GLW Corning Inc

Markets posted decent gains on Thursday as the European leaders were poised for a breakthrough to the region’s debt crisis, though they remained guarded about the details of a comprehensive plan. Additionally, better-than-expected corporate results helped the broader markets, while the fear-gauge index plummeted once again below 30.

 

The Dow Jones Industrial Average (DJIA) surged 162 points or 1.4% and settled at 11,869.04. The Standard & Poor 500 (S&P 500) moved up 1.1% to finish the day at 1,241.99. The Nasdaq Composite Index gained 0.5% and closed the day at 2,650.67. The fear-gauge CBOE Volatility Index (VIX) has been on quite a ride for the last three sessions, including yesterday. While the index moved below 30 on Monday, on Tuesday it once again surged 10% to trade over 32. Yesterday, the index dropped 7% and was back below 30. On the New York Stock Exchange (NYSE), Amex and Nasdaq, consolidated volumes were 8.54 billion shares, higher than the daily average of 8.01 billion. On the NYSE, the advance decline ratio was 2,404 to 598.

 

Markets had been expecting a positive move from the European leaders while they met at the European Council meeting to figure out a breakthrough for the continent’s lingering debt concerns. No substantial details were divulged, and specific figures of bank recapitalization requirements remained undisclosed. The information that came through was that European leaders were in agreement about the need to recapitalize European banks and Germany agreed to support the initiative for leveraging the bailout fund. However, the size of the Greek write-down has caused an impasse. It was reported later that China had agreed to boost the emergency fund and French President Nicolas Sarkozy is expected to meet Chinese President Hu Jintao today.

 

The benchmarks are being mostly guided by European developments, and hopes of European leaders making a breakthrough to the crisis had lifted the sentiment since last Friday except on Tuesday, when reports of the cancellation of a meeting ahead of the Wednesday’s summit spooked investors. Yesterday’s news from the European front provided few details and did not suggest anything major. However, the markets did not miss out on cashing in on the gains as market onlookers opined that the expectation level for the summit was set low. Thus, whatever progress was made was satisfactory for the investors.

 

Also helping to lift the mood were encouraging corporate results. Boeing Co. (NYSE:BA) with gains of 4.5% led the gainers among the 30 Dow components, after it reported profits that surpassed the Street’s expectations. The company also guided up its outlook for 2011. Separately, Corning Inc. (NYSE:GLW) reported better-than-expected results and shares closed 3.0% higher. In the defense sector, both General Dynamics Corp. (NYSE:GD) and Lockheed Martin Corporation (NYSE:LMT) managed to top expectations, but their shares dropped 2.1% and 3.2%, respectively. Both the companies reported a slip in their backlog and General Dynamics reported a 5.3% drop in its total backlog, Lockheed Martin finished the third quarter with $73 billion of backlog versus $78.4 billion at fiscal-end 2010.

 

On the economic counter, the Commerce Department said durable-goods orders were in line with the consensus for the current period. Though “New orders for manufactured durable goods in September decreased $1.5 billion or 0.8 percent to $200.3 billion,” bookings for other manufactured goods climbed higher, reflecting growth in the economy. Also, “excluding transportation, new orders increased 1.7 percent. Excluding defense, new orders decreased 1.1 percent”. Orders for core capital goods gained 2.4% to post an all-time high.

 

Separately, the U.S. Census Bureau and the Department of Housing and Urban Development said in a joint statement: “Sales of new single-family houses in September 2011 were at a seasonally adjusted annual rate of 313,000… This is 5.7 percent (±18.4%)* above the revised August rate of 296,000, but is 0.9 percent (±16.3%)* below the September 2010 estimate of 316,000”.

 
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