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Stock Market News for April 18, 2012

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Encouraging corporate results and Spain’s falling borrowing costs boosted the markets to their best performance in nearly a month. The Dow rose for the fourth time out of the last five trading sessions and is back over its key 13, 000 level. Additionally, the Nasdaq posted its best performance of the year.

The Dow Jones Industrial Average (DJI) soared 194.13 points or 1.5% to finish at 13,115.54. The Standard & Poor 500 (S&P 500) was up 1.6% and closed yesterday’s trading session at 1,390.78. The tech-laden Nasdaq Composite Index sprung 1.8% to settle at 3,042.82. The fear-gauge CBOE Volatility Index (VIX) declined 5.6% to settle at 18.46. Consolidated volumes on the New York Stock Exchange (NYSE), Nasdaq and the American Stock Exchange were roughly 6 billion shares, lower than the year-on-year average of approximately 6.78 billion shares. Advancers outnumbered the decliners on the NYSE; as for every stock that declined, more than 3 stocks ended in the green.

Meanwhile, the Dow is now back above the 13, 000 mark after over a week of languishing below that level. This was also the Dow’s biggest gain in almost a month in terms of points, and it had rallied 209 points during the trading session. The S&P 500 is still below its key 1,400 level but has now narrowed the gap to precisely 9.22 points. The Nasdaq extended its gains above its key level and posted its best performance for the year until now.

Apple Inc. (NASDAQ:AAPL), was a major contributor to the Nasdaq’s gains after it jumped 5.1% yesterday. The world’s most valued company, Apple, bounced back after plunging for five-straight trading days. A slide in the iPhone and iPad maker’s stock had dented the Nasdaq substantially. This was clearly evident on Monday when a 4.2% drop in Apple dragged down the index.

Other tech shares also enjoyed decent gains, and the technology sector was one of the best performers among the 10 industry groups in the S&P 500. The Technology Select Sector SPDR (XLK) jumped 2.2% and stocks including Microsoft Corporation (NASDAQ:MSFT), Oracle Corporation (NASDAQ:ORCL), Dell Inc. (NASDAQ:DELL), Cisco Systems, Inc. (NASDAQ:CSCO) and Juniper Networks, Inc. (NYSE:JNPR) gained 1.2%, 2.3%, 1.6%, 1.8% and 3.7%, respectively. Meanwhile, tech bellwethers such as International Business Machines Corporation (NYSE:IBM), Intel Corporation (NASDAQ:INTC) and Yahoo! Inc. (NASDAQ:YHOO), which  were scheduled to report their earnings results after the closing bell, gained 2.3%, 0.2% and 1.5%, respectively.

While investors waited results from these tech bellwethers, their sentiment had already received a boost from several encouraging corporate results released earlier during the day. The Coca-Cola Company (NYSE:KO) came out with its first quarter 2012 results that surpassed the Street’s estimates. The cola giant was joined by Johnson & Johnson (NYSE:JNJ) and financial bellwether The Goldman Sachs Group, Inc. (NYSE:GS). Both these companies reported encouraging figures and Goldman Sachs’ first quarter 2012 earnings per share of $3.92 was more than double of its prior quarter’s earnings of $1.84 per share.

Also helping the markets’ rally yesterday was a fall in Spain’s borrowing costs. Spanish bond-yields have trending up of late and that has sparked off fears among investors. However, the fall in the nation’s 10-year government bond yield to 5.88% from the 6.1% attained on Monday brought relief to the US benchmarks. The downtrend had also enabled European stocks to notch their best gains in almost four months. Further, this clearly shows that investors have gained confidence about the nation’s financial ability. The bond auction was well received and the country sold more 12- and 18-month bills than it had expected to sell.

Coming to domestic economic data, the U.S. Department of Housing and Urban Development reported that privately-owned housing starts in March fell 5.8% from revised February estimate of 694,000 to a seasonally adjusted annual rate of 654,000 in March. Consensus estimates had projected privately-owned housing starts to clock a figure of 704, 000. Additionally, in the joint release by the The U.S. Census Bureau and the Department of Housing and Urban Development, building permits in March were reported to have climbed 4.5% over the revised February rate of 715,000 and stood at 747,000 in March.

Separately, industrial production remained flat for the second month in March, while manufacturing output dropped. The report by the Board of Governors of the Federal Reserve System reported: “Industrial production was unchanged in March for a second month but rose at an annual rate of 5.4 percent in the first quarter of 2012. Manufacturing output declined 0.2 percent in March but jumped 10.4 percent at an annual rate in the first quarter”.

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