Major indices of the American stock markets closed flat on Wednesday after experiencing a strong rally on the first trading day of the Year. Euro zone worries were not strong enough for markets to move southwards. Retail stocks surged after Christmas sales figures increased 5.3% on a year over year basis.
The Dow Jones Industrial average (:DJIA) gained a meager 0.17% or 21.04 points to close at 12,418.42. The tech laden Nasdaq Composite Index fell 0.01% to end the day at 2,648.36. The Standard & Poor 500 moved up 0.02% or 0.24 points to finish at 1,277.30, with health care and telecom sector stocks faring the worst and consumer-discretionary items emerging as gainers. The CBOE Volatility Index, widely considered to be the fear gauge of the market, closed near 22. Decliners outshined advancing stocks on the NYSE and for every 1,465 shares that rose, 1,541 shares fell. On the NYSE, Nasdaq and Amex, about 6.23 billion shares changed hands compared with last year’s average of 7.84 billion shares.
Markets in Europe fell after borrowing costs of Italy increased once again, raising concerns about Europe’s effort to aid debt-hobbled governments in the region. Italy’s biggest bank UniCredit’s share prices plummeted nearly 10% after it offered to sell 7.5 billion euros ($9.8 billion) at a 43% discount to improve its balance sheet. The euro settled below the $1.30 mark to close at $1.2945. Meanwhile, European banks are finding it extremely difficult to raise capital and refinance debt of eurozone countries because of higher expenses due to tighter credit markets. At the ECB, commercial bank’s overnight deposit had hit a new high of 453 billion euros ($591 billion), highlighting the current issues that banks have about lending to one another.
On the economic front, the U.S. Census Bureau reported that factory orders for November rose 1.8% after two consecutive monthly decreases. New orders for manufacturing goods now stand at $459.2 billion. In a separate report, domestic vehicle sales for the month of December ended on a strong note. Shares of motor company Ford (NYSE:F) gained 1.5% after the company’s sales rose by 10% during December. Major economic releases that are lined up for the week include Automatic Data Processing which is set to release its employment report on Thursday, just ahead of weekly jobless claims. Other major economic news slated for today includes the ISM Services Index while nonfarm payrolls are scheduled for Friday.
Coming to sectoral stocks, retails stocks were the leaders in Wednesday’s trade, gaining 0.8% as a group. Major gainers of the day include Ralph Lauren (NYSE:RL) which surged 4.2% to close at $142.88. Shares of Bed Bath & Beyond Inc. (NASDAQ:BBBY), Ross Stores Inc. (NASDAQ:ROST), VF Corporation (NYSE:VFC), Urban Outfitters, Inc. (NASDAQ:URBN) and Gap (NYSE:GPS) all rose by 1.8%, 0.7%, 4.4%, 2.4% and 1.8% to close at $59.44, $47.62, $135.38, $28.41 and $18.88 respectively.
Coming to some individual stocks, shares of Netflix (NASDAQ:NFLX) gained 11.4% after the online movie rental company said that in its fourth quarter, subscribers had streamed 2 billion hours of video from its site. Shares of data storage company NetApp Inc (NASDAQ:NTAP) fell 3.1% after analysts at Credit Suisse (NYSE:CS) downgraded the company stating that NetApp’s market share growth would slow down in 2012. An analyst from Goldman Sachs (NYSE:GS) added shares of fast food restaurant Chipotle Mexican Grill, Inc (NYSE:CMG) to its conviction buy list. Shares of the company gained 2.2% to close at $348.75. Car vendor AutoNation, Inc. (NYSE:AN) fell 6.8% to close at $33.26 after Edward Lampert’s ESL fund reduced its stake in the company from 56.4% to 52.5%.
More From Zacks.com