The markets closed with modest gains, yesterday, drifting away from any further late-day sell-off that had affected stocks in the last few days. The indices ended on a winning side, helped by positive economic data and higher profit outlook from package shipper FedEx Corporation FDX.
The Dow Jones Industrial Average rose 0.4% to close at 11,499.25, a new high for the year. The S&P 500 was up 0.6 % to 1,242.87, also a new peak for the year. The Nasdaq also gained 0.8% to close at 2,637.31. The CBOE Volatility Index (VIX) fell below 18. On the New York Stock Exchange, advancing stocks outnumbered the declining ones in the ratio of 2:1 on a consolidated volume of 4.4 billion shares.
The gain in the markets was a result of few factors. One such factor was FedEx's outlook. Though FedEx's quarter report missed the estimates, it raised its full-year outlook, partially encouraging the industrials. The bellwether's positive outlook provided optimism among traders and reflected a somewhat improving economy. FedEx reported record volume in international business in its second quarter. FedEx shares gained 2% to $94.22 and the Dow Jones Transportation Average moved up 1.3%.
Also helping the indices were reports from the Labor Department, the Federal Reserve of Philadelphia and the Commerce Department. According to the Labor Department, first-time unemployment benefit claims fell to 420,000, last week. In four weeks, it was the third drop and the four-week average of claims has hit its lowest level since July 2008. The Federal Reserve of Philadelphia reported an unexpected rise in factory activity. Its' index of general business activity reached the best monthly reading ever, since April 2005. The Commerce Department reported rise in housing starts, after it declined for two months, and it helped build optimism about the economy.
However, on the international front, Spain was forced to pay higher yields to sell government bonds, once again. In the interim, leaders of the European Union are to meet for a two-day summit and discuss methods of preventing any further euro-zone debt crisis.
Also in news were card processing firms, such as MasterCard MA and Visa V, they both plunged more than 10% after a news that the Federal Reserve plans to alter debit card transaction fees that could affect these card processing companies adversely. The plan included an option of a 12 cent cap on debit card fees.
APPLE INC (AAPL): Free Stock Analysis Report
FEDEX CORP (FDX): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
MASTERCARD INC (MA): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
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