(AA) Stock Market News for October 12, 2011 – Market News

On Tuesday, markets ended mixed after trading in a tight range throughout the day, as investors anxiously waited for Slovakia’s vote for or against bolstering Europe’s financial rescue plan. Investors also eagerly awaitedAlcoa’s quarterly results, which would kick-start the third quarter earnings season.

The Dow Jones Industrial Average (DJIA) fluctuated between small gains and losses to finally end at 11,416.3, dropping roughly 0.2%. The Standard & Poor 500 (S&P 500) declined by less than 0.1% to finish the day at 1,195.54. The Nasdaq Composite Index gained 0.7% to close at 2,583.03. The fear-gauge CBOE Volatility Index (VIX) hovered below 33. Advancers outnumbered the decliners on the NYSE by a ratio of 2,199 to 1,719.

The 17-point movement for the Dow was in stark contrast to the blue-chip’s recent trend of a three-digit movement on most occasions. The Dow traded in its narrowest range since July 20, moving within 82 points. Even on Monday, the Dow registered a three-digit movement after it soared 330 points, boosted by encouraging European cues, and none of its 30 components suffered losses. However, on Tuesday decliners outnumbered advancers with 17 stocks settling on the losing side and two stocks, General Electric Co. (NYSE:GE) and JPMorgan Chase & Co. (NYSE:JPM), ending flat. Leading the decliners were Chevron Corp. (NYSE:CVX), Walt Disney Co. (NYSE:DIS), International Business Machines Corp. (NYSE:IBM), Merck & Co. Inc. (NYSE:MRK), AT&T, Inc. (NYSE:T), The Travelers Companies, Inc. (NYSE:TRV) and Verizon Communications Inc. (NYSE:VZ) as they dropped 0.6%, 1.2%, 0.9%, 1.3%, 1.4%, 1.3% and 1.1%, respectively.

Trading was restricted to a tight range as investors awaited a key-decision from Slovakia to vote for or against expanding powers of the eurozone bailout fund. It was a key decision as it would determine the fate of the latest attempt to find a resolution to the region’s debt crunch. One of the poorest euro members, Slovakia was the last among Euro nations to vote on the issue. Last month, the other euro nations including Finland and Germany had voted in favor of strengthening the European Financial Stability Facility (EFSF), which is emerging as a significant tool to fight the Greece debt crisis. In late September, the Bundestag or the lower house in the German legislature voted to nearly double Germany’s guarantees to the EFSF to €211 billion, or $373 billion. This was after Finland’s parliament had approved the proposal, reducing some of the uncertainty over the debt crisis which has been dogging financial markets since late July.

Ahead of the Slovakian vote, Jean-Claude Trichet, European Central Bank chief urged that “clear decisions” were urgently required “to cope with a systemic crisis of which we are at the epicentre”. He also said: “The crisis is systemic and must be tackled decisively…The high inter-connectedness in the EU financial system has led to a rapidly rising risk of significant contagion. It threatens financial stability in the EU as a whole and adversely impacts the real economy in Europe and beyond”.

Even as domestic investors spent the day waiting for the outcome of the Slovakian vote, after the close of the domestic markets, it was reported that lawmakers in Slovakia had voted against boosting the European rescue fund. Slovakian political party The Freedom and Solidarity (SaS) was one of the key opponents of the bailout fund as they were against asking Slovakia’s taxpayers to pay for the debt of richer nations.

Apart from the vote regarding the EFSF, investors also eagerly awaited Alcoa, Inc.’s (NYSE:AA) quarterly results which would kick start the third quarter earnings season. However, Alcoa reported a slump in its earnings on a sequential basis after the closing bell and the stocks dropped 5.3% in after-hours trading. During the day the stocks had moved up 2.1%.

ALCOA INC (AA): Free Stock Analysis Report

CHEVRON CORP (CVX): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

GENL ELECTRIC (GE): Free Stock Analysis Report

INTL BUS MACH (IBM): Free Stock Analysis Report

JPMORGAN CHASE (JPM): Free Stock Analysis Report

MERCK & CO INC (MRK): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

TRAVELERS COS (TRV): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

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