Stock Market News for June 8, 2012 - Market News
08 6월 2012 - 6:06PM
Zacks
Fed Chairman Ben Bernanke once
again dashed hopes of further economic stimulus and an early rally
faded to leave the Dow only slightly higher, while the S&P 500
and Nasdaq closed in the red. Bernanke’s congressional testimony
also curbed the optimism that was sparked by China’s interest rate
cut. Markets had been buoyed by the first drop in initial claims in
almost a month, before Bernanke’s comments somewhat dented
sentiment.
The Dow Jones Industrial Average
(DJI) ended 0.4% higher at 12,460.96. The Standard & Poor 500
(S&P 500) edged down marginally, by 0.01% to close almost
unchanged at 1,314.99. The tech-laden Nasdaq Composite Index
dropped 0.5% to finish yesterday’s trading session at 2,831.02. The
fear-gauge CBOE Volatility Index (VIX) dropped almost 2.0% to
settle at 21.72. Consolidated volumes on the New York Stock
Exchange, the Nasdaq and the American Stock Exchange were roughly
7.16 billion shares, higher than the year-to-date daily average of
6.85 billion shares. Decliners enjoyed a better run than the
advancing stocks on the NYSE; as for 53% of stocks that traded
lower, 44% moved up.
Markets had opened decently higher,
buoyed by China’s interest rate cut and encouraging domestic labor
data. The Chinese central bank announced that it was slashing its
benchmark one-year lending and one-year benchmark deposit rates by
0.25% to 6.31% and 3.25%, respectively. The People's Bank of China
made such a move for the first time since 2008 and it is widely
perceived that monetary authorities are gearing up to stimulate the
economic growth. Given that the world’s second-largest economy is
bolstering measures to counteract the recent gloom in global
financial markets, benchmarks opened higher.
Moreover, benchmarks were boosted
by the first drop in first time unemployment benefit claims after
three consecutive increases. The U.S. Department of Labor reported
that the advance figure for seasonally adjusted initial claims
declined 12,000 from the previous week's revised figure of 389,000
to 377,000 for the week ending June 2. The decline in initial
claims was also wider than consensus estimates of 379, 000.
Following these positive
developments, benchmarks were trading higher and the Dow had gained
nearly 140 points. Amidst such optimism, the spotlight was on
Federal Reserve Chairman Ben Bernanke, as investors hoped to hear
of some form of quantitative easing (QE) in his congressional
testimony. However, in his testimony before the Congress's Joint
Economic Committee, Bernanke said the central bank was "prepared to
take action as needed to protect the U.S. financial system and
economy in the event that financial stresses escalate". Thus, he
dashed hopes of immediate economic stimulus, which investors have
been expecting for a long time.
Separately, Bernanke also
highlighted two major causes for concern, the labor market and the
European crisis. Speaking about the labor market, he said: “The key
question… (is) will economic growth be sufficient to achieve
continued progress in the labor market”. Regarding the European
crisis, Bernanke added: “The situation in Europe poses significant
risks to the U.S. financial system and economy and must be
monitored closely”.
Investors’ hopes regarding
additional economic stimulus was previously propelled by comments
from Atlanta and San Francisco Fed presidents. Earlier this week,
Atlanta Fed President Dennis Lockhart had said: “Should it become
clear that something resembling my baseline scenario of continued,
though modest, growth is no longer realistic, further monetary
actions to support the recovery will certainly need to be
considered". Separately, San Francisco Fed President John Williams
had lent further support to this argument, emphasizing the impact
of the European crisis. He said: “It's crucial that we maintain our
current highly stimulatory monetary policy stance…We must also
stand ready to do even more if needed to best achieve our statutory
goals of maximum employment and price stability".
After all those hopes were dashed
yesterday, benchmarks underwent a slide and the Nasdaq emerged as
the biggest loser among them. The technology sector had a bad run
yesterday, somewhat justifying the Nasdaq’s fall, and the
Technology Select Sector (XLK) was down 0.6%. Among the losers,
Dell Inc. (NASDAQ:DELL), Google Inc (NASDAQ:GOOG), Oracle
Corporation (NASDAQ:ORCL), Microsoft Corporation (NASDAQ:MSFT) and
Adobe Systems Incorporated (NASDAQ:ADBE) slumped 0.7%, 0.4%, 1.3%,
0.4% and 1.2%, respectively.
ADOBE SYSTEMS (ADBE): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
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