(BAC) Stock Market News for August 23, 2011 – Market News

Markets lacked the conviction to bet big leading to a flat finish for the benchmarks on Monday. A choppy day of trading was initially spurred by hopes that the Fed chairman would announce another asset-buying plan on Friday, but lingering concerns about the domestic and global financial situation ensured the indices ended flat.

The Dow Jones Industrial Average (DJIA) gained 0.3% to settle at 10,854.65. The Standard & Poor 500 (S&P 500) moved up 0.02% to close at 1,123.82, and 6 of its 10 industry groups registered gains. The Nasdaq Composite Index climbed 0.2% to finish the day at 2,345.38. The fear-gauge CBOE Volatility Index (VIX) traded roughly over 42. On the New York Stock Exchange, consolidated volumes were 4.8 billion shares. Advancers were outnumbered by the declining stocks on the NYSE, as for every two stocks that gained, three stocks were on the declining side.

It was another day of wild swings for the Dow as it jumped 200 points in the opening session but ended with an overall gain of only 37 points. The encouraging start of the blue-chip index was soon reduced to a mere 2-point gain ahead of the afternoon session and then the index again gained 100 points. The Dow, as well as the broader markets, had experienced wild swings during the first half of the month and the Dow had even registered a movement of 400+ points consecutively for four days.

In fact, seven of the thirty Dow components had to settle in the red zone with Bank of America Corporation (NYSE:BAC) ending up as the biggest laggard as it plunged 7.9%. Interestingly, a similar 7 to 23 ratio had emerged yesterday, but on the contrary those 7 stocks were the gainers. Among the individual components, Hewlett-Packard Company (NYSE:HPQ) led the race among the gainers and it surged 3.6%. It is worth noting that HP had suffered the most yesterday among the Dow components after it sank 20%. While, the 20% fall of the tech-giant’s stock was spurred by the company’s announcement that it was considering the possibility of spinning-off its PC business, yesterday’s gains were sparked after the company revealed a new desktop and cut its TouchPad tablet’s price.

Meanwhile, markets anxiously await the announcement of another asset purchase program when the Federal Reserve Chairman Ben Bernanke walks up to deliver his speech at the central bank’s annual conference in Jackson Hole, Wyoming. The economy has been faltering for a prolonged period now, with no encouraging economic reports and uncertainty about the financial situation weighing heavily on the markets. Global conditions have combined with domestic recessionary fears to severely dampen investor sentiment. Investors are hopeful that the bond-buying plan will give a boost to the financial markets. It was August last year when Bernanke had actually laid the foundation for the $600 billion bond-buying plan known as the QE2. The second round of stimulus had provided sufficient stimulus to the markets until its scheduled end.

Earlier this year, unrest in the oil-rich Persian Gulf nations had dented the markets for a considerable period. Much of the damage was brought about by the ensuing violence in Libya, a country which accounted for almost 2% of the global oil output. The agitation against estranged Libyan leader Muammar Gaddafi ultimately resulted in a positive outcome for the rebels as the protestors took over the majority of Tripoli and media reports stated that Gaddafi has disappeared while his two sons have been captured. This led to a drop in Brent crude as it was expected that Libya would now resume oil exports. On the New York Mercantile Exchange, crude for September delivery jumped 2.3% and settled at $84.12 per barrel.

Among the stocks in the energy sector, Exxon Mobil Corporation (NYSE:XOM), Marathon Oil Corporation (NYSE:MRO), Royal Dutch Shell plc (NYSE:RDS-A) and Sunoco, Inc. (NYSE:SUN) gained 0.5%, 0.5%, 2.2% and 0.9%, respectively. Among the decliners were Western Refining Inc. (NYSE:WNR), ConocoPhillips (NYSE:COP), Murphy Oil Corporation (NYSE:MUR) and Transocean Ltd. (NYSE:RIG) and they were down 4.1%, 0.4%, 1.7% and 2.0%, respectively.

The banking sector was one of the biggest laggards and bellwethers suffered significant losses. Apart from Bank of America, as mentioned earlier, financial stocks like JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup, Inc. (NYSE:C) and The Goldman Sachs Group, Inc. (NYSE:GS) dropped 2.7%, 2.0%, 2.7% and 4.7%, respectively.

Only one economic report was released on Monday which showed that the Chicago Fed National Activity Index for July has moved up to -0.06. However, the index is still in the negative zone and this was also the fourth consecutive month that the index has stayed negative.

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JPMORGAN CHASE (JPM): Free Stock Analysis Report

MARATHON OIL CP (MRO): Free Stock Analysis Report

MURPHY OIL (MUR): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

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