(AAPL) Stock Market News for June 28, 2011 – Market News

On Monday, markets ended their three-day losing streak and were on course for a finish in the green, driven by financial and technology shares as well as optimism over the Greek austerity plan. Global banking regulators raised capital requirements for banks by a lesser than expected margin which boosted the financial stocks as well as the broader markets.

The Dow Jones Industrial Average (DJIA) climbed up to trade over the psychological level of 12, 000, gaining 0.9% to close at 12,043.56. Only four of the 30 Dow components were in the red. The Standard & Poor 500 (S&P 500) moved up 0.9% to close at 1,280.10. All of the 10 groups in the S&P 500 shared the cheer to close in the green. The tech-laden Nasdaq composite Index gained 1.3% and finished the day at 2,688.28. The fear-gauge CBOE Volatility Index dropped below 21. On the New York Stock Exchange, AMEX and Nasdaq, consolidated volumes were 6 billion shares, below the daily average so far this year of around 7.57 billion. For every two stocks that rose on the NYSE, one stock was on the declining side.

Global banking regulators met in Basel on Saturday and announced an additional requirement of financial padding for the largest banks, which are believed to be too big to fail. The banking regulators said banks have to up their capital requirements by 1% to 2.5%, which would enable the large banks to have more capital padding than other institutions. Originally it was feared that the regulators would ask for a 3.0% increase in capital cushion. This will enable banks to have more funds for share repurchase and dividends.

The financial sector has been one of the worst performing sectors for the year, but it gained 1.1% on Monday, boosted by these developments. Bellwethers that gained included Bank of America Corporation (NYSE:BAC), Citigroup, Inc. (NYSE:C), U.S. Bancorp (NYSE:USB) and JPMorgan Chase & Co. (NYSE:JPM) and they moved up 3.1%, 1.0%, 2.7%, and 1.0%, respectively.

Indices had been rattled on several occasions in the past by concerns over Greece debt default. Recently, such fears have been put to rest with the country agreeing to undertake an austerity plan, which however, awaits Parliament’s approval. Investors are optimistic about a positive outcome as the Greek Parliament begins its three-day debate on the austerity plan. Greek Prime Minister George Papandreou now faces a formidable task as he attempts to push through the austerity plan which is absolute necessary to prevent a debt default. The plan has faced opposition from several quarters and even members of the government had voiced their dissent. Last week, Greece, the European Union and the International Monetary Fund had agreed to a five-year austerity plan. Additionally, the IMF and EU had strictly maintained that in order to receive the bailout package, Greece would have to adhere to the austerity measures.

Economic reports on the domestic front came in mixed as the Commerce Department reported a 0.3% increase in Personal Income for the month of May. This was lower than the 0.4% rise in April and also failed to beat economists’ projection of an increase of 0.4%. Consumer spending also fell short of economists’ expectations by 0.1% and remained almost flat, suggesting a slower economic recovery. Separately, The Federal Reserve Bank of Dallas reported business activity in Dallas had receded from 10.1 in May to -17.5% in June. Negative figure, quite naturally, indicates a contraction in the business activity. The production index also dropped to 5.6 in June from 12.7 in May.

Technology shares joined the pool of gainers and lifted the broader markets. The gains were led by Microsoft Corporation (NASDAQ:MSFT), which surged 3.7%. Other gainers included Google Inc. (NASDAQ:GOOG), Oracle Corp. (NASDAQ:ORCL), Apple Inc. (NASDAQ:AAPL) and Adobe Systems Inc. (NASDAQ:ADBE) and they moved up by 1.7%, 1.4%, 1.7% and 3.1%, respectively.

APPLE INC (AAPL): Free Stock Analysis Report

ADOBE SYSTEMS (ADBE): Free Stock Analysis Report

BANK OF AMER CP (BAC): Free Stock Analysis Report

CITIGROUP INC (C): Free Stock Analysis Report

GOOGLE INC-CL A (GOOG): Free Stock Analysis Report

JPMORGAN CHASE (JPM): Free Stock Analysis Report

MICROSOFT CORP (MSFT): Free Stock Analysis Report

ORACLE CORP (ORCL): Free Stock Analysis Report

US BANCORP (USB): Free Stock Analysis Report

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