Stock Market News for November 29, 2011 - Market News
November 29 2011 - 3:06AM
Zacks
On Monday, the Dow logged its best
performance in a month and the markets ended their seven-day losing
streak to end substantively higher, spurred by robust Black Friday
weekend sales and hopes of a resolution to the European debt
crisis. Financials and retailers posted strong gains and all of the
30 Dow components ended in the green.
Breaking the trend of continuous
losses, markets reversed their course as the Dow Jones Industrial
Average (DJIA) leapt 291 points or 2.6% to settle at 11,523.01. The
Standard & Poor 500 (S&P 500) ended higher at 1,192.55,
surging 2.9%. The Nasdaq Composite Index gained 3.5% and closed the
day at 2,527.34. The fear-gauge CBOE Volatility Index (VIX) shed
almost 7% to hover over 32. It was another day of low volumes as
the consolidated volumes on the New York Stock Exchange, Amex and
Nasdaq were 6.8 billion shares, significantly lower than the daily
average of 8 billion shares. On the NYSE, advancers outdid the
decliners by a ratio of 2,657 to 518.
Meanwhile, record Black Friday
weekend shopping took retailers higher on Monday and also helped
the broader rally. Retail data and consulting firm ShopperTrak
confirmed a 6.6% hike in sales on Black Friday, reflecting a
significant increase in the number of shoppers going to the stores
or hitting the ‘buy’ button on retailer websites. According to The
National Retail Federation, a record breaking 226 million shoppers
hit stores and websites over the Black Friday weekend, jumping from
212 million last year. Major retailers reported a 16% spike in
sales figures over the weekend and companies like Macy's, Inc.
(NYSE:M), J. C. Penney Company, Inc. (NYSE:JCP), Costco Wholesale
Corporation (NASDAQ:COST), Best Buy Co. Inc. (NYSE:BBY), Limited
Brands, Inc. (NYSE:LTD) and Amazon.com Inc. (NASDAQ:AMZN) surged
4.7%, 1.6%, 1.7%, 3.4%, 3.9% and 6.4%, respectively.
Lingering European debt concerns
receded somewhat yesterday with positive reports about efforts to
find a solution to debt woes doing the rounds. An Italian newspaper
reported that the International Monetary Fund was considering
stepping in with a rescue fund for Italy, whose borrowing costs
crossed the highly unsustainable 7% level. However, chances of such
a development were washed away as IMF denied the report.
Separately, the finance ministers
of the troubled region were considering new measures to tackle the
debt situation. Some proposals went to the extent of suggesting
that nations give up budgetary controls to a central European body.
Also, it was suggested that nations such as Austria, France and
Germany sell bonds in cooperation to aid other ailing European
nations.
Investor sentiment was boosted by
rare positive developments from the European front and record
retail numbers. The financial sector was another major gainer
yesterday and Financial Select Sector SPDR (XLF) fund gained
roughly 3% with the KBW Bank Index (BKX) surging 2.7%. Stocks
including Bank of America Corporation (NYSE:BAC), The Goldman Sachs
Group, Inc. (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan Chase
& Co. (NYSE:JPM), Citigroup, Inc. (NYSE:C), Wells Fargo &
Company (NYSE:WFC) and U.S. Bancorp (NYSE:USB) jumped 1.6%, 2.3%,
4.1%, 2.4%, 6.0% and 2.7%, respectively.
However, there were impending
concerns that were not factored in yesterday as benchmarks chose to
change course after its considerable long-streak of losses. The
borrowing costs of European nations that include Italy, Spain,
France and Germany are riding an uptrend, which is not at all a
good sign for the economies. Italian 10-year yield is hovering
around the unsustainable 7% level and Spanish bonds are also in
close range. Also, the Organization for Economic Cooperation and
Development (OECD) said EU leaders’ failure to fix the debt woes
"could massively escalate economic disruption." The disruption
might lead to "highly devastating outcomes,” the OECD added.
Moody's Investors Service also echoed the warning saying the debt
crisis might "soon enter a phase that policy makers are unable to
control".
Meanwhile, after the closing bells,
Fitch Ratings lowered its outlook on the US credit rating and gave
a 2013 deadline for the US to ink a “credible plan" to counter its
incremental budget deficit. The rating agency kept the AAA credit
rating alive, but lowered its outlook to negative from stable
following the nation’s failure to arrive at a decision on the $1.2
trillion deficit-reduction plan. The rating agency stated: "The
negative outlook reflects Fitch's declining confidence that timely
fiscal measures necessary to place U.S. public finances on a
sustainable path and secure the U.S. AAA sovereign rating will be
forthcoming”.
AMAZON.COM INC (AMZN): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
BEST BUY (BBY): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
COSTCO WHOLE CP (COST): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
LIMITED BRANDS (LTD): Free Stock Analysis Report
MACYS INC (M): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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