Stock Market News for March 25, 2011 - Market News

Expectations of strong corporate results and encouraging domestic data helped the benchmarks move modestly higher on Thursday. Investors zoomed in on the events at home and shrugged off global concerns that had previously caused much damage to the indices. Technology and retailers led the gains and the S&P 500 rose above its 50 day moving average.

The fear gauge CBOE Volatility Index (VIX) dropped over 6% to settle at 18. The Dow Jones Industrial Average gained 0.7% and finished at 12,170.56. The Dow recorded its biggest 6 day percentage gain since July 14, 2010 after gaining 4.8% in the last 6 trading days. Considering the volatility and the global concerns that weighed on the markets, this is a significant positive performance by the Dow. The S&P 500 was back above its 50-day moving average and gained 0.9%, on Thursday, to close at 1,309.66. Noting the strong performance of the tech-sectors, the tech-laden Nasdaq surged 1.4% and finished off at 2,736.42.

However, it was another day of tight volumes and only 870 million shares changed hands on the New York Stock Exchange (NYSE). The consolidated volumes on NYSE were a mere 3.9 billion shares and for every two shares that advanced, one was on the declining side. The light volumes might be suggestive of the existing resilience in the markets. As the earnings season still has over two weeks to go, investors may be adopting a wait and watch attitude. Investors lack any compelling reason to buy or sell at the moment and they are still somewhat worried about the volatility in the markets arising out of persistent global concerns.

Unrest in the Middle East and the crisis in Japan have robbed investors of cheer for quite some time. Thursday was no different in context of negative global incidents, but this time investors chose to shrug the concerns away.

Tension in Libya continued and as international military coalition forces continue their fight against the Libyan leader Muammar Gaddafi, he, in return, has vowed to wage a ‘long war’. Crude prices have sky-rocketed due to the turmoil and with the nuclear crisis in Japan, energy demand will gain higher momentum. The demand and supply dynamics of crude is of particular concerns and as air-planes poured down more missiles on Libya, crude prices for April delivery hovered near to $106 per barrel. The oil indexes in the NYSE including NYSE Arca Oil Index, NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index gained 0.5%, 0.7% and 0.5%, respectively. There is no further news of developments in the stabilization of the nuclear crisis in Japan and it is certain that Japan is in high need of energy resources as its nuclear plants suffer a huge fall in energy production. Energy shares have made the most of the opportunity and related indexes have been the major gainers. Shares of Exxon Mobil Corp. (NYSE:XOM), ConocoPhillips (NYSE:COP), Transocean Ltd. (NYSE:RIG) and National Oilwell Varco, Inc. (NYSE:NOV) gained 0.2%, 1.5%, 0.3% and 0.8%, respectively.

In other global news, a day after Portugal’s prime minister resigned from office over the nation’s parliament rejecting an austerity drive, it was reported that borrowing costs of Portugal had hit record levels. Portugal has likely been forced into a situation to seek an international bail-out package and yet again the issue brings into focus the euro debt problems. However, all these global concerns failed to affect the US markets and it is likely that the concerns are already valued in and the markets have become accustomed to them.

Investors’ cheer was largely driven by domestic news and they were greeted by reports of fall in jobless claims. According to the Labor Department, initial claims for the unemployment benefits fell by 5,000 last week to 382,000 and suggested an improving economy. The data was also better than the expected figure of 384,000. Showing signs of improvement, the average number of jobless claims over the past 4 weeks is now down to its lowest level since July 2008. However, a tinge of negative sentiment hovered as the durable goods report came in weaker than expected. According to the Commerce Department, durable goods orders dropped 0.9% last month contradicting economists’ expectation of an upward trend. In January, durable orders saw an upward movement of 3.6%.

The day’s gains were largely attributable to the gains by the technology sector. The technology sector surged by 1.3% and the S&P 500 technology index gained 1.6% on Thursday. Shares of Red Hat, Inc. (NYSE:RHT) gained 18.2% as the company reported better than expected revenues of $244.8 million for the quarter. Strong quarter results also took the shares of Micron Technology Inc. (NASDAQ:MU) higher by 8.4% and NVIDIA Corporation (NASDAQ:NVDA) also surged 8.0%. Among other tech stocks in the Nasdaq, Autodesk, Inc. (NASDAQ:ADSK), Seagate Technology PLC (NASDAQ:STX) and Cognizant Technology Solutions Corp. (NASDAQ:CTSH) gained 5.3%, 4.3% and 3.8%, respectively.

In the retail sector, shares of Drugstore.com Inc. (NASDAQ:DSCM) sky-rocketed by 113.1% as Walgreen Co. (NYSE:WAG) said it will buy the online retailer. Shares of GameStop Corp. (NYSE:GME) surged 2.9% as it reported in-line results, but stocks of Best Buy Co. Inc. (NYSE:BBY) plunged 5.4% as it reported a 16% fall in its profit in the fourth quarter.

Stock Market News for March 25, 2011 – Market News

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