(XLE) Stock Market News for January 9, 2012 – Market News

The fact that the US unemployment rate has dropped to its lowest level since February 2009 failed to spark a rally on Friday. European concerns weighed on sentiment to drag the benchmarks marginally lower. However, the first week of 2012 ended on a positive note amidst a slew of encouraging economic reports,

On Friday, the Dow Jones Industrial Average (DJIA) dropped 0.5% to close the day at 12,359.92. The Standard & Poor 500 (S&P 500) was down 0.3% and closed Friday’s trading session at 1,277.81. However, the tech-laden Nasdaq Composite Index registered gains of 0.2% and finished at 2,674.22. The fear-gauge CBOE Volatility Index (VIX) reflected subdued fears, dropping almost 4% to close at 20.63. Consolidated volumes on the New York Stock Exchange, the Nasdaq and Amex were roughly 6.3 billion shares, substantially lower than last year’s daily average of 7.84 billion shares. On the NYSE, for every seven stocks that gained, eight stocks were on the declining side.

Late-December’s slew of economic reports had sparked a ‘Santa’ rally that ultimately led to the S&P 500 ending the year on a positive note and Dow extended its yearly gains. The first week of 2012 was also witness to strong US economic data, lifting the benchmarks to a green finish in the first week of the year. Labor, housing and ISM data were all positive through the week and the Dow, S&P 500 and Nasdaq ended the week after gaining 1.2%, 1.6% and 2.7%, respectively. Through the week, investor mood displayed declining anxiety as the fear-gauge index, or, VIX, dropped 12% for the week.

On Friday as well, the economy had good news to share with the investors, with the unemployment rate declining to its lowest level since February 2009. The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment increased 200,000 in December 2011, and the unemployment rate declined to 8.5% from the revised figure of 8.7% posted in November 2011.

However, this report failed to overshadow lingering European concerns. The euro continued its slide with sovereign funding remaining a major concern, falling below $1.27. It was for the first time since September 2010 that the euro slid below that level. Meanwhile, borrowing costs of Italy continued to tread around levels considered ‘unsustainable’. Italy’s 10-year yield hovered around 7.1%. A figure of 7% or higher is considered a very risky affair for any of these nations and Ireland and Portugal both had to seek rescue funds when their borrowing costs crossed the 7% mark.

For the week, the KBW Bank Index (BKX) had gained 5.7%, but on Friday it declined by 0.3%. Among the financial stocks, Bank of America Corporation (NYSE:BAC), The Goldman Sachs Group, Inc. (NYSE:GS), Morgan Stanley (NYSE:MS), American Express Company (NYSE:AXP) and U.S. Bancorp (NYSE:USB) declined 2.1%, 1.2%, 2.3%, 1.1% and 0.8%, respectively.

The energy sector was also under some pressure on Friday and the Energy Select Sector SPDR (XLE) fund was down 0.6%. Energy stocks like Transocean Ltd. (NYSE:RIG), Schlumberger Limited (NYSE:SLB), Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP) and Exxon Mobil Corporation (NYSE:XOM) dropped 1.1%, 0.4%, 0.7%, 0.8% and 0.8%, respectively.

AMER EXPRESS CO (AXP): Free Stock Analysis Report

BANK OF AMER CP (BAC): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

CHEVRON CORP (CVX): Free Stock Analysis Report

GOLDMAN SACHS (GS): Free Stock Analysis Report

MORGAN STANLEY (MS): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

SCHLUMBERGER LT (SLB): Free Stock Analysis Report

US BANCORP (USB): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

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