Stock Market News for November 23, 2012

Zacks

Benchmarks finished with decent gains on Wednesday following announcement of ceasefire between Israel and Palestinian militants. Trading volumes were among the lowest this year owing to the Thanksgiving holiday on Thursday. Separately, initial claims dropped from the previous week, but were in line with the Street estimates.  The Energy sector was the major gainer among S&P 500 industry groups.

The Dow Jones Industrial Average (:DJI) surged 0.4% to close the day at 12,836.89. The Standard & Poor 500 (S&P 500) gained 0.2% to finish yesterday’s trading session at 1,391.03. The tech-laden Nasdaq Composite Index rose 0.3% to end at 2,926.55. The fear-gauge CBOE Volatility Index (:VIX) gained 1.5% to settle at 15.31. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 4.76 billion shares, significantly lower than the year-on-year daily average of 6.5 billion shares. Advancing stocks easily outpaced decliners on the NYSE; as for 65% stocks that rose, only 31% stocks moved lower.

A ceasefire declaration in Gaza to end the violence between Israel and the Palestinians lifted the U.S. stocks. Investors were concerned about the Middle East violence as it gave birth to apprehensions over oil supplies being affected. On the New York Mercantile Exchange, January crude oil future increased 63 cents to $87.38 per barrel.

The news helped energy sector emerge as the major gainer among S&P 500 industry groups and the Energy Select Sector SPDR gained 0.5%. Stocks such as Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), TOTAL S.A. (NYSE:TOT), ConocoPhillips (NYSE:COP) and BP plc (NYSE:BP) gained 0.5%, 0.6%, 0.5%, 0.8% and 0.9%, respectively.

The S&P 500 finished in the green for the fourth consecutive day. Benchmarks registered one of their lightest trading session of the year ahead of the Thanksgiving holiday on Thursday. This is a holiday-shortened week and stock markets will close at 1 P.M. on Friday.         

The number of Americans filing for the unemployment benefits declined in the previous week according to the U.S. Department of Labor. According to the report, the advance figure of seasonally adjusted initial claims decreased by 41,000 to 410,000 for the week ending November 17 from the previous week’s revised figure of 451,000. This was below the consensus estimates of 438,000.

Separately, Thomson Reuters/University of Michigan's final reading of consumer confidence data noted that the consumer confidence index increased slightly to 82.7 in November from 82.6 in October. The final reading has significantly dropped from the preliminary November reading of 84.9.

Coming to the corporate earnings, salesforce.com, inc. (NYSE:CRM) surged 8.8% after the company reported better-than-expected third-quarter results. On the other hand, Deere & Company (NYSE:DE) reported its fourth-quarter profit, which came below analysts’ estimates. The company’s shares fell 3.7% after the announcement of its quarterly results.
 
On the international front, Euro zone finance ministers, International Monetary Fund and European Central Bank met on Wednesday to discuss about the Greece debt crisis. However, they failed to reach any conclusion. After the meeting, IMF chief Christine Lagarde said: “It was progress but we have to do a little bit more”. They will gain meet on next Monday.

On top of the disappointment in the Euro zone, investors also remained apprehensive about the impending “fiscal cliff”. Investors have been worried about this issue since Election Day. The $600 billion deficit reduction plan is slated to come into effect at the beginning of 2013. If Washington fails to reach a deal regarding tax hikes and budget cuts, experts project that the economy may slip into another recession.
 

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Read the analyst report on CRM

Read the analyst report on DE

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