(AA) Stock Market News for July 5, 2011 – Market News

Markets skyrocketed to post their best weekly performance in two years as investor sentiment was bolstered by optimistic economic reports that somewhat washed out fears of a sluggish economic recovery. The Dow, in particular, had a great run, collecting 648 points over the week. This was its best weekly performance since November 2008.

The Dow Jones Industrial Average (DJIA) shot up by 168 points or 1.4% to end at 12,582.77. The Dow added more than 100 points for the fourth time in the week ending July 1 and the benchmark is now up 8.7% for the year. The Dow posted its best weekly gains since the 782-point increase during the week ending November 28, 2008. The Standard & Poor 500 (S&P 500) jumped 1.4% to settle at 1,339.67. The index is up 6.5% for the year. The Nasdaq Composite Index surged 1.5% to finish the day at 2,816.03. While the Dow and S&P 500 surged over 5.4% and 5.6%, respectively, for the week, the Nasdaq was up 6.2% and the gains ensured all these benchmarks registered their best weekly performance since July 2009.

On the New York Stock Exchange, consolidated volumes were at 3.3 billion shares, with advancers beating decliners by 5 to 2. The markets may have eased into their fifth straight day of gains, but tight trading volumes leaves keeps alive apprehensions over the sustainability of the gains. On the New York Stock Exchange, Amex and Nasdaq, consolidated volumes were 6.2 billion shares, below the year’s daily average of 7.55 billion.

None of the 30 Dow components settled in the negative zone and gains were led by Alcoa, Inc. (NYSE:AA), Caterpillar Inc. (NYSE:CAT), General Electric Co. (NYSE:GE), JPMorgan Chase & Co. (NYSE:JPM) and 3M Co. (NYSE:MMM) as they increased by 2.8%, 2.0%, 1.8%, 2.2% and 1.9%, respectively.

The nation’s manufacturing sector snatched the limelight thanks to a better-than-expected report that reflected a surge in manufacturing across the country. The Institute for Supply Management’s business index or the PMI jumped 1.8% in June to 55.3%. The index had come in at 53.5% for May and the jump in June came in ahead of the consensus expectation of 51.6%. A reading above 50 suggests a general expansion and fortunately the index has remained over 50 for 23 consecutive months. The natural disaster that struck Japan in March had disrupted supply dynamics. However, the higher reading for June now suggests a recovery in the nation’s manufacturing sector.

Other economic reports that were released on Friday, ahead of the holiday on Monday reflected lingering weaknesses in the economy, but could do little to dent the markets as investors chose to focus on the positives. The University of Michigan said consumer sentiment has fallen to 71.5 from a previous reading of 74.3 in May.

Separately the U.S. Census Bureau of the Department of Commerce reported a decline in construction spending for May. The report stated: “that construction spending during May 2011 was estimated at a seasonally adjusted annual rate of $753.5 billion, 0.6 percent (±1.6%)* below the revised April estimate of $757.9 billion. The May figure is 7.1 percent (±1.8%) below the May 2010 estimate of $811.2 billion”.

The automobile segment enjoyed a rebound in sales numbers with General Motors Company (NYSE:GM) and Ford Motor Co. (NYSE:F) both reporting a 10% jump in their sales figures on a yearly basis. Shares of the companies climbed 0.7% and 1.7%, respectively. Other automobile stocks like Toyota Motor Corp. (NYSE:TM), Honda Motor Co., Ltd. (NYSE:HMC) and Tata Motors Ltd. (NYSE:TTM) jumped 1.3%, 0.9% and 1.7%, respectively.

ALCOA INC (AA): Free Stock Analysis Report

CATERPILLAR INC (CAT): Free Stock Analysis Report

FORD MOTOR CO (F): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

HONDA MOTOR (HMC): Free Stock Analysis Report

JPMORGAN CHASE (JPM): Free Stock Analysis Report

3M CO (MMM): Free Stock Analysis Report

TOYOTA MOTOR CP (TM): Free Stock Analysis Report

TATA MOTORS-ADR (TTM): Free Stock Analysis Report

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