On Friday, the tax package, which had been in news for past couple of weeks and often swayed the markets, was finally signed by the US President. However, markets closed ahead of the tax bill being turned into law and the indices ended almost flat. In addition, there were positive signs for the economy from Conference Board statements. But, the Euro-zone debt concern kept the investors jittery and avoided the markets to gain significantly.
The Dow Jones Industrial Average was down 0.06% to close at 11,491. The S&P 500 rose 0.08% to 1,243 and the tech-heavy Nasdaq was up 0.21%, to close at 2,642. The CBOE Volatility Index (VIX) fell more than 7% to remain just above 16, reflecting a rise in investor confidence. On the New York Stock Exchange, rising stocks marginally edged above the falling ones with a consolidated volume of 5.4 billion shares.
US President Barack Obama signed the tax package which extends the Bush-era tax cuts for another two years. The $850 billion package was however opposed by some Democrats. Also helping the optimism about the economy was the news from the Conference Board. The Board's index of leading economic indicator climbed up 1.1% in November, signaling a somewhat improving economy. The index used to track data, including orders for new goods and materials, recorded the highest rate of increase in eight months. The index also registered 9 of its 10 component indicators moving up. While the most positive contribution was from supply deliveries index, building permits index was the only laggard.
However, the optimism in the domestic front was fairly subdued as the euro-zone debt crisis worries lingered on. Moody's Investors Service downgraded Ireland's government-bond rating and cited the nation to have a weak economic outlook.
On a sectoral basis, technology gained some momentum by strong earnings report from key tech stocks, including Oracle ORCL, which jumped 3.94% on strong quarterly results. Also, eight brokerages raised their ratings and price targets for the stock. Research In Motion RIMM edged up 1.62% after the BlackBerry maker announced better-than-expected sales and profit. Take-Two Interactive TTWO surged 8.29% after the videogame publisher reported strong results primarily due to the increase in the sales of NBA 2K11, a sports game. Accenture ACN sprung 7.82% after reporting a 20% gain in earnings due to rising revenue. The company also raised its current year and quarterly outlook.
Now coming to some individual stocks that were in news were automaker General Motors GM, which rose 1.16% despite it recalling about 111,000 vehicles due to faulty seatbelt buckle. Shares of Marshall & Ilsley Corporation MI soared 18.31% after BMO Financial group BMO announced that it would acquire M&I for $4.1 billion in a stock-for-stock deal. Each share of M&I would be swapped for 0.1257 of a share of BMO. Shares of BMO dropped 7.14% after the announcement.
ACCENTURE PLC (ACN): Free Stock Analysis Report
BANK MONTREAL (BMO): Free Stock Analysis Report
MARSHALL&ILSLEY (MI): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
TAKE-TWO INTER (TTWO): Free Stock Analysis Report
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