Benchmarks finished in the green propelled by a slew of
positive economic reports. GDP expanded more than initially
expected, initial claims dropped and pending home sales surged in
October. Meanwhile, House Speaker John Boehner's discouraging
comments about the fiscal cliff had erased the initial gains, but
markets rebounded into the green by the end of the trading
session. The materials sector was the biggest gainer among the
S&P 500 industry groups.
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The Dow Jones Industrial Average (DJI) gained 0.3% to close the
day at 13,021.82. The Standard & Poor 500 (S&P 500)
surged 0.4% to finish yesterday's trading session at 1,415.95.
The tech-laden Nasdaq Composite Index rose 0.7% to end at
3,012.03. The fear-gauge CBOE Volatility Index (VIX) dropped 2.9%
to settle at 15.06. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 6.15
billion shares, significantly lower than the daily average of
6.48 billion shares. Advancing stocks easily outpaced decliners
on the NYSE; as for 69% stocks that rose, only 27% stocks moved
Benchmarks began yesterday's trading on a positive note boosted
by a number of encouraging domestic reports. In the early part of
trading, the blue-chip index gained as much as 77 points.
However, it slipped into the negative territory temporarily
following John Boehner's discouraging comments about the fiscal
Speaker of the United States House of Representatives John
Boehner said on Thursday almost no progress has been made
regarding the fiscal cliff issue. Boehner met with Treasury
Secretary Timothy Geithner on Thursday and had a telephonic
conversation with President Barack Obama on the fiscal cliff
issue. Boehner said none of the sides are any way near to avoid
the impending fiscal cliff, which will take effect from the
beginning of the 2013. He said: "No substantive progress has been
made in the talks between the White House and the House over the
last two weeks…There's been no serious discussion of spending
cuts so far, and unless there is, there's a real danger of going
off the fiscal cliff".
Economic reports primarily drove the market yesterday. The U.S
Department of Commerce reported that real gross domestic product
increased in the third-quarter from initial estimate. According
to the "second" estimate, gross domestic product increased 2.7%
annually in the third-quarter. This was above the previous
estimate of 2.0%. In the second-quarter GDP had surged 1.3%. The
increase in GDP in the third-quarter was mainly due to personal
consumption expenditures, private inventory investment, federal
government spending and residential fixed investment.
Additionally, the U.S. Department of Labor revealed that initial
claims decreased during the previous week. According to the
report, the advance figure for seasonally adjusted initial claims
declined 23,000 to 393,000 for the week ending November 24 from
the prior week's revised figure of 416,000. This was below
consensus estimates of 403,000.
Separately, the National Association of Realtors (NAR) reported
that the pending home sales index jumped 5.2% in October to 104.8
from the revised September figure of 99.6. This was well above
consensus estimates that there would be no increases. According
to Lawrence Yun, chief economist of NAR, "We've had very good
housing affordability conditions for quite some time, but we're
seeing more impact now from steady job creation, and rising
consumer confidence about home buying now that home prices have
clearly turned positive".
Among the sectors, the Materials Select Sector (XLB) gained 0.7%
and was the leading gainer among the S&P 500 industry groups.
Stocks such as E I Du Pont De Nemours And Co (NYSE:
), The Dow Chemical Company (NYSE:
), Merck & Co., Inc. (NYSE:
), PPG Industries, Inc. (NYSE:
) and Eastman Chemical Company (NYSE:
) surged 0.7%, 0.4%, 0.3%, 0.6% and 1.1%, respectively.