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Stock Market News for November 18, 2011 - Market News

Posted: 11/18/2011 9:06:00 AM
Referenced Stocks: AA;AXP;DD;EI;GE


A positive initial claims report failed to lift benchmarks as incremental borrowing costs in Europe and concerns about the region's debt crisis dented the markets once again. Selling intensified further after a key benchmark fell below a technical level.


The Dow Jones Industrial Average (DJIA) slumped 134 points or 1.1% to settle at 11,770.88. The Standard & Poor 500 (S&P 500) plunged 1.7% and closed at 1,216.18. The Nasdaq Composite Index settled at 2,587.99, dropping roughly 2.0%. The fear-gauge CBOE Volatility Index (VIX) moved up to trade over 34. On the New York Stock Exchange, Amex and Nasdaq, consolidated volumes were 8.6 billion shares, higher than the current daily average which is just above 8 billion shares. For four stocks that declined on the NYSE, only one stock managed to settle in the green.


All of the 30 Dow components settled in negative territory, except Verizon Communications Inc. (NYSE: VZ ) and Wal-Mart Stores Inc. (NYSE: WMT ) that managed negligible gains of 0.1% and 0.09%. Leading the declines were Alcoa, Inc. (NYSE: AA ), American Express Company (NYSE: AXP ), E. I. du Pont de Nemours and Company (NYSE: DD ), General Electric Company (NYSE: GE ), Hewlett-Packard Company (NYSE: HPQ ), JPMorgan Chase & Co. (NYSE: JPM ) and United Technologies Corp. (NYSE: UTX ) which dropped 3.5%, 3.0%, 2.2%, 1.9%, 2.3%, 3.1% and 2.3%, respectively.


The blue-chip index had shed more than 200 points at one point, but it recouped some of those later. However, incremental worries are having an adverse impact and the Dow is down 325 points over the last two sessions.

Selling intensified once investor confidence was further dented after the S&P 500 index fell below the key technical level of 1,225. The index had failed to break above the said level for two months starting August, until late October when it reached a two-month high.


As strategists and central banks struggle to ease European debt concerns, borrowing costs of some of the nations of region have been mounting. Italian 10-year bond yields had soared over 7% last week, causing significant damage to the markets. Italian bond-yields have once again reached this unsustainable level, and Spanish bonds have hit their highest levels since 1997. The Spanish Treasury sold 10-year bills with a maximum value over 7%. France is also not far behind in the race as its borrowing cost are also showing an upward movement.


As fears gripped the markets and recessionary worries weighed on investor sentiment, a strong report from the Labor department and a rebound in permits for future home construction could hardly make any impact.  The U.S. Department of Labor reported that seasonally adjusted initial claims for the week ending November 12 had decreased by 5,000 from the prior week's revised figure of 393,000. The data not only came in ahead of 394, 000, the consensus estimate for the current period, but was also at its lowest level in seven-months.


In a separate report, the U.S. Census Bureau and the Department of Housing and Urban Development said: "Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 653,000. This is 10.9 percent (±1.6%) above the revised September rate of 589,000 and is 17.7 percent (±3.4%) above the October 2010 estimate of 555,000". As for the housing starts, the report stated that "privately-owned housing starts in October were down 0.3% following a 7.7% rally in September to a seasonally adjusted annual rate of 628,000".



ALCOA INC ( AA ): Free Stock Analysis Report
AMER EXPRESS CO ( AXP ): Free Stock Analysis Report
DU PONT ( EI ) DE ( DD ): Free Stock Analysis Report
GENL ELECTRIC ( GE ): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
UTD TECHS CORP (UTX): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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