Stock Market News for June 15, 2011 - Market News
15 June 2011 - 7:07PM
Zacks
A better-than-expected retails sales report lifted the overall
market to record their largest gains in almost two months on
Tuesday. After the markets recorded its first sixth consecutive
week of losses since the fall of 2002 last week, gains akin to
yesterday’s will enable the benchmarks avoid a seventh straight
week of losses.
The Dow Jones Industrial
Average (DJIA) surged 123 points or 1.0% to close at 12,076.11,
recording its largest gains for the month. Posting the strongest
gains since April 20, the Standard & Poor 500 (S&P 500)
gained 1.3% to settle at 1,287.87. The Nasdaq Composite Index
gained 1.5% and settled at 2,678.72. In what analysts termed as a
relief rally, consolidated volumes on the New York Stock Exchange,
Amex and Nasdaq remained low at 6.45 billion shares and were below
the daily average of 7.58 billion. On the NYSE, the advance decline
ratio was 2,511 to 503. The fear-gauge CBOE Volatility Index (VIX)
dropped 6.3% to 18.37.
Retail sales, an indicator of
consumer purchasing from the Commerce Department, did not come in
exceptionally strong or significantly positive. But the figure
exceeded economist’s expectations and the markets opted to focus on
the positives amidst a stretch of negative economic reports that
has dampened investor sentiment over several days. According to the
U.S. Census Bureau: “Advance estimates of U.S. retail and food
services sales for May, adjusted for seasonal variation and holiday
and trading-day differences, but not for price changes, were $387.1
billion, a decrease of 0.2 percent (±0.5%) from the previous month,
but 7.7 percent (±0.7%) above May 2010”. Though retail sales
declined for the first time in 11 months, by 0.2%, the drop was
less than economists’ projection of a fall of 0.5%.
Analysts viewed this
positivism as an excuse to buy into a weaker market just when the
markets started to appear as oversold. Even though traders have
focused on the positives in the retails sales report, concerns
about the economic environment still remain, given the higher gas
prices.
Separately, the Bureau of
Labor Statistics announced a 0.2% jump in the seasonally adjusted
Producer Price Index (PPI) for finished goods in May. The report
stated: “This advance followed increases of 0.8 percent in April
and 0.7 percent in March. At the earlier stages of processing,
prices received by manufacturers of intermediate goods climbed 0.9
percent in May, and the crude goods index declined 4.1 percent”.
This increase was also higher than economists’ expectation of a
0.1% increase.
Also aiding the markets were
reports of higher industrial output and retail sales in China.
While industrial output surged 13.3% in May, retail sales soared
16.9% year over year in May. Additionally, with reports of China’s
inflation hitting its highest level in three months, the Chinese
central bank raised its reserve requirement ratio by 0.50
percentage points in a bid to combat inflationary worries. The
reserve banks are now to hold a record 21.5% of deposits. The
National Statistics bureau of China reported that consumer prices
rose 5.5% in May, driven by a 11.7% rise in food costs. This is
higher than the 5.3% increase recorded in April and also surpassed
the March’s 32-month record high of 5.4%.
Federal Reserve Chairman Ben
Bernanke comments on the need to reduce the federal budget deficit
had little impact on the markets . He warned Congress of the
significance of acting “in a timely manner” and warned of the
consequences of delay or a short suspension of payments on
principal or interest on the Treasury’s debt obligations. He said:
“Interest rates would likely rise, slowing the recovery and,
perversely, worsening the deficit problem by increasing required
interest payments on the debt for what might be a protracted
period”.
The retail sector shared the
cheer particularly helped by shares of Best Buy Co. Inc. (NYSE:BBY)
and J. C. Penney Company, Inc. (NYSE:JCP). While strong earnings
results helped the former gain 4.6%, shares of J.C. Penney soared
17.5% after it announced the Ron Johnson, senior vice-president of
retail at Apple, will take charge as chief executive in November.
Other gainers included, Target Corp. (NYSE:TGT), BJ's Wholesale
Club, Inc. (NYSE:BJ), PriceSmart Inc. (NASDAQ:PSMT), Family Dollar
Stores Inc. (NYSE:FDO), 99 (NYSE:NDN), Dollar Tree, Inc.
(NASDAQ:DLTR) and Fred's Inc. (NASDAQ:FRED) and they were up 1.9%,
1.8%, 1.3%, 1.7%, 1.5%, 1.2% and 1.9%, respectively.
The energy sector also
witnessed strong gains following the jump in crude prices. Light,
sweet crude oil for July delivery increased 2.1% to $99.37 per
barrel. Among the gainers in the sector were, Chevron Corp.
(NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), BP plc (NYSE:BP),
Marathon Oil Corporation (NYSE:MRO) and Hess Corporation
(NYSE:HES), and they jumped 1.7%, 1.5%, 1.8%, 4.5% and 2.6%,
respectively.
BEST BUY (BBY): Free Stock Analysis Report
BJ'S WHOLESALE (BJ): Free Stock Analysis Report
BP PLC (BP): Free Stock Analysis Report
CHEVRON CORP (CVX): Free Stock Analysis Report
DOLLAR TREE INC (DLTR): Free Stock Analysis Report
FAMILY DOLLAR (FDO): Free Stock Analysis Report
FREDS INC (FRED): Free Stock Analysis Report
HESS CORP (HES): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis Report
MARATHON OIL CP (MRO): Free Stock Analysis Report
99 CENTS ONLY (NDN): Free Stock Analysis Report
PRICESMART INC (PSMT): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
Zacks Investment Research
99C Only Stores (NYSE:NDN)
Historical Stock Chart
From Jun 2024 to Jul 2024
99C Only Stores (NYSE:NDN)
Historical Stock Chart
From Jul 2023 to Jul 2024