Back to top

Market News

Benchmarks rebounded from initial losses and finished in the green after John Boehner’s optimistic comments about reaching an agreement on the Fiscal Cliff issue. GDP expanded more than previously estimated and existing home sales increased in November. However, the number of Americans filing for unemployment benefits surged in the previous week. All ten of the S&P 500 industry groups finished in the green and the financial sector emerged as the biggest gainer.

The Dow Jones Industrial Average (DJI) gained 0.5% to close the day at 13,311.72. The Standard & Poor 500 (S&P 500) added 0.6% to finish yesterday’s trading session at 1,443.69. The tech-laden Nasdaq Composite Index surged 0.2% to end at 3,050.39. The fear-gauge CBOE Volatility Index (VIX) climbed 1.8% to settle at 17.67. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.4 billion shares, slightly lower than the daily average of 6.46 billion shares. Advancing stocks outpaced decliners on the NYSE; as for 65% stocks that rose, only 31% stocks moved lower.

House of Representatives Speaker John Boehner said he will continue to work with President Barack Obama to find a solution to the Fiscal Cliff issue. However, he accused President Obama and Democrats for going slow on solving the Fiscal Cliff issue. Earlier, Boehner had proposed a “Plan B”, according to which people earning above $1 million will have to pay higher tax rates. Republicans will try to pass “Plan B” on Thursday evening. However, President Barack Obama has threatened to veto the legislation if Congress passes the Republican Plan.

Boehner said: “The president knows that I’ve been able to keep my word on every agreement we’ve ever made…The fact is that his plan is not balanced and as a result time’s running short. I’m going to do everything I can to protect as many Americans from an increase in taxes as I can.” He also said: “I did my part. They’ve done nothing.”

The U.S Department of Commerce said that according to its “third” estimate, gross domestic product increased 3.1% annually in the third quarter, beating consensus estimates of 2.8%. In the “second” estimate, the real GDP surged 2.7%. The increase in GDP was mainly boosted by personal consumption expenditures, private inventory investment, federal government spending and residential fixed investment.

National Association of Realtors reported that existing home sales increased 5.9% to a seasonally adjusted annual rate of 5.04 million in November from the October revised figure of 4.76 million. This was above consensus estimates of 4.88 million. In November, existing home sales surged at the fastest pace in three years. According to Lawrence Yun, NAR’s chief economist, “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation.”

Separately, the U.S. Department of Labor revealed that initial claims increased during the previous week. According to the report, the advance figure of seasonally adjusted initial claims increased 17,000 to 361,000 for the week ending December 15 from the prior week’s revised figure of 344,000. This was above consensus estimates of 355,000.   

The financial sector was the biggest gainer among the S&P 500 industry groups and the Financial Select Sector SPDR (XLF) gained 1.3%. Stocks such as JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Goldman Sachs Group, Inc. (NYSE:GS), PNC Financial Services (NYSE:PNC) and Citigroup Inc. (NYSE:C) jumped 2.3%, 1.3%, 1.9%, 0.9% and 1.8%, respectively.
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%