Stock Market News for March 4, 2011 - Market News

On Thursday, a daylong rally ensured the markets ended in the green. Buoyed by positive jobs data and modestly lesser crude price, investors enjoyed an optimistic trading session. Both technology and financial stocks moved higher with stocks from each of these sectors helping the blue-chip index post its highest gain in three months.

The Dow Jones Industrial Average (DJIA) soared 191.40 points or 1.6% to end at 12,258.20 and recorded its biggest gain since December 1, 2010. The Standard & Poor 500 closed at 1,330.97 after gaining 1.7% while the tech-laden Nasdaq increased 1.8% to finish the day at 2,798.74. The CBOE Volatility Index (VIX) plunged 10% to less than 19 with advancers outnumbering decliners by 5 to 1 on the New York Stock Exchange (NYSE). Consolidated volumes were at 4.5 billion shares.

Indices were pushed higher largely due to news of a substantial decline in first-time unemployment benefit claims. The Labor Department reported that initial jobless claims have gone down by 20,000 to 368,000, the lowest level since May 2008, against expectations of an increase to 398,000 claims. The four week average for applications also fell to its lowest level since July 2008 and is at 388,500. This report comes a day after Automatic Data Processing reported a surge in job hiring which was also above expectations. In other news, the Institute for Supply Management added to the cheer after it reported that its index of non-manufacturing activity increased 59.7% in February from 54.9% last month.

Meanwhile, The United Nations Food and Agriculture Organization’s food index reflected 2.2% global food inflation in February. Fed Chairman Ben Bernanke has nonetheless assured that inflation is not a threat to the US economy as of now.

Rising crude prices, an outcome of unrest in the Middle East, have ignited global concerns and dampened markets on certain days. Anti-government protests to dethrone Muammar Gaddafi have been on the rise in Libya, a country which accounts for 2% of the global daily oil output. However, an offer of peace talks by Venezuelan President Hugo Chavez eased the spike marginally and provided relief to traders. The indices also gained some ground following a slowdown in surging crude prices as U.S. light, sweet crude for April delivery shed 32 cents to $101.91 per barrel.

An international mediation commission is expected to resolve the uprising in Libya and Chavez hopes Luiz Inacio Lula da Silva, former president of Brazil, will head the commission. Andres Izarra, the information minister of Venezuela, confirmed that the foreign minister has spoken with his Libyan counterpart and Gaddafi has accepted the offer of peace talks. Arab League chief Amr Moussa said the offer for peace talks was under consideration. However, chairman of the rebel National Libyan Council, Mustafa Abdel Jalil, declined to participate until Gaddafi’s resignation or exile.

Even amidst expectations of peace talks, tensions continued in Libya as a strong military presence was noted outside the oil-rich rebel-held city of Zawiya. A day before, Gaddafi loyalists had launched their first-ever attack on a rebel-held city as they carried out air-strikes and land attacks in Brega, another oil-rich Libyan city.

US President Barack Obama sent across strong words and said Gaddafi had lost his legitimacy to rule Libya. Obama said the US was outraged at the violence in Libya and is deliberating with its allies as to how to control the violence. He also said that though the US is sending humanitarian aid to the Libyan border, sanctions are in progress to hold Gaddafi and Libyan leaders accountable for the unrest.

On a segment-wise basis, technology stocks surged, led by Intel Corporation (NASDAQ:INTC) and International Business Machines Corp. (NYSE:IBM). These stocks moved up 1.4% and 2.1%, respectively, and joined the league of top advancers in the blue-chip index. Among other tech stocks, Apple Inc. (NASDAQ:AAPL) jumped 2.1%, Dell Inc. (NASDAQ:DELL) gained 1.9%, Oracle Corp. (NASADQ:ORCL) surged 2.8% and Google Inc. (NASDAQ:GOOG) advanced 1.5% while Microsoft Corporation (NASDAQ:MSFT) ended 0.5% higher.

The financial sector also shared the gains, led by KeyCorp (NYSE:KEY), which jumped 3.3%. Other gainers for the day include Bank of America Corporation (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM) and The Goldman Sachs Group, Inc. (NYSE:GS) which increased by 3.2%, 1.9%, and 1.7%, respectively.

Coming to the retail sector, sales at department stores reported strong growth for February. Macy’s, Inc. (NYSE:M), J. C. Penney Company, Inc. (NYSE:JCP) and Saks Incorporated all managed to beat expectations. However, the decliners include Target Corp. (NYSE:TGT) down 0.4% and Gap Inc. (NYSE:GPS) which shed 1.9%.

Stock Market News for March 4, 2011 – Market News

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