Stock Market News for December 12, 2014 - Market News

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The Dow Jones Industrial Average (DJI) added 0.4% to close at 17,596.34. The Standard & Poor 500 (S&P 500) added about 0.5% to end at 2,035.33. The tech-laden Nasdaq Composite Index closed at 4,708.16; improving 0.5%. The fear-gauge CBOE Volatility Index (VIX) moved up 8.4% to settle at 20.08. Total volume on the US exchanges was 7.2 billion shares, beating the last five session’s average of 6.9 billion. Advancers outpaced declining stocks on the NYSE. For 54% stocks that advanced, 45% declined.
 
The day’s gains were aided by encouraging economic reports. Mostly, it was better-than-expected retail sales data that helped benchmarks shake off much of the week’s dismal run. The U.S. Census Bureau announced that the advance estimates of U.S. retail and food services sales for November increased 0.7% from October to $449.3 billion in November. The 0.7% gain comfortably beat the consensus estimate of a gain of 0.4%. Also, retail sales data reflected a decent 5.1% year on year jump in retails sales, which is adjusted for seasonal variation and holiday and trading- day differences, but not for price changes.
 
Encouraging retail data helped the Consumer Discretionary Select Sector SPDR ETF (XLY) and Consumer Staples Select Sector SPDR ETF (XLP) gain 0.82% and 0.83%, respectively. Staples, Inc. (SPLS) jumped 8.7% and was the largest gainer among the S&P 500 components. Other retail stocks such as Costco Wholesale Corporation (COST), Target Corp. (TGT), Wal-Mart Stores Inc. (WMT) and Macy’s, Inc. (M) gained 0.8%, 0.9%, 1%, and 1.5%, respectively. However, utilities were the biggest gainer as Utilities SPDR ETF (XLU) improved 1%.
 
Meanwhile, the Bloomberg Consumer Comfort Index hit a seven-year high after increasing to 41.3 in the period ended Dec 7. Lower gasoline prices and improving jobs sector have been helping consumers spend more.
 
Jobs data was encouraging and helped markets move up. According to the U.S. Department of Labor, first time jobless claims for the week ending Dec 6 was 294,000, down from previous week’s 297,000. This was 3,000 lower than consensus estimate of 297,000.
 
However, benchmarks pared some of the day’s gains after US crude prices dropped again, setting another dismal record. WTI Crude Oil slumped 1.7% to settle at $59.95, its first drop below the $60 mark in five years. Meanwhile, Brent Crude Oil dropped 0.9% to $63.68 a barrel.
 
The slump in oil prices continued on intensified oversupply concerns. Oil prices had slumped significantly on Wednesday after the Organization of Petroleum Exporting Countries (OPEC) slashed its demand for oil estimates for the next year due to abundant North American output and rise in other producers. Meanwhile, Saudi Arabia’s oil minister had turned down the need for output cut.
 
The dip in crude prices dragged energy shares lower. The Energy Select Sector SPDR ETF (XLE) slipped roughly 0.1% was the only sector among the 10 S&P industry groups to end in the red yesterday. Schlumberger Limited (SLB), Occidental Petroleum Corporation (OXY), Anadarko Petroleum Corporation (APC) and Devon Energy Corporation (DVN) were among the losers and they dropped 0.2%, 0.1%, 0.5% and 1.2%, respectively.
 
Also, there were some concerns related to the future of the $1.1 trillion US spending bill, as Democrats objected to a provision to roll back part of Dodd-Frank banking reforms. This sparked fears about a possible government shutdown.