Stock Market News for July 23, 2012 - Market News
23 Julho 2012 - 6:06AM
Zacks
European debt concerns returned to
haunt the markets and overshadowed strong corporate results to end
the benchmarks’ three-day winning streak. An announcement by
Spain’s autonomous region Valencia’s government that it was seeking
financial aid reminded investors of the flagging condition of
Europe’s economy. European debt concerns have taken a backseat over
the past few days and earnings results hogged the limelight to lift
benchmarks higher. However, it quite was the opposite case on
Friday. Losses on Friday eroded the Dow’s and Nasdaq’s July gains,
but all of the benchmarks maintained their weekly gains.
The Dow Jones Industrial Average
(DJI) slumped 120.79 points or 0.9% and closed at 12,822.57. The
Standard & Poor 500 (S&P 500) inched down 1% to finish
Friday’s trading session at 1,362.66. The tech-laden Nasdaq
Composite Index plunged 1.4% and was down to 2,925.30. The
fear-gauge CBOE Volatility Index (VIX) gained 5.3% and settled at
16.27. Consolidated volumes on the New York Stock Exchange, the
Nasdaq and the American Stock Exchange were 6.7 billion shares,
matching the 50-day moving average. Declining stocks outpaced the
advancers on the NYSE; as for 64% stocks that dropped, 33% stocks
moved higher.
The headline that dominated the
markets’ direction was the announcement by the Valencia region’s
government that it would seek financial help from Madrid. The
Valencia regional government stated: "Valencia, like in other
autonomous regions, is suffering the consequences of the liquidity
shortage in markets due to the economic crisis”. The region still
has to repay €2.85 billion by year end. The news reminded
investors’ about the lingering economic troubles of Europe.
Further, the Spanish government
forecasted that the nation will have to continue to endure another
year of recession in 2013. The Budget Minister Cristobal Montoro
said gross domestic product (GDP) is now forecasted to contract by
0.5% in 2013 as against prior expectations of a growth of 0.2%. The
news fuelled investors’ apprehensions about the economic situation
and was reflected in the markets’ downfall. Spain’s equity
benchmark was down 5.8% and the 10-year bond yields also sprung.
Ripple effects were felt in the US too and markets suffered heavy
losses on Friday.
The banking sector is usually most
vulnerable to such developments. The KBW Bank Index (BKX) slumped
1.9% and stocks including Bank of America Corporation (NYSE:BAC),
Citigroup, Inc. (NYSE:C), Morgan Stanley (NYSE:MS), Regions
Financial Corporation (NYSE:RF) and SunTrust Banks, Inc. (NYSE:STI)
dropped 2.6%, 2.7%, 3.6%, 3.6% and 3.0%, respectively.
The European debt woes overpowered
another round of strong corporate figures. Markets had been
enjoying an uptrend on most of the past few days, buoyed by
encouraging earnings results. However, encouraging figures from
companies including General Electric Company (NYSE:GE),
Schlumberger Limited (NYSE:SLB) (1.0%) and Baker Hughes
Incorporated (NYSE:BHI) did the little to help the indices on
Friday. While General Electric and Schlumberger gained 0.4% and
1.0%, respectively, Baker Hughes jumped a sharp 9.2%. Also, SanDisk
Corporation (NASDAQ:SNDK) surged 10.3% following second quarter
results. The company gave a bright outlook going forward.
Management believes that demands for mobile and SSD solutions will
be higher, thus adding to revenues.
As mentioned earlier, the earnings
surprises could not help benchmarks finish in the green. However,
the benchmarks managed to hold onto the gains for the week. The
Dow, S&P 500 and Nasdaq were up 0.4%, 0.4% and 0.6%,
respectively.
BANK OF AMER CP (BAC): Free Stock Analysis Report
BAKER-HUGHES (BHI): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
REGIONS FINL CP (RF): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis Report
SUNTRUST BKS (STI): Free Stock Analysis Report
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