Stock Market News for March 5, 2012

The absence of major news and significant domestic economic data meant that Friday’s quiet trading session left the benchmarks languishing in the red zone. Positive housing and jobs data lifted benchmarks to new multi-year highs during the week, culminating in another green finish for the benchmarks, except the Dow.

The Dow Jones Industrial Average (DJI) shed 0.1% and closed at 12,977.57. The Standard & Poor 500 (S&P 500) lost 0.3% and finished Friday’s trading session at 1,369.63. The Nasdaq Composite Index settled at 2,976.19, after losing 0.4%. While the benchmarks hardly showed any significant movements, the fear-gauge CBOE Volatility Index closed almost flat. The VIX edged up 0.2% and closed at 17.29. Total volume on the New York Stock Exchange (NYSE) was 3.36 billion shares. For 32% of the stocks that advanced, 64% of the stocks were on the declining side. The remaining stocks were left unchanged.

Coming to the advance-decline ratio, the Dow had an equal number of gainers and decliners. Among the 30 Dow components, International Business Machines (NYSE:IBM), JP Morgan Chase & Co. (NYSE:JPM), Kraft Foods Inc. (NYSE:KFT), AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) led the advancers with gains of 0.7%, 0.6%, 0.6%, 0.8% and 0.6%, respectively. Decliners were led by American Express (NYSE:AXP), Caterpillar, Inc. (NYSE:CAT), Cisco Systems, Inc. (NASDAQ:CSCO), General Electric Company (NYSE:GE) and Microsoft Corporation (NASDAQ:MSFT) which dropped 1.1%, 0.8%, 0.6%, 0.8% and 0.7%, respectively.

On Thursday, Iranian media had reported almost an hour before the closing bell that there was an explosion in an unknown Saudi oil pipeline. However, soon after the closing bell, this report was rubbished by a Saudi oil official. Thus, with fears of supply disruption fading, oil prices dropped from their 11-month high. On Friday, Energy SPDR Select Sector Fund (XLE) lost 1.1% and stocks including ConocoPhillips (NYSE:COP), Exxon Mobil Corporation (NYSE:XOM), Schlumberger (NYSE:SLB), Halliburton Company (NYSE:HAL), National Oilwell Varco, Inc. Co (NYSE:NOV) and Marathon Oil Corporation (NYSE:MRO) lost 0.7%, 0.6%, 1.5%, 1.2%, 2.2% and 2.2%, respectively.

While the day lacked action, an initial public offering garnered tremendous gains. Consumer-review website, YELP INC. (NYSE:YELP) debuted on the Street and gained 63.9% to settle at $24.58 a share. Earlier, the company had priced its IPO at $15 per share. At these levels, the company was valued at $1.43 billion and is trading at a level 17 times higher than its revenues in 2011.

The last day of the week saw benchmarks scale new heights buoyed by employment and housing data. The Dow settled above 13, 000 on Tuesday, the first time since May 2008 and the S&P 500 was at its highest closing level since June 2008. During the week, the S&P 500 also recorded its longest winning streak since the one that concluded on January 23 this year. The Nasdaq too kept dwelling at levels last seen in December 2000 or at the fag-end of the dot-com bubble. Additionally, the tech-laden index crossed the 3, 000 mark on Wednesday, but failed to sustain those high levels by the closing bell.

Coming to the week’s positive employment and housing data, the U.S. Department of Labor reported that the advance figure for seasonally adjusted initial claims for the week ending February 25 had dropped 2,000 to 351,000. On last Monday, he National Association of Realtors reported that pending home sales were on an uptrend and well above the year-ago level. According to the report, the Pending Home Sales Index increased 2% to 97 in January, up from a downwardly revised figure of 95.1 in December.

The week did offer some dismal economic data, but rising consumer confidence, increased business activity in February, and better than expected GDP numbers helped the benchmarks extend their stay in the green for the week. As for the week, the Dow lost a mere 0.04%, but S&P 500 and Nasdaq climbed 0.3% and 0.4%, respectively. The benchmarks are also enjoying a healthy run for the year, with the Dow, S&P 500 and Nasdaq up 6.2%, 8.9% and 14.2%, respectively for 2012 so far.