Stock Market News for May 12, 2010 – Market News

Stocks ended a volatile session lower Tuesday as investors considered the implications of the European Union’s almost $1 trillion bailout plan announced over the weekend.  The announcement of the aid package resulted in a euphoric rally Monday but the excitement faded as worries about loan-hungry European nations’ ability to control their deficits resurfaced.  After Monday’s spectacular rally, the Dow Jones industrial average dropped 37 points, or 0.3%, to close at 10,748.26 on Tuesday.  The broader Standard & Poor’s 500 index eased about 4 points, or 0.3%, to 1,155.79, while the Nasdaq composite index ended just above unchanged.  On the New York Stock Exchange, advancing shares beat those that fell in price by a narrow margin on volume of 1.46 billion shares. Material stocks weakened on concerns that China would resort to further monetary tightening measures.  Beijing has already taken such steps as clamping down on bank lending to prevent the Chinese economy from overheating. However, investors are worried that further tightening measures would hurt demand for materials.  Shares in Alcoa (NYSE:AA) were the leading decliners among the Dow average components. After Monday’s 30% drop, the CBOE Vix, the market’s measure of volatility was almost flat.  Crude prices fell 43 cents to $76.37 per barrel on the New York Mercantile Exchange.  Treasury prices dropped, sending the yield on the 10-year note to 3.56% from 3.54% late Monday. Only seven of the thirty DJIA components closed higher on the day.  Disney (NYSE:DIS) was the leading gainer, up 1.3%, ahead of its earnings results.  The company reported estimate-beating numbers of 48 cents a share, versus Street projections of 45 cents on a 6% revenue gain, helped by box-office receipts from “Alice in Wonderland.”  However, the company appeared concerned about its theme park and resorts division.  Hewlett-Packard (NYSE:HPQ) retreated 1.4% on concerns about its reliance on international sales.  Shares in ExxonMobil (NYSE:XOM) dropped 1.2% on global demand concerns.  Merck (NYSE:MRK) fell 2.2% after it halted its first development effort in a follow-on biologic drug, seen as a rival to Amgen’s (NASDAQ:AMGN) anti-anaemia drug Aranesp. A China inflation report on Tuesday showed consumer prices jumped 2.8% in April from a year ago, the fastest pace in eighteen months, fuelling tightening concerns.  Fuel and industrial metals prices dropped on concerns such a step would impact demand.   Meanwhile, a 50-page civil complaint was filed against the Bank of NY Mellon (NYSE:BK) by the NY Attorney General Cuomo and two former officers over Madoff-related matters. A WSJ report said federal regulators may charge Morgan Stanley (NYSE:MS) with misleading investors regarding mortgage derivative products it helped create and sometimes bet against. Today’s calendar, although devoid of significant market-moving events, includes interims from such big names as Macy’s (NYSE:M) and Cisco (NASDAQ:CSCO). Zacks Investment Research

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Stock Market News for May 12, 2010 – Market News

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