For the week, that ended on Friday, 09 December 2011, Dow ended higher by 164.84 points, or 1.4% to end at 12,184.26. The Nasdaq gained 19.92 points or 0.8% to end at 2646.85. The S&P 500 gained 10.91 points (0.9%) to end at 1,255.19.
Action this week began with a solid gain on Monday, when traders took encouragement from a decline in the borrowing costs of Italy and Spain after Italy unveiled a new austerity plan. It was also learned that the ECB intends to inject one trillion euros for use in additional bond buying. Reports that Germany's Merkel and France's Sarkozy were making concerted efforts to lead Europe through its crises were also taken positively, although analysts at S&P put Germany and France on "creditwatch negative," while also placing all 17 euro nations on ratings downgrade watch.
Mid-week trade kept stocks mired near the neutral line as participants were reminded about the headline risk associated with Europe when it was learned that analysts at S&P were focusing on the European Union's top-notch credit rating. News that the ECB will extend collateral eligibility to asset-backed securities was overshadowed.
Among economic data expected during the week, little was made of the November ISM Services Index, which eased to 52.0 from 52.9 in the prior month. Initial jobless claims totaled 381,000, which is less than the 395,000 initial claims had been widely expected.
U.S. stocks closed substantially higher on Friday, 09 December 2011 as European leaders agreed to closer fiscal ties and U.S. consumer confidence hit a six-month high. Logging a second consecutive week of gains, the Dow Jones Industrial Average rose 186.56 points, or 1.6%, to finish at 12,184.26 on Friday. The Nasdaq Composite advanced 50.47 points, or 1.9%, to 2,646.85. The S&P 500 Index added 20.84 points, or 1.7%, to 1,255.19 with financial companies pacing the gains among its 10 major industry groups. Twenty-nine out of thirty Dow components ended higher led by GE and Caterpillar. Du Pont was the sole Dow loser.
Although buying was broad based, financials spent most of the session out in front of the rest of the market. The sector settled the session higher with help from banking plays and diversified financial institutions.
General Electric was a leader today after the conglomerate announced a dividend increase that many took as a sign of confidence in cash flow. But other corporate news was less encouraging. Both Texas Instruments and DuPont cut their outlooks, but those reports were generally shrugged off by a market that remained fixated on the events in Europe.
Traders on Friday took early cues from Europe, where the region's major bourses bounced because of the focus on news that eurozone officials agreed to tighter fiscal controls and also to make funds available to the International Monetary Fund for use in the rapid deployment of the European Financial Stability Facility and not in the challenge of establishing changes to the eurozone treaty.
Euro-zone leaders said on Friday they will forge closer fiscal ties via an inter-governmental accord that will likely be adopted by 26 European Union nations, leaving Britain isolated as the only member to definitively refuse to participate. Given the dissension and dysfunction that has been displayed so often during recent months, the eurozone summit was generally regarded as a step in the right direction.
Economic data on Friday showed that The University of Michigan-Thomson Reuters consumer confidence index rose to 67.7 in December, compared to 64.1 in the previous month. That was the highest reading since June. Market had expected a reading of 66.1. Separately, another report showed that the U.S. trade deficit narrowed for the fourth straight month in October, bringing the trade gap down to its lowest level this year. The report showed that the nation's trade deficit narrowed 1.6% in October to $43.5 billion.
In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies dropped by about 0.11%.
Precious metals ended higher on Friday, 09 December 2011 at Comex. Gold prices ended marginally higher while silver ended substantially higher. A weak dollar helped prices go up. Despite Friday's gains, bullions registered weekly losses. Gold for February delivery ended higher by $3.4 or 0.2%, to end at $1,716.8 an ounce on the Comex division of the New York Mercantile Exchange on Friday. For the week, gold lost 2%. On Friday, silver prices for March delivery rose $0.71 or 2.3% to end at $32.25. For the week, silver lost 1.3%.
Crude prices ended higher on Friday, 09 December 2011 at Nymex. Prices oscillated between small gains and losses for the entire day. Mixed economic data and weak dollar impacted prices throughout the day. But crude ended lower on a weekly basis. Light and sweet crude for January delivery rose $1.07 (1.1%) to $99.41 a barrel on the New York Mercantile Exchange on Friday. For the week, crude lost 1.5%.
For every stock falling nearly six gained on the New York Stock Exchange, where 819 million shares traded by the close on Friday.
Indian ADRs ended higher on Friday. In the IT space, Infosys ended up 3.7% at $52.49, Patni ended up 1.2% at $17.20 and Wipro ended up 1.8% at $10.46. In the telecom space, Tata Communication ended up 2.6% at $18.04. In the Banking space, ICICI Bank was unchanged at $28.33. HDFC Bank closed up 1.4% at $28.26. In the other space, Tata Motors closed up 2.68% at $7.53.
For the year till date, the Dow is trading higher by 5.2%. The Nasdaq and S&P 500 are lower by 0.2% each till date.
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