Stock Market News for December 24, 2013 – Zacks Investment …

Stock Market News for December 24, 2013 – Zacks Investment …

The Christmas week started on a positive note as the Dow and S&P 500 hit all-time highs buoyed by news of a key deal involving Apple and consumer sentiment reaching a five-month peak. The all-day bullish sentiment was also aided by indications from IMF that it would upgrade the U.S.’s economic outlook. The tech-laden Nasdaq also listed itself in the record book as it closed at its highest level since Aug 2000. The technology sector emerged the leading gainer among the S&P industry groups.

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The Dow Jones Industrial Average jumped 0.5% to end yesterday’s trading session at 16,294.61. The Standard & Poor 500 (S&P 500) too added 0.5% to reach 1,827.99. The Nasdaq composite index closed at 4,148.90, a decent 1.1% jump. In its second consecutive drop, the fear-gauge CBOE Volatility Index shed 5.4% to 13.04 on Monday. About 4.68 billion shares changed hands on the nation’s exchanges, significantly lower than this month’s average of 6.49 billion. On a day of records, the advancers obviously outpaced the decliners with 69% stocks jumping on NYSE.

Both the Dow and S&P 500 rose to all-time highs yesterday. These benchmarks have achieved such feats on several occasions through the year. The Dow has gained 24.3% this year, while S&P 500 has added 28.2% over the same time frame. The Nasdaq has outperformed the other two, gaining 37.4% in 2013.

The Nasdaq also outperformed the benchmarks yesterday, largely riding on surging Apple Inc. (NASDAQ:AAPL) stocks. Tech-heavyweight Apple gained 3.8% yesterday after the iPhone maker announced a key deal with China Mobile Limited (NYSE:CHL). The deal enables Apple to sell its iPhone through China Mobile, who has the largest network of mobile phone customers.

Apple also helped S&P 500 to surge, as did Facebook, Inc. (NASDAQ:FB) on its first day of trading as a S&P 500 component. Facebook shares jumped 4.8% to $57.77. Facebook also clinched a record intra-day high of $58.32 during yesterday’s trading session.

The technology sector was a big gainer yesterday and the Technology Select Sector SPDR (XLK) jumped 1.3%. Looking at other tech bellwethers, Google Inc. (NASDAQ:GOOG), International Business Machines Corporation (NYSE:IBM), Intel Corporation (NASDAQ:INTC), Oracle Corporation (NYSE:ORCL) and Cisco Systems, Inc. (NASDAQ:CSCO) gained 1.3%, 1.2%, 1.1%, 1.5% and 2.1%, respectively.

Among the economic data, both consumer sentiment and spending climbed to a five-month high. The Thomson Reuters/University of Michigan noted the final reading of consumer sentiment index to have touched 82.5 in October, up from 75.1 last month. Also, the Bureau of Economic Analysis reported personal consumption expenditures (PCE) to have moved up 0.5% in November, as against a 0.4% gain in October.

Also helping the benchmarks move higher yesterday was an indication from the International Monetary Fund that it would upgrade the U.S. economy outoook. Christine Lagarde, managing director of IMF, said in an exclusive interview: “Good action has been taken by the Congress to eliminate fear about the Budget. Fed has also taken some very well communicated action concerning the tapering. In addition to which, we see some good numbers. All of that gives us a much stronger outlook for 2014, which brings us to raising our forecast”.

This takes us to last week’s major development, namely the Federal Reserve announcing a cut in its $85 billion bond buying program. The central bank announced that it will reduce bond repurchases by $10 billion, bringing its monetary stimulus to $75 billion a month from Jan 2014. At the same time, the Fed also indicated that the key interest rate would continue to remain at a record low for a longer period than what was promised previously.

Federal Reserve Chairman Ben Bernanke said the central bank would introduce similar steps in its upcoming Federal Open Market Committee meetings. Bernanke said such reductions would continue if economic data continued to remain positive. He said the Fed would continue to maintain low borrowing rates in order to increase spending and propel growth. At the same time, such moves were aimed at pushing up the low level of inflation, he added.

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Stock Market News for December 24, 2013 – Zacks Investment …

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