Stock Market News for Feb 25, 2011 - Market News

Crude prices eased off their high by a couple of dollars as rumors circulated that Libyan leader Moammar Gaddafi had been shot. US officials denied such reports and the markets showed a marginal improvement after closing mixed on Thursday. Though benchmarks Dow and S&P500 continued to remain in the red, the Nasdaq gained marginal momentum relying on the upward movement of tech stocks. Tension in Libya continued, providing no respite to the economic world. Meanwhile fresh US economic data came in, showing both positive and negative trends.

The markets closed mixed as the tech-laden Nasdaq moved up while the Dow and S&P500 still waited to end in the green. The Dow Jones Industrial Average (DJIA) shed 0.3% to close at 12, 068.50 and the S&P 500 declined 0.1% to end the day at 1, 306.10. The Nasdaq moved up 0.5% and closed at 2, 737.90. The fear gauge CBOE Volatility Index (VIX) lost the upward streak of the last two seasons to fall more than 4% and was below 21.

Oil prices fell from their perch as traders dwelled on rumors that Gaddafi was shot. However, US officials refused to confirm such an incident and said there was no reason to believe that Gaddafi is dead or even injured. Gaddafi was slated to appear on television, yet again, and according to reports he blamed the Al-Qaeda and Osama Bin Laden to have misguided the youth to revolt. He also accused them of manipulating youth with drugs and alcohol.

Amidst accusations and rumors, violence still continued in Libya as anti-government demonstrators appear to have taken over power in most parts of the eastern region. Gaddafi loyalists also carried on their clash against protestors in the Libyan capital Tripoli, leading to the deaths of more than a thousand people till date.

Meanwhile, Saudi Arabia was in talks with European refineries to fulfill any shortfall of oil that the Libyan crisis has created.The move suggested that serious concerns abounded about a shortfall in supply and this is a much needed step which could curb rising crude prices.

Energy stocks which had been climbing up for the past two days, dropped after a decline in crude prices. Shares of energy stocks like Halliburton Company (NYSE:HAL), Schlumberger Limited (NYSE:SLB) and Transocean Ltd. (NYSE:RIG), were among the top laggards.

On the domestic side, initial jobless claims fell more than expected suggesting a slowly improving labor market. New applications for jobless benefits fell by 22,000 to 391,000 and in the last four weeks an average of 402,000 people applied for jobless benefits. According to the Labor Department, this average is at its lowest level since July 2008.

On the other hand, durable goods orders surged 2.7% in January after declining three consecutive times. But the rise was driven mostly by an increase in demand for commercial airplanes. Excluding the orders for aircraft, new orders for non-defense capital goods plunged 6.9% in January 2011. In other news, a report from the Commerce Department said sales of new US homes declined in January and were below economists’ expectations. Sales declined 12.6% to a seasonally-adjusted annual rate of 284,000, below expectations of 300,000.

It was technology stocks that provided some composure to the markets and helped the Nasdaq to emerge as the only gainer amongst benchmark indices. Despite Hewlett-Packard Company (NYSE:HPQ) losing 3.3%, after reports of heavy losses, other tech stocks made gains, with Advanced Micro Devices, Inc. (NYSE:AMD) increasing 6.4%. Priceline.com Incorporated (NASDAQ:PCLN) soared 8.5% and WebMD Health Corp. (NASDAQ:WBMD) was up 8.7%. However, many major tech stocks declined, with Cisco Systems, Inc. (NASDAQ:CSCO), falling 0.2%, Google Inc. (NASDAQ:GOOG), shedding 0.4% and Yahoo! Inc. (NASDAQ:YHOO) dropping 1.3%.

Stock Market News for Feb 25, 2011 – Market News

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