US Stocks Week Ended December 2, 2011

Domestic markets had their strongest week since 2009, driven by a concerted effort from the world's central bankers and Europe's leaders to reduce the cost of borrowing for European banks. In Asia, Chinese central bankers acted similarly by reducing reserve requirements in an effort to loosen monetary policy and stimulate the Chinese economy. But perhaps the best news occurred domestically when it was announced the US jobless rate dropped to 8.6% in November from 9.0%. On Wednesday alone, the Dow Jones Industrial Average soared almost 500 points. Several companies also reported positive news, Amazon announced that it sold more than four times as many e-readers as it did during last year's Black Friday. Amazon shares advanced over 6% in response to the news. Jewelry maker, Tiffany & Co. reported increased revenue of over 20% from last year. However, shares declined 8.69% when company management reduced earnings guidance for 2012. On Tuesday, the parent of American Airlines, AMR Corp. filed for bankruptcy causing shares to collapse, falling almost 80% on the day. Kohl's shares disappointed when management announced surprisingly weak same store sales figures of -6.2% when a 2% gain was expected. Also on Thursday, Disney announced a 50% increase of their dividend per share. The company will pay out $.60 per share next year. Teen apparel retailer, Zumiez, announced surprisingly good third quarter EPS, causing shares to surge 24.5% on Friday. Finally, it was reported Facebook may come to the market in 2012 issuing $10 billion of shares which would value the company at approximately $100 billion. Focusing on next week, the European Central Bank is expected to cut interest rates by a quarter percentage point. Congress will hold hearings exploring legislation on preventing insider trading by members of Congress and Greece's Parliament will vote on a budget for 2012.
Posted on Monday, December 5, 2011 @ 8:46 AM

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.