Stock Market News for Jan 13, 2011 - Market News

Markets rose to fresh highs as bank stocks led the rally following optimistic earnings prospects and some upgrades. Benchmarks touched multi-year highs as concerns about the euro-zone debt crisis eased and the Federal Reserve released an upbeat report.

 

The Dow gained 0.7% and closed at 11,755.44, its highest level since August 11, 2008. The S&P 500 gained 0.9% to end the day at 1,285.96, its highest close since August 28, 2008. The tech-laden Nasdaq jumped 0.75% and closed at 2,737.33 to its highest close since November 7, 2007. The CBOE Volatility Index (VIX) remained below 17 as appetite for equities rose among investors. On the New York Stock Exchange, market breadth was on the positive side and about seven stocks rose for every three stocks that fell. On the consolidated NYSE, 4.1 billion shares changed hands.

 

The Federal Reserve's Beige Book, a compilation of anecdotal information from 12 Federal Reserve districts, gave an upbeat report and suggested that the economy is gradually improving and is en route to a position before the downfall. The report suggested economic activity expanded from November and through December as conditions improved in Philadelphia, Boston, New York, and Richmond Districts among other areas. Manufacturing, non-financial services sectors and retail also reportedly showed better scenarios in the districts. Retail sales during the 2010 holiday season was higher than the previous year and manufacturing activity surged in all districts. The report also painted a modestly bright picture about employment as all districts reported an increase in employment levels in some sectors.

 

On the international front, Portuguese government sold $1.6 billion worth of bonds. The bond auction eased investor fears and Portugal Prime Minister Jose Socrates confirmed after the auction that Lisbon will not require any external aid. Meanwhile, the strong response to the bond auction in Portugal suggests that investors were picking up riskier assets. It is also believed that the European Union's rescue fund might be boosted by the EU's finance ministers.

 

On a sectoral basis financial stocks led the rally. Stocks such as JP Morgan JPM, Bank of America BAC, and Morgan Stanley MS each jumped more than 2% while Goldman Sachs GS was up 1.4%. Shares of Citigroup C jumped 2.8% to close above $5 for the first time since August 2009. JP Morgan is slotted to kick-off the fourth quarter earnings season for major banks on Friday. American International Group AIG slipped 1.08% after it accepted the $2.16 billion offer for its Taiwan Nan Shan Life unit from a syndicate which was led by local conglomerate Ruentex Group. Analysts at Wells Fargo WFC upgraded its sector rating to “overweight” from “market weight” and estimated a 59% earnings growth for banks in 2011.

 

Shifting the focus to tech stocks, shares of Nvidia NVDA surged 15% on positive evaluation of its recent endeavors. Over the past three months the stock has gained about 112%. Security software company Symantec Corp. SYMC jumped 3.2% after was upgraded by Citigroup. NetApp Inc. NTAP gained 1.12% after the data storage systems maker agreed to buy Akorri Networks Inc, a privately owned data center management software company.

On to news on estimates and earnings, tech-giant Intel INTC was up 1.2% ahead of its earnings release slated on Thursday. Meanwhile, Deutsche Bank DB cut its rating on the semiconductor sector to “equalweight”. St. Jude STJ was up 1.9% after the company estimated its fourth quarter sales to reach $1.35 billion ahead of expectations of $1.29 billion. St. Jude is expected to release fourth-quarter earnings on January 26.

 
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