US stocks registered modest gains for the week that ended on Friday, 17 February 2012. Earlier this week Chinas officials expressed their intent to expand their countrys investment in Europe. That helped bolster confidence in the precarious eurozone. Though Greeces parliament approved austerity measures last weekend, market participants became concerned that efforts to get the flagging country bailout funds will remain bogged down because of stories suggesting that eurozone officials question the sincerity of Greeces commitment to measures intended to shore up fiscal and financial condition.
Despite this, for the week, that ended on Friday, 17 February 2012, Dow ended higher by 148.64 points or 1.2% to end at 12,949.87. The Nasdaq gained 47.9 points or 1.6% to end at 2,951.78. The S&P 500 gained 18.59 points or 1.4% to end at 1,361.23.
Even though most of the markets concern was on Greece, and other countries in the eurozone periphery, market participants were reminded of precarious conditions in the core of Europe when analysts at Moodys issued negative outlooks on France, Austria, and the United Kingdom. Meanwhile, headline GDP for the fourth quarter featured a 0.3% decline for the eurozone, a 0.2% decline in Germany, and a 0.2% increase in France.
The latest statement from the Federal Open Market Committee of the U.S. Federal Reserve during the week, was just a bit more hawkish on U.S. monetary policy, hinting that some pre-emptive monetary policy tightening could occur, or at least reduced accommodative Fed actions, in the next year and-a-half. However, the FOMC members were divided on those matters.
A bevy of major banks and financial institutions, including Bank of America, Citigroup, JPMorgan Chase were thrown into a negative light when analysts at Moodys decided to review their ratings.
Among the companies that reported earnings during the week, Comcast posted upside earnings surprises. General Motors and Marriott missed the consensus estimate.
In terms of acquisition, Kellogg announced that it has agreed to acquire the Pringles brand from Procter & Gamble for nearly $2.7 billion. SanDisk announced it has agreed to acquire FlashSoft, but the financial terms of the deal were not disclosed.
The week was extremely heavy in terms of economic data. Latest weekly initial jobless claims tally made a surprise drop to 348,000. Housing starts improved in January to an annualized rate of 699,000 from an upwardly revised rate of 689,000 in the prior month. That surpassed the pace of 671,000 housing starts that had been broadly expected. Measures of both consumer prices and core consumer prices in January increased by 0.2%, contrasting with calls for a 0.3% increase in overall prices and a 0.1% increase in core prices. Overall consumer prices climbed 2.9% from the prior year, but core consumer prices climbed 2.3% year over year for their sharpest annual increase since 2008.
News that industrial production in January was flat disappointed since the forecast called for a 0.6% increase after industrial production had increased by 1.0% in the prior month. Overall retail sales for January increased by 0.4% following flat sales in the prior month, but a much stronger increase of 0.8% had been broadly expected. Slower-than-expected clip came as auto sales stalled. Taking autos out of the equation, retail sales actually climbed by 0.7%, which bested the 0.5% increase that had been widely predicted to follow a 0.5% decline in the prior month.
On Friday, the Dow Jones Industrial Average rose 45.79 points, or 0.4%, to 12,949.87, a 52-week high and its highest close since May, 2008. The Nasdaq Composite fell 8.07 points, or 0.3%, to 2,951.78. The S&P 500 Index gained 3.19 points, or 0.2%, to 1,361.23, with the consumer discretionary rising the most among its 10 industry groups and health care taking the hardest hit.
Tech stocks, which represent the largest sector by market weight, lagged all session and settled with an incremental loss. Still, relative weakness among tech issues weighed on the Nasdaq, which had actually outperformed its counterparts in the prior session to book its best close since late 2000.
There were reports that European leaders were moving closer to securing a second bailout for Greece, despite apparent friction between that country and Germany. Euro-area finance ministers will meet in Brussels on Monday, when U.S. markets are closed for the Presidents Day holiday. While a second financial package for Greece is expected to be approved, negotiations have been known to unravel in the recent past.
Data released Friday from the U.S. Labor Department showed that consumer prices for January rose a seasonally adjusted 0.2%, slightly below expectations of a 0.3% increase, but the biggest increase since September, 2011.
General Mills shares fell nearly 4% after the cereal maker trimmed its 2012 outlook.
Crude-oil futures rose on Friday, 17 February 2012 to their highest level in nine months due to lingering geopolitical worries and ongoing Greek fiscal drama. Recent data showing improvement in the U.S. job, housing and manufacturing markets also helped move crude along, as did renewed optimism Greece will receive what it needs to avoid a disorderly default.
Crude for March delivery rose 93 cents, or 0.9%, to end at $103.24 a barrel on the New York Mercantile Exchange. Oil gained 4.6% this week, advancing for two consecutive weeks.
Gold for December delivery fell $2.50, or 0.1%, to settle at $1,725.90 an ounce on the Comex division of the New York Mercantile Exchange on Friday. It was flat on the week. Silver for March delivery fell 15 cents, or 0.5%, to $33.22 an ounce on Friday. Silver lost 1.1% this week, down for three consecutive weeks.
For every stock losing ground roughly two gained on the New York Stock Exchange, where 897 million shares traded. Composite volume just topped 3.7 billion.
Indian ADRs ended mostly higher on Friday. Gains were led by MTNL which soared 17.7%. HDFC Bank and ICICI Bank followed gaining 2.1% and 1.6% respectively.
For the year till date, the Dow, Nasdaq and S&P 500 are trading higher by 6%, 13.3% and 8.2% respectively. US market will remain closed on Monday, 20 February 2012 due to observance of Presidents Day Holiday.
Powered by Capital Market - Live News
