Stock Market News for December 10, 2014 – Zacks Investment …

Stock Market News for December 10, 2014 – Zacks Investment …

Benchmarks ended Tuesday’s trading session on a mixed note as investors remained concerned about the global economy and political turmoil in Greece. People’s Bank of China’s move to tighten rules on loans and unexpected declaration of presidential elections in Greece dented investor sentiment. However, the S&P 500 and Dow erased much of the initial losses, banking on a rally in energy and technology stocks. The Nasdaq was able to finish in positive territory boosted by gains in bio-tech stocks.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) declined 0.3% to close at 17,801.20. The Standard & Poor 500 (S&P 500) decreased a meager 0.02% to close at 2,059.82. The tech-laden Nasdaq Composite Index closed at 4,766.47; gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) climbed 4.8% to settle at 14.89. A total of about 7.3 billion shares were traded on Tuesday, more than month-to-date average of 6.5 billion. Advancers outpaced declining stocks on the NYSE. For 58% stocks that advanced, 39% declined.

Investors were concerned about economic weakness in China. The country’s benchmark Shanghai Composite Index tumbled 5.4%, its biggest one-day percentage decline since Aug 2009. The index plunged after the People’s Bank of China tightened lending rules. China’s stocks took a beating after the regulator restricted investors from using low-grade corporate debt as security to raise cash. The USD/CNY exchange rate was also fixed by the central bank at its highest level since July. These measures followed China’s discouraging trade numbers. China’s imports had dropped 6.7% in November from the year-ago period. Exports increased 4.7% in November, much less than October’s rise of 11.6%.

News from Europe also unnerved investors. Greece’s ASE Index plunged 12.8% after Prime Minister Antonis Samaras declared presidential election. This move came in after the country was given an additional two months to fulfill its bailout obligations. Moreover, early signs of elections had investors believing that the Radical Left (Syriza) might come to power. This added to investor concerns.

Separately, Germany’s November import figures declined 3.1%. The trade figure came in after Germany’s industrial output increased at a slower pace than expected.

However, gains among energy shares helped benchmarks recover much of the losses. Energy shares recovered after oil prices bounced back from a five-year low. The West Texas Intermediate (WTI) crude oil price gained 1.2% to settle at $63.82 per barrel. Additionally, price of Brent crude oil increased almost 1% to settle at $66.84 per barrel.

The Energy Select Sector SPDR (XLE) advanced 1.1%. The sector was the biggest gainer among the S&P 500 sectors. Shares of key energy stocks including Chevron Corporation (CVXAnalyst Report), Schlumberger Limited (SLBAnalyst Report), EOG Resources, Inc. (EOGAnalyst Report), Kinder Morgan, Inc. (KMIAnalyst Report) and Occidental Petroleum Corporation (OXYAnalyst Report) increased 0.2%, 1.5%, 1.1%, 2% and 1.8%, respectively.

Gains among tech-bellwethers also boosted markets. Key stocks from the technology sector such as Apple Inc. (AAPLAnalyst Report), Google Inc. (GOOGLAnalyst Report) and Oracle Corporation (ORCLAnalyst Report) gained 1.5%, 1% and 1.2%, respectively. High-beta stocks such as bio-tech shares too advanced on Tuesday. Rally in bio-tech shares helped the Nasdaq settle in the positive territory. Shares of bio-tech companies such as Vertex Pharmaceuticals Incorporated (VRTXAnalyst Report), Celgene Corporation (CELGAnalyst Report) and Biogen Idec Inc. (BIIBAnalyst Report) increased 0.8%, 0.4% and 1%, respectively.

On the other hand, airline companies showed broad weakness. Shares of Spirit Airlines, Inc. (SAVESnapshot Report) nosedived 12.7% after the company released disappointing guidelines. Other airline companies such as Delta Air Lines Inc. (DAL), United Continental Holdings, Inc. (UAL), American Airlines Group Inc. (AAL), The Boeing Company (BA) and Southwest Airlines Co. (LUV) too decreased 2.1%, 2.7%, 4.9%, 0.5% and 3.2%, respectively.

Meanwhile, telecom stocks weighed on the Dow. Shares of Verizon Communications Inc. (VZ) declined 4.1% after the wireless carrier announced that its fourth-quarter profit might get hampered due to higher promotional expenses and price cuts. Another Dow component and telecom company, AT&T, Inc. (T) also decreased 2.9%

Separately, Merck & Co. Inc. (MRK) also weighed on the Dow. Shares of the drug maker dropped 3% after the company declared that it will acquire antibiotics specialist Cubist Pharmaceuticals Inc. (CBST) for $8.4 billion. The company said it will go ahead with the deal despite facing criticism that it is overpaying and that this might hurt the sales potential of the company.

Tuesday’s economic reports were limited to US wholesale inventories data. The U.S. Department of Commerce announced that the US wholesale inventories rose 0.4% in October after increasing 0.4% in September. This rise in wholesale inventories in October was more than the consensus estimate of a rise by 0.2%.

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Stock Market News for December 10, 2014 – Zacks Investment …

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