Stock Market News for December 11, 2009 - Market News
US stocks rose for a second day on Wednesday as a decline in October trade deficit and signs of revival in the job market boosted confidence that an economic recovery is indeed underway. Although the Labor Department said weekly jobless claims rose more than expected, the average number of Americans filing for jobless benefits fell to a one-year low. Retail and consumer stocks gained, encouraged by the jobs report.
Stocks also got a fillip after a separate report showed October trade deficit declined 7.6% to $32.9 billion, as a weak dollar helped boost US exports. Exports grew a healthy 2.6%, while imports increased only 0.4%. Although trading remained thin, gains were broad based, with 24 of 30 Dow stocks recording gains, led by commodities and consumer-related companies. Those ending the day in the green included Alcoa (NYSE:AA), Chevron (NYSE:CVX), Walt Disney (NYSE:DIS), Johnson & Johnson (NYSE:JNJ) and Wal-Mart Stores (NYSE:WMT).
The Dow Jones industrial average rose 69 points, or 0.7%. The S&P 500 index advanced 6 points, or 0.6%. The tech-heavy Nasdaq composite added 7 points, or 0.3%. On the New York Stock Exchange, advancing shares beat those that declined three to two on volume of 1.06 billion shares.
Financial were out of favour yesterday, closing down 0.1% on the day. Citigroup (NYSE:C) shares meanwhile gained 0.3% after Deutsche Bank (NYSE:DB) restated a "buy" rating, noting its plans to raise capital to repay TARP borrowings would help earnings over the near-term on the savings from elimination of dividend payments to the US, which would outweigh the dilutive impact of the offering.
The Vix volatility measure of investors' quotient of nervousness eased Thursday, dropping 1.5% to 22.32. As it did, the safe haven status of the US Treasuries declined against the appeal of higher returns from riskier investments, with the 10-year falling 18/32 in price and its yield rising to 3.501%. Treasury's auction of 30-year bonds, which completed its $74.0 billion auction schedule on the week, drew a bid-to-cover ratio of 2.45, inline with the recent 2.41 average on increased demand.
Of the ten S&P500 industry sectors, eight recorded gains, led by consumer services (+1.2%), utilities (+1.2%), health care (+1.1%), and oil and gas (+1.0).
Yesterday the US dollar gained 0.04% against a basket of currencies, rising to 76. Alcoa (NYSE:AA) led the gainers on the DJIA, up 3.2% during the session, on reports aluminium prices would rise due to supply disruptions in Europe. Disney (NYSE:DIS) jumped 3.1% on a Sanford Bernstein report which advised a 2010 share buyback increase to 58.5 million shares likely as the firm lifted earnings for 2009 and 2010 as well as price targets for the mouse.
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