Stock Market News for August 27, 2010 - Market News

Stocks failed to hold on to Wednesday’s gains and fell broadly as economic uncertainties left investors with little choice but to sell stocks. A better-than-anticipated drop in initial jobless helped stocks initially, but worries intensified as the session wore on and stocks fell. The Dow average fell below the psychologically important 10,000 mark for the first time since July 6.

The 30-share Dow industrials closed with a drop of 74 points after an initial 45-point rally. The tech-heavy Nasdaq dropped more than 1% to 2118.69 and the broader S&P 500 index closed with a loss of 0.8%. On the New York Stock Exchange, two stocks fell for every one that rose. Some big technology names were among the biggest losers, with Intel INTC dropping 1.6% to $18.18 and Cisco Systems CSCO falling 2.4%. Shares in IBM IBM fell 2%.      

This morning a Commerce Department report said the economy grew at a better-than-expected 1.6% pace in the April-to-June quarter, well below the first quarter’s 3.7% growth. Most economists believe 2.5% GDP growth rate is necessary to keep unemployment from worsening. Markets are also likely to stay glued to Federal Reserve Chairman Ben Bernanke who speaks at an event in Wyoming. With little room left on the interest rates front, it will be interesting to see what the Fed chairman has on offer to soothe economy-related concerns.

The GDP report has pushed up stock futures. Ahead of the opening bell, the Dow average futures are trading up 0.7%, Standard & Poor's 500 futures are up 0.8% and Nasdaq 100 futures are up 0.9%.

Meanwhile, Dell DELL revised its offer for 3Par PAR to $24.30 per share, or $1.6 billion, which was accepted by the data storage company. However, after the close, Hewlett-Packard HPQ chose to continue the bidding war for 3Par, sweetening its own bid for the company to $27 per share.

In another deal news, Cisco Systems CSCO announced its intent to acquire privately held ExtendMedia which makes software for managing online video content. However, Cisco did not reveal the financial aspects of the deal. 

All ten S&P 500 industry sectors closed with losses on the day, with techs falling 1.1%, oil and gas 0.9%, health care 0.9%, financials 0.9%, consumer services 0.8%, consumer goods 0.7%, telecommunications 0.5%, utilities 0.5%, industrials 0.4%, and basic materials 0.1%.

Risk-aversion saw US Treasuries gaining in price, with the price on 10-years up 17/32 and its yield off to 2.481% after an auction of $29 billion 7-years saw a yield of 1.989% and a bid-to-cover ratio of 2.98%.

 
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