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Stock Market News for December 10, 2012

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A better-than-expected government jobs report helped the Dow and S&P 500 achieve a winning finish, but Apple’s decline dragged the Nasdaq into red. The report also outshined a decline in the consumer sentiment index. The unemployment rate hit its lowest level since December 2008. Meanwhile, U.S. House Speaker John Boehner said no progress had been made on the fiscal cliff issue through the week. The technology sector was the biggest loser, whereas materials were the biggest gainer among the S&P 500 industry groups.

The Dow Jones Industrial Average (DJI) gained 0.6% to close the day at 13,155.13. The Standard & Poor 500 (S&P 500) rose 0.3% to finish Friday’s trading session at 1,418.07. The tech-laden Nasdaq Composite Index dropped 0.4% to end at 2,978.04. The fear-gauge CBOE Volatility Index (VIX) lost 4.1% to settle at 15.90. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 5.47 billion shares, significantly lower than the daily average of 6.48 billion shares. Advancing stocks outpaced decliners on the NYSE; as for 52% stocks that rose, 43% stocks moved lower.

Benchmarks opened higher on Friday propelled by better-than-expected non-farm payroll data. However, the Nasdaq dropped into the negative zone after a slump in Apple Inc.’s (NASDAQ:AAPL) shares. The S&P 500 and the blue-chip index finished higher for the third consecutive week. For the week, the Dow surged 1.0%, the S&P 500 gained 0.1% and the Nasdaq lost 1.1%.

Apple’s shares tumbled 2.6% on Friday and suffered a 9.0% decline for the week. This was its worst week since May 2010. This development dragged the technology sector lower and the Technology SPDR (XLK) fell 0.5%. Stocks such as Google Inc (NASDAQ:GOOG), NVIDIA Corporation (NASDAQ:NVDA), Dell Inc. (NASDAQ:DELL) and Applied Micro Circuits Corporation (NASDAQ:AMCC) dropped 1.0%, 0.2%, 0.3% and 2.8%, respectively.

Meanwhile, the U.S. Bureau of Labor Statistics reported that total nonfarm payroll employment increased by 146,000 in November, beating consensus estimates of 93,000. The increase in non-farm payroll employment was largely driven by retail trade, professional and business services, and health care. In November, retail trade added 53,000 jobs, while professional and business services added 43,000 jobs. Manufacturing showed no change for the month. The unemployment rate declined to 7.7% from October’s figure of 7.9%.   
Meanwhile, the Thomson Reuters/University of Michigan’s preliminary reading of consumer sentiment index declined to its lowest level since August.  According to the report, consumer sentiment surprisingly tumbled to 74.5 in December from 82.7 in November. According to experts, consumer sentiment fell because Americans are worried about the Fiscal Cliff issue.

Speaker of the United States House of Representatives, John Boehner, said no progress had been made on the Fiscal Cliff issue last week. President Barack Obama once gain said that no deal is possible without increasing tax rates for rich Americans. On the other hand, Boehner said government should get “serious” about the automatic spending cuts. If Congress fails to seal a deal about the Fiscal Cliff issue, then its effect will be felt in three weeks.

The materials sector was the major gainer among the S&P 500 industry groups and the Materials Select Sector (XLB) gained 0.8%. Stocks such as E I Du Pont De Nemours And Co (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Eastman Chemical Company (NYSE:EMN), Celanese Corporation (NYSE:CE) and Ashland Inc. (NYSE:ASH) surged 0.7%, 2.2%, 1.6%, 0.6% and 1.7%, respectively.

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