(XLF) Stock Market News for August 12, 2011 – Market News

Wall Street’s volatile run continued on Thursday as encouraging economic data eroded fears of a possible recession at least for the moment, and the markets moved upwards. The Dow created history with its largest one-day percentage moves over the past four sessions, as it went up 423 points just a day after it was down more than 500 points. While a positive jobs report gave an additional boost to sentiment, Cisco also joined the party with its robust quarterly results.

The Dow Jones Industrial Average (DJIA) soared 3.9% to close the day at 11,143.31. The Standard & Poor 500 (S&P 500) jumped 4.6% to close at 1,172.64 and the Nasdaq Composite Index shot up 4.7% to finish the day at 2,492.68. The fear-gauge CBOE Volatility Index sank 9.3%. It was yet another busy day on the New York Stock Exchange, NYSE Amex and Nasdaq, with consolidated volumes totaling 12.99 billion shares, compared with the year’s estimated daily average of 7.8 billion. On the NYSE, for every 12 stocks that jumped up, only one stock was on the losing side.

This highly volatile run of the markets has etched its name in the record books, as the Dow has never ever seen this amount of one-day percentage moves in the last four trading days. This was the blue-chip index’s fourth straight day of over 400-points of movement, including the 423 points movement on Thursday. While some preferred to call it a game of basketball, some opined it was a bungee jump, and a few even thought the week’s movement had a ‘touch off an investor stampede’. The Dow gained 3.9% yesterday, sank 4.6% on Wednesday, climbed 4% on Tuesday, and had plunged 5.6% on Monday. Over the same period, the S&P 500 moved up 4.6%, down 4.4%, again rose 4.7% and sank 6.7% a day before that. The Nasdaq gained 4.7% yesterday, lost 4.1% on Wednesday, jumped 5.3% on Tuesday and had plunged 6.9% on Monday.

As for the sectors, the financial sector has also had a volatile run, swinging between losses and gains over the past few trading days. On Thursday, the Financial Select Sector SPDR (XLF) fund moved up 5.6%. Among the gainers in the sector were The Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), Citigroup, Inc. (NYSE:C) and Wells Fargo & Company (NYSE:WFC) and they moved up by 7.0%, 6.8%, 7.1%, 6.3% and 6.2%, respectively.

The markets have been responding to every development, good or bad, resulting in extremely wide swings. Luckily for the benchmarks, reports that came in yesterday lifted sentiment, and staying true to the trend the investors did take the benchmarks soaring higher. Most importantly, it was jobs data that significantly boosted the sentiment, reflecting lesser initial jobless claims and eliminating fears of an economic downturn temporarily. Additionally, corporate results, which have been highly subdued by the other major happenings this season, came in strongly and added to the cheer.

As for the jobs data, the U.S. Department of Labor reported: “In the week ending August 6, the advance figure for seasonally adjusted initial claims was 395,000, a decrease of 7,000 from the previous week’s revised figure of 402,000. The 4-week moving average was 405,000, a decrease of 3,250 from the previous week’s revised average of 408,250”. This also came in much lower than the consensus of 414, 000 initial jobless claims. THE jobs market is a highly significant indicator of economic conditions and with such lesser jobless claims, especially amid fears of a possible downturn, this surely was a huge boost to the sentiment.

Joining the party was quarterly results from tech bellwether Cisco Systems, Inc. (NASDAQ:CSCO). The world’s largest maker of computer equipment reported better-than-expected results and surged 16.0%. Additionally, NVIDIA Corporation (NASDAQ:NVDA) sprung 8.7% after it announced a higher-than-expected revenue forecast. Other tech shares like Advanced Micro Devices, Inc. (NYSE:AMD), Intel Corporation (NASDAQ:INTC), Broadcom Corp. (NASDAQ:BRCM) and Dell Inc. (NASDAQ:DELL) gained 5.5%, 4.2%, 5.6% and 7.8%, respectively.

ADV MICRO DEV (AMD): Free Stock Analysis Report

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CITIGROUP INC (C): Free Stock Analysis Report

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WELLS FARGO-NEW (WFC): Free Stock Analysis Report

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