(AAPL) Stock Market News for October 7, 2011 – Market News

Markets experienced a third consecutive day of gains on Thursday, backed by hope among investors that steps were being taken to contain the European crisis. The new confidence among investors is a result of speculation that the president of European Commission has asked member nations to recapitalize their banks.

The Dow Jones Industrial Average Index (DJIA) gained 1.68% to close at 11,123.33 while the Standard & Poor Index (S&P 500) gained 1.83% to close at 1.164.97. The Nasdaq Composite Index surged 1.88% to close at 2,506.82. The fear-gauge CBOE Volatility Index (VIX) closed below 37. Consolidated volumes on the New York Stock Exchange (NYSE), AMEX and Nasdaq was 9.14 billion shares, exceeding the year’s daily average of 8.02 billion shares. For every 11 stocks on the NYSE that gained 2, declined while for every three stocks that gained one declined on the Nasdaq.

European Commission president Jose Manuel Barroso has urged member nations to recapitalize their regional banks, a key factor which drove the markets up on Thursday. Meanwhile, ECB President Jean Claude Trichet said the ECB would continue its bond buying program and provide loans in order to maintain liquidity in banks. During a news conference, German chancellor Angela Merkel stated that Europe must not hesitate in recapitalizing its banks in order to prevent the crisis from gaining strength. News concerning the European crisis has kept investors jittery of late and was primarily responsible for the fall of the S&P 500 into bearish territory on Tuesday. The index fell to a thirteenth month low of 1,075 but has since moved up 8.4%.

Financial stocks led the gains on the Street on Thursday with Morgan Stanley (NYSE:MS), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS) and Regions Financial Corp (NYSE:RF) advancing 4.83%, 8.84%, 5.30%, 3.86% and 9.91% respectively. The Financial Select Sector SPDR ETF, responsible for tracking of financial stocks on the S&P 500 Index had increased by 3.1% at the end of the day. The KBW Bank ETF was also up by 4.5%.

Most tech sector stocks recorded gains while Apple’s (Nasdaq:AAPL) declined on news of the death of co-founder Steve Jobs. Apple fell 0.23% while Google (Nasdaq:GOOG), Hewlett- Packard Company (NYSE:HPQ), Microsoft (Nasdaq:MSFT), Oracle (Nasdaq:ORCL) and Nvidia Corp (Nasdaq:NVDA) gained 1.98%, 4.99%, 1.74%, 1.90% and 3.97%.

In economic news, the Commerce department reported that jobless claims rose to 401,000 last week, increasing by 6,000 from the earlier week. However, this was well below the consensus estimate of 410,000 and is being seen as a sign of hope for the struggling economy. The 400,000 mark is viewed by analysts as an indication that companies may be slowing down the rate of job cuts. According to the report: “In the week ending October 1, the advance figure for seasonally adjusted initial claims was 401,000, an increase of 6,000 from the previous week’s revised figure of 395,000. The 4-week moving average was 414,000, a decrease of 4,000 from the previous week’s revised average of 418,000”. This follows Wednesday’s data from Automatic Data Processing, Inc. (NASDAQ:ADP) showing that US companies added 91, 000 jobs for the month of September, exceeding consensus projections of 75,000. Investors now eagerly await payroll data due tomorrow on the back of these two positive reports.

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