Stock Market News for August 30, 2010

Federal Reserve Chairman Ben Bernanke’s flexible stance and his pledge to take extra measures to stabilize the recovery hit the right chord with investors, sending stocks to their biggest gains in almost four weeks. The rally was also a result of Bernanke’s assurance that the Fed would act promptly in case of unexpected developments.

Intel’s projection that its third-quarter revenue would fall below its initial estimates and a sharp downward revision to second-quarter GDP unnerved investors to some extent but failed to weigh on their minds. Treasuries lost favor, with the 10-year note falling in price and its yield jumping to 2.654%.

The Dow Jones industrial average rallied 165 points, or 1.7%, to reclaim the 10,000 mark. The average closed at 10,156.65. The technology stocks-laden Nasdaq composite index climbed 35 points, or 1.6%, to end the day at 2153.63. The broader S&P 500-stock index advanced 17.37 points, or 1.7%, to 1064.59. However, all major indexes ended the week with losses. The Dow average fell 0.6%, the S&P 500 was down 0.7%, and the Nasdaq dropped 1.2%.

This morning world stocks took some heart in Bank of Japan’s move to prop up the country’s economy by increasing a low-interest bank lending program. Fears that a rising yen would weaken Japan’s exports in international markets perhaps necessitated the move. In Tokyo, the Nikkei 225 stock average closed up 158.20 points, or 1.8%, to 9,149.26.

Among the DJIA components, DuPont (NYSE:DD), Alcoa (NYSE:AA), Caterpillar (NYSE:CAT) and Boeing (NYSE:BA) all advanced at least 3% Friday. Shares in Hewlett-Packard (NYSE:HPQ) and Johnson & Johnson (NYSE:JNJ) fell 0.6% and 0.4%, respectively.

Seven of the ten S&P500 industry sectors closed lower on the week, led by tech shares (-2.0%), industrials (-1.2%), health care (-0.7%), consumer services (- 0.6%), basic materials (-0.4%), consumer goods (-0.4), and financials (-0.4%). Utilities (+1.9%), telecommunications (+1.0%) and oil and gas shares (+0.4%) closed with gains.

This morning's reports say Intel is planning to buy Germany’s Infineon Tech AG's wireless chip business for about $1.4 billion. Meanwhile, reports show global industry chip sales rose 1.2% in July from June, for a healthy 37% year-on-year improvement.

Read the full analyst report on DD

Read the full analyst report on AA

Read the full analyst report on CAT

Read the full analyst report on BA

Read the full analyst report on HPQ

Read the full analyst report on JNJ