Technologies Corp. (NYSE: UTX ), which gained 1.7%, 0.9%, 1.3%, 1.6%, 0.6% and 1.0%, respectively.

ALCOA INC ( AA ): Free Stock Analysis Report
CATERPILLAR INC ( CAT ): Free Stock Analysis Report
CHEVRON CORP ( CVX ): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis Report
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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 Symbols: AA , CAT , CVX , GDP , PCE

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