Stock Market News for June 13, 2012 - Market News
June 13 2012 - 5:06AM
Zacks
Investors grew hopeful once again
about fresh economic stimulus after Chicago Federal Reserve Bank
President Charles Evans spoke in support of such a move, helping
markets to end significantly higher. Yesterday’s strong rally
washed out all of Monday’s losses with financial and material
stocks gaining the most. Investors also focused on domestic
developments and ignored Fitch Ratings downgrade of 18 Spanish
banks.
The Dow Jones Industrial Average
(DJI) jumped a robust 1.3% or 162.57 points to close at 12,573.80.
The Standard & Poor 500 (S&P 500) gained 1.2% and finished
yesterday’s trading session at 1,324.18. The tech-laden Nasdaq
Composite Index surged 1.2%, ending 33.34 points higher at
2,843.07. The fear-gauge CBOE Volatility Index (VIX) declined 6.2%
and settled at 22.09. Total volumes on the New York Stock Exchange
were 3.45 volume shares, and the advancers far outnumbered the
declining stocks. On the NYSE, for 76% stocks that jumped, 21%
stocks closed lower.
The robust gains washed out all of
the losses the markets endured on Monday, a day which was once
again dominated by European financial worries. On Monday, investors
were apprehensive about how far the bailout would go to solve the
lingering financial woes of the region. Market experts opined that
fundamental concerns were still not being addressed. Thus,
widespread concerns dented the benchmarks on Monday. However, while
these worries spilled over on to Tuesday, they were restricted only
to the European frontier and markets there had a gloomy day.
Also, the European markets had to
come to terms with Fitch Ratings downgrading 18 Spanish banks.
Bankia, one of the largest lenders of the nation, was also one
among the 18 banks to be downgraded and its long-term issuer
default rating dropped from BBB+ to BBB. The downgrade, according
to Fitch, was due to “concerns about the potential for the loan
portfolios of certain banks to deteriorate further”. Rising fears
in the nation also pushed up Spain’s borrowing cost to a record
high. The 10-year Spanish bond yield touched a high of 6.83% before
moving down marginally. The bond-yields were at its highest level
since Spain entered the euro.
However, investors on the home
front had reasons for cheer and they completely shrugged off
cross-Atlantic concerns. Chicago Federal Reserve Bank President
Charles Evans told a media house that he supports actions to
accelerate jobs growth. Evans once again spurred hopes of the
central bank proving fresh economic stimulus after he said: "More
asset purchases would be useful. More mortgage-backed securities
purchases would be good". The Federal Open Market Committee policy
makers are set to meet next week and Evans’ comments ahead of that
was what investors chose to focus on. He made the case for such
action stronger by saying: "It's currently going to take longer
than anybody would like. If we had more aggressive monetary policy,
it would happen sooner". He is one among the few so far to be vocal
about renewed stimulus, hopes of which have consistently been
dashed by the central bank so far.
With hopes rising once again about
fresh economic measures, benchmarks rallied strongly and the
financial and materials sectors emerged as strong winners. The
Financial Select Sector SPDR (XLF) jumped 1.6% and the Materials
Select Sector SPDR (XLB) gained 1.9%. Looking first at the
financial stocks, American Express Company (NYSE:AXP), Bank of
America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), JPMorgan Chase
& Co. (NYSE:JPM), Morgan Stanley (NYSE:MS) and U.S. Bancorp
(NYSE:USB) gained 2.5%, 2.9%, 4.3%, 2.9%, 4.2% and 2.5%,
respectively.
As for the material stocks, E I Du
Pont De Nemours And Co (NYSE:DD), PPG Industries, Inc. (NYSE:PPG),
Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), Southern Copper
Corp (NYSE:SCCO) and HudBay Minerals Inc (NYSE:HBM) jumped 2.5%,
2.2%, 1.9%, 1.0% and 3.4%, respectively.
AMER EXPRESS CO (AXP): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis Report
FREEPT MC COP-B (FCX): Free Stock Analysis Report
HUDBAY MINERALS (HBM): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
SOUTHERN COPPER (SCCO): Free Stock Analysis Report
US BANCORP (USB): Free Stock Analysis Report
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