The Dow Jones Industrial Average (DJIA) gained 0.2% to end at 12,400.03, recording its highest close since June 5, 2008. The Standard & Poor 500 (S&P 500) gained 0.1% while the Nasdaq lost 0.1% to close at 1,332.87 and 2,789.19, respectively. The fear gauge, CBOE Volatility Index (VIX) rose above 17 and composite volumes on the New York Stock Exchange remained tight at a mere 3.2 billion shares. On the NYSE, advancers outpaced decliners by a ratio of 8:7.
The lack of major news events was not the only reason for a lackluster day of trading with tight volumes as investors prefer to wear a cautious hat ahead of the earnings season. The trend of low volumes has now continued for over a week. While market volatility arising out of concerns over global issues was considered to be a major reason for this phenomenon earlier, the upcoming earnings season now stands to blame. The earnings season, officially slated to kick-start next week, will play a bigger role in determining market movement after several signs of an improving economy. As global issues such as Middle East unrest, Japan nuclear crisis and worries over euro-debt created major concerns, the markets still managed a steady recovery with indices crossing psychological marks and hitting new highs.
On the international front, it is likely that the European Central Bank will raise rates by 25 basis points when it meets for its policy meeting this Thursday. This move is a consequence of the inflationary pressures in the zone and the hike will pull up rates from record low levels. The key policy rate will still dwell below an inflation reading which had surged to hit a 29-month high of 2.6% in February. With the implementation of the monetary policy, reserves with banks will rise and purchasing power will automatically decline, which in turn is expected to lessen inflationary woes. The euro-zone debt crisis had jolted the US markets late-last year and what happens in the euro-zone has affects the indices to a certain extent.
Ensuing violence in Libya kept investors on the edge and crude-prices jumped up, for the second-consecutive trading day, to a 30-month high. Crude prices for May delivery, on the New York Mercantile Exchange gained 53 cents to settle at $108.47 per barrel, its highest close since September 2008.
The tech sector weighed heavy on indices and prevented the markets from posting a better finish. Technology analyst firm Gartner reported a 143% rise in global spending on semiconductor capital equipment in 2010. Nonetheless, the firm stated possibilities of sales figures being affected by the natural disaster in Japan. Klaus Rinnen, analyst at Gartner said: “Clearly, there are some materials supply challenges ahead of the industry in the aftermath of the tragic events in Japan.” “The industry still faces challenges in the coming months,” he added. Meanwhile, the Semiconductor Industry Association said sales in the chip industry declined to $25.2 billion in February from $25.5 billion in January, this year. Tech indexes moved lower as the Philadelphia Semiconductor Index shed 0.9% and the tech-laden Nasdaq Composite Index also felt the pinch. Stocks of Intel Corporation (NASDAQ:INTC - Analyst Report), NVIDIA Corporation (NASDAQ:NVDA - Analyst Report), Apple Inc. (NASDAQ:AAPL - Analyst Report), Advanced Micro Devices, Inc. (NYSE:AMD - Analyst Report), Dell Inc. (NASDAQ:DELL - Analyst Report), and Hewlett-Packard Company (NYSE:HPQ - Analyst Report) shed 1.2%, 3.6%, 1.0%, 3.1%, 0.6% and 1.6%, respectively.
However, after the closing bell, some shares in the tech sector moved up after Texas Instruments Inc. (NYSE:TXN - Analyst Report) agreed to buy National Semiconductor Corporation (NYSE:NSM - Analyst Report). Texas Instruments agreed to acquire National Semiconductor for $25 per share in a cash deal worth $6.5 billion. Share prices of Texas Instruments slid 1.6% after the closing bell but prices of National Semiconductor sky-rocketed 72.7%. Share prices of rival chipmakers guided up, including ON Semiconductor Corp. (NASDAQ:ONNN - Analyst Report), Maxim Integrated Products Inc. (NASDAQ:MXIM - Analyst Report), Linear Technology Corp. (NASDAQ:LLTC - Analyst Report), Analog Devices Inc. (NYSE:ADI - Analyst Report), Atmel Corporation (NASDAQ:ATML - Analyst Report) and Intersil Corporation (NASDAQ:ISIL - Snapshot Report) and they gained 5.5%, 5.1%, 2.8%, 4.4%, 3.0% and 8.1%, respectively. These gains came in after the bell and all of these shares traded in the red till the end of the trading hours.
Among stocks in focus for the day, the gainers included Mosaic Co., Molycorp, Inc., Sprint Nextel Corp. and Ford Motor Co. and they gained 2.6%, 12.1%, 1.3% and 2.6%, respectively. For the latest updates PRESS CTR + D or visit Stock Market news Today
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