(BAC) Stock Market News for January 18, 2012 – Market News

The major US indices registered gains to close in the green after a slew of positive economic reports were released at home and in China. A successful debt auction in Europe added to the cheer. However, the gains were limited, as investors’ sentiments were dampened after the banking sector incurred losses following disappointing earnings figures from Citigroup.

The Dow Jones Industrial Average (DJI) gained 0.5% to settle at 12,482.07. The blue chip index’s major decliner was JP Morgan (NYSE:JPM) which fell by 2.81% after the banking giant reported uninspiring quarterly earnings results. The Standard & Poor 500 (S&P 500) posted gains of 0.4% and closed yesterday’s trading session at 1,293.67 before touching the psychological level of 1,300 earlier during the day. Energy sector stocks gained the most. The tech laden Nasdaq Composite Index was up to 2,728.08, adding 0.6%. The fear-gauge CBOE Volatility Index (VIX) settled above 22. Total volumes on the New York Stock Exchange were 810 million shares. On the NYSE, for every 2 stocks that rose one fell. Total composite volumes were around 3.93 billion shares.

Weak earnings results from the financial sector pulled down the Financial Select Sector SPDR ETF, which measures and tracks performance of financial stocks in the S&P 500 index,  by 0.8%. The SPDR S&P Bank ETF also declined by 0.9%. Share prices of Citigroup (NYSE:C) dropped 8.2% to close at $28.22, registering its biggest drop since Oct 3. The company’s fourth quarter profit decreased 11% on a yearly basis. Both the bank’s profit and revenue came in well short of expectations amid an unsteady start to the earnings season. Last week another banking major, JP Morgan (NYSE:JPM) too missed its revenue expectations. However, shares of San Francisco based Wells Fargo & Co. (NYSE:WFC) gained marginally after the company reported higher fourth quarter earnings and also reported a rise in its income. The major financial stocks to bleed yesterday include Bank of America Corp. (NYSE:BAC), Morgan Stanley (NYSE:MS), Fifth Third Bancorp. (NASDAQ:FITB), IntercontinentalExchange Inc. (NYSE:ICE) and MetLife Inc. (NYSE:MET) which all fell by 2.2%, 2.3%, 2.1%, 3.7% and 1.7% to close at $6.48, 16.25, 13.73%, $112.15 and 34.65 respectively.

On the economic front, the Federal bank of New York released its NY Empire State Index, which reported that manufacturing in the New York region increased 13.5 against an expected increase of 11.66 in January, marking its highest rise since the month of April last year. Major economic reports scheduled for release today include PPI, Capacity Utilization, Industrial Production, NAHB housing market index and Net Foreign Purchases.

Meanwhile from the Chinese Government released encouraging data, according to which the country has registered higher than expected fourth quarter GDP growth. China’s GDP came at 8.9% beating expectations of a growth of 8.6%. Following the encouraging report, Chinese markets were up by 4-5%.

Coming to bond auction news on the European front, Spain, one of the region’s troubled nations, boosted sentiment after successful short term debt auctions. The demand for Spanish bonds was strong and yields on them were halved. Greece’s borrowing costs were also lowered after an auction, helping the European markets to close at a five month high.

Coming to individual stocks, share prices of cruise company Carnival Corporation (NYSE:CCL) fell 13.65% to close at $29.60 after one of its cruisers crashed off the coast of Italy. Separately, Morgan Stanley (NYSE:MS) downgraded the shares of the company from “overweight” to “equal-weight.” Food producer’s Kraft Foods’ (NYSE:KFT) shares gained slightly after the company said its fourth quarter earnings figures will come in above previously forecasted estimates. Meanwhile the company plans to slash 1,600 jobs. BlackBerry maker Research In Motion’s (NASDAQ:RIMM) share prices surged 8.0% following market rumors that the company may sell one of its divisions. Share prices of retailer Sears Holding (NASDAQ:SHLD) advanced 9.5% to close at $36.75 following rumors that the company may go private. These speculations have arisen after the Chairman of Sears, Mr. Eddie Lampert added shares worth $130 million to his personal holding.

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

CITIGROUP INC (C): Free Stock Analysis Report

CARNIVAL CORP (CCL): Free Stock Analysis Report

FIFTH THIRD BK (FITB): Free Stock Analysis Report

INTERCONTINENTL (ICE): Free Stock Analysis Report

JPMORGAN CHASE (JPM): Free Stock Analysis Report

KRAFT FOODS INC (KFT): Free Stock Analysis Report

METLIFE INC (MET): Free Stock Analysis Report

MORGAN STANLEY (MS): Free Stock Analysis Report

RESEARCH IN MOT (RIMM): Free Stock Analysis Report

SEARS HLDG CP (SHLD): Free Stock Analysis Report

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

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