(BAC) Stock Market News for January 23, 2012 – Market News

Strong corporate results helped lift the Dow higher to a six month high, while the S&P 500 registered frugal gains. Meanwhile, an earnings miss by Google weighed down the Nasdaq Composite Index. Nonetheless, the markets managed to end another week with gains and each benchmarks moved up by over 2%.

The Dow Jones Industrial Average (DJI) added 0.8% to finish the day at 12,720.48. The Standard & Poor 500 (S&P 500) was up 0.07% to end almost unchanged at 1,315.38. The tech-laden Nasdaq Composite Index missed out on a seat in the green and dropped 0.06% to settle at 2,786.70.The fear-gauge CBOE Volatility Index (VIX) dropped down to 18.28. Total volume on the New York Stock Exchange (NYSE) was 3.96 billion shares. For 56% of the advancing stocks on the NYSE, 40% of the stocks moved down. The remaining 4% of the stocks were left unchanged.

Markets failed to score big gains on Friday, but that could not stop the benchmarks from posting a week of strong gains. The Dow, S&P 500 and Nasdaq gained 2.4%, 2% and 2.8%, respectively, for the week. The weekly gains came on the back of strong economic data with some help from encouraging corporate results. These reports included a better-than-expected housing report from the National Association of Home Builders (NAHB). Additionally, the Federal bank of New York reported improved manufacturing conditions in the New York region with its general economic index increasing to 13.5, the highest increase since April last year. Also lifting the mood was the fact that initial claims had dropped to their lowest levels in almost four years. Among the bellwethers, Goldman Sachs (NYSE:GS), Bank of America Corporation (NYSE:BAC) and Morgan Stanley (NYSE:MS) reported encouraging results that helped the benchmarks move higher.

On Friday, International Business Machines (NYSE:IBM) and Microsoft Corporation (NASDAQ:MSFT) both boosted sentiment after reporting encouraging earnings results. IBM not only reported better-than-expected results but also said that it expects 2012 earnings to surpass expectations. Microsoft reported higher sales and expects lower operating expenses for 2012. Shares of IBM and Microsoft gained 4.4% and 5.7%, respectively. Separately, Intel Corporation (NASDAQ:INTC) also reported strong results and its shares jumped 2.9%.

However, after the closing bell on Thursday, Google Inc. (NASDAQ:GOOG) came out with its numbers, which were a big disappointment. Both its revenues and earnings failed to match up to the Street’s expectations. Retail ads during the holiday season were expected to boost Google’s results, but below-than-expected performance in the fourth quarter with non-operating losses offset the increase in revenues. Google’s dismal and rare earnings miss weighed on the sentiment on Friday and the company’s shares dropped 8.4%, which also slightly limited the day’s overall gains and kept the Nasdaq away from the positive zone.

Coming to economic data, existing home sales climbed to an 11-month high, rising for the third-consecutive month. According to the National Association of Realtors: “…total existing-home sales1 rose 5.0 percent to a seasonally adjusted annual rate of 4.61 million in December from a downwardly revised 4.39 million in November, and are 3.6 percent higher than the 4.45 million-unit level in December 2010”. The chief economist of NAR, Lawrence Yun, sounded upbeat as he said: “The pattern of home sales in recent months demonstrates a market in recovery…“Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”

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