Benchmarks rallied on Black Friday propelled by encouraging
economic reports from China and Germany. Volumes were at their
lowest this year, owing to a holiday-shortened trading session.
U.S. stocks registered their best weekly performance since June.
Meanwhile, the S&P 500 posted its second best weekly
performance of the year. The technology sector was the biggest
gainer while utilities was the only loser among the S&P 500
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The Dow Jones Industrial Average (DJI) surged 1.4% to close the
day at 13,009.68. The Standard & Poor 500 (S&P 500)
gained 1.3% to finish Friday's trading session at 1,409.15. The
tech-laden Nasdaq Composite Index jumped 1.4% to end at 2,966.85.
The fear-gauge CBOE Volatility Index (VIX) declined 1.1% to
settle at 15.14. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 2.8
billion shares, significantly lower than the year-on-year daily
average of 6 billion shares. Advancing stocks outpaced decliners
on the NYSE; as for 53% stocks that rose, 42% stocks moved lower.
The trading session began on a positive note after a report from
Munich's Ifo institute revealed that German business confidence
surged unexpectedly in November. According to the report, the
German business climate index increased to 101.4 from 100 in
October, beating economists' estimates of 99.5. This is for
the first time in eight months that German business confidence
enjoyed an uptrend. Separately, the European Commission has
estimated that the German economy will grow 0.8% this year and in
the coming year.
Meanwhile, manufacturing in China increased in November and
reached its highest level in thirteen months. According to HSBC
Corporation, China's preliminary Purchasing Managers' Index
increased to 50.4 in November from 49.5 in October. According to
experts, data shows that the world's second largest economy is on
track to recovery and growth for the rest of the year will be
stronger. According to Qu Hongbin, chief economist for HSBC
China, "The November flash reading of HSBC manufacturing PMI
confirms again that the economic recovery continues to gain
momentum toward the year end."
For the week ending November 23, the blue-chip index gained 3.3%,
the S&P 500 surged 3.6% and the Nasdaq jumped 4.0%.
Benchmarks registered one of their best weekly rallies after
President Barack Obama's meeting with top U.S. leaders hinted at
"constructive" development regarding the "fiscal cliff". The
impact of $600 billion in tax increases and spending cuts will
take its effect from the beginning of 2013 if not resolved by
Meanwhile, investors eagerly await the outcome of the meeting
among Euro zone finance ministers, International Monetary Fund
and the European Central Bank in Brussels. They will be meeting
for the third time to discuss measures to reduce the Greece debt
crisis. Euro zone finance ministers had postponed the much needed
$40 billion installment for the Greece's bailout loan in their
previous two meetings.
The technology sector had a good run and was the biggest gainer
among the S&P 500 industry groups. The Technology SPDR (XKL)
gained 1.6%. Stocks such as Apple Inc. (NASDAQ:
), Hewlett-Packard Company (NYSE:
), Dell Inc. (NASDAQ:
), Microsoft Corporation (NASDAQ:
) and Cisco Systems, Inc. (NASDAQ:
) jumped 1.7%, 4.2%, 5.4%, 2.8% and 2.0%, respectively.
The Utilities SPDR lost 0.3% and was the only sector to close in
the red. Stocks such as Exelon Corporation (NYSE:
), Public Service Enterprise Group Inc. (NYSE:
), The Southern Company (NYSE:
), Entergy Corporation (NYSE:
) and PPL Corporation (NYSE:
) lost 1.0%, 0.5%, 0.6%, 0.4% and 0.5%, respectively.