Benchmarks ended mixed yesterday after a favorable housing
report countered apprehensions about the Spanish bailout.
Uncertainty about when Spain would seek a bailout was a matter of
concern. Also, a decline in the materials sector restricted
markets' gains.
The Dow Jones Industrial Average (DJI) lost 0.2% and closed at
13,482.36. The Standard & Poor 500 (S&P 500) gained a mere
1.26 points or 0.1% and finished yesterday's trading session at
1,445.75. The tech-laden Nasdaq Composite Index closed at 3,120.04,
after rising 0.2%. The fear-gauge CBOE Volatility Index (VIX) shed
3.7% to settle at 15.71. Consolidated volumes on the New York Stock
Exchange, American Stock Exchange and the Nasdaq were roughly 5.7
billion shares, lower than the year-on-year daily average volume of
6.38 billion. The advancers on the New York Stock Exchange outpaced
the declining stocks; as for 51% stocks that gained, 45% stocks
closed lower.
It was the uncertainty about when Spain would ask for a bailout
package that left the benchmarks mostly static. European Officials
told Reuters that Spain will ask for a bailout next weekend.
Moreover, an official hinted that German has urged Spain to hold
back the bailout request. However, Spain's Prime Minister, Mariano
Rajoy, said the bailout 'was not imminent'. To add to the
apprehensions, he said: "If a news agency reports that we'll ask
for aid this weekend, there can only be two explanations; that the
agency is right, and knows more than I do, which is possible, or
that they are not right".
Separately, ratings agency Moody's continued its review of
Spain's sovereign rating. A spokeswoman for the ratings agency
said:"Moody's review of Spain's rating is continuing to assess a
number of factors, including Spanish banks' capital needs, the
nature and size of support mechanisms, the recently released 2013
budget plan and the consequences for the euro area's crisis
management framework of the further advancement of a banking
union". Earlier in September, Standard & Poor's ratings
chief for Europe, Africa and the Middle East said that since the
European Central Bank might help Spain to overcome its debt crisis,
it would not downgrade the country into 'junk' status in the near
future.
Real estate data provider Corelogic Inc. (NYSE:
CLGX
) reported yesterday that U.S. home prices rose for the sixth
consecutive month in August. The company's home price index
increased 0.3% in August from the prior month. Also, the 4.6%
year-on-year jump was the best since July 2006. Further,
excluding distress sales, home prices might go up 0.6% in September
and 6.3% on a year-on-year basis.
The encouraging housing data subsequently boosted housing
stocks. The SPDR S&P Homebuilders (XHB) jumped 0.5% and stocks
including M.D.C. Holdings, Inc. (NYSE:
MDC
), KB Home (NYSE:
KBH
), PulteGroup, Inc. (NYSE:
PHM
), Hovnanian Enterprises Inc. (NYSE:
HOV
) and Toll Brothers Inc. (NYSE:
TOL
) soared 1.8%, 1.7%, 1.6%, 1.2% and 0.8%, respectively.
Meanwhile, shares of PetSmart, Inc. (NASDAQ:
PETM
) gained 1.5% to end at $68.55 yesterday, a day after S&P Dow
Jones Indices announced that Sunoco, Inc. (NYSE:
SUN
) will be replaced by PetSmart in the S&P 500 list with effect
from October 4. Separately, fertilizer manufacturer Mosaic Co.
(NYSE:
MOS
) reported lower than expected first quarter results as lower
demand from China and India dented its profits. Consequently, its
shares dropped 3.9% and closed at $55.76.
The materials sector was the major loser yesterday and Materials
Select Sector SPDR (XLB) plunged 0.5% and stocks including FMC
Corporation (NYSE:
FMC
), E I Du Pont De Nemours And Co. (NYSE:
DD
), Eastman Chemical Company (NYSE:
EMN
), PPG Industries, Inc. (NYSE:
PPG
) and The Dow Chemical Company (NYSE:
DOW
) lost 1.8%, 1.7%, 0.8%, 0.8% and 0.5%, respectively.
CORELOGIC INC (CLGX): Free Stock Analysis
Report
DU PONT (EI) DE (DD): Free Stock Analysis
Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
EASTMAN CHEM CO (EMN): Free Stock Analysis
Report
FMC CORP (FMC): Free Stock Analysis Report
HOVNANIAN ENTRP (HOV): Free Stock Analysis
Report
KB HOME (KBH): Free Stock Analysis Report
MDC HLDGS (MDC): Free Stock Analysis Report
MOSAIC CO/THE (MOS): Free Stock Analysis Report
PETSMART INC (PETM): Free Stock Analysis Report
PULTE GROUP ONC (PHM): Free Stock Analysis
Report
PPG INDS INC (PPG): Free Stock Analysis Report
SUNOCO INC (SUN): Free Stock Analysis Report
TOLL BROTHERS (TOL): Free Stock Analysis Report
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