Indices hold gains even as euro falls
MAJOR US stock indices were little changed in a low-volume session yesterday, but some investors were encouraged to see equities avoid a sell-off amid lingering Eurozone debt problems.
Indices held on to the previous day’s large gains even as the euro dropped sharply against the dollar. Notably, US banks held up well, even though bad news in Europe centered around the difficulties for some European lenders.
A gauge of European bank shares dropped 1.6 per cent, but in New York the KBW bank index added 0.34 per cent.
“Some of what’s been going on in the last weeks is the US starting to delink from Europe,” said Jim Paulsen, chief investment officer at Wells Capital Management.
“Not that we’ve totally isolated ourselves, but the fact you’re seeing more days when the euro is off and the market here is up is evidence of some delinking,” he said. “If the US economy is growing again, it’s much less vulnerable to external shocks.”
Investors were encouraged by a sharp rise in new orders for US factory goods in November – further evidence the economy is recovering.
The Dow Jones industrial average gained 21.04 points, or 0.17 per cent, to 12,418.42. The S&P 500 Index edged up 0.24 points, or 0.02 per cent, to 1,277.30. The Nasdaq Composite dipped 0.36 points, or 0.01 percent, to 2,648.36.
US new vehicle sales released yesterday showed automakers ended the year with strong sales, but they forecast lower growth in 2012.
GM shares rose 0.5 per cent to $21.15, while Ford added 1.5 percent to $11.30.
Netflix Inc, down more than 60 per cent last year, led consumer stocks higher with a 11.4 per cent rise to $80.45. The S&P consumer discretionary sector rose 0.7 per cent.
Yahoo Inc shares fell 3.1 per cent to $15.78 after it named PayPal president Scott Thompson as its chief executive, taking over on 9 January from interim chief executive Tim Morse, who will resume his role as chief financial officer.
AT&T agreed on Tuesday to pay TiVo a minimum of $215m and additional monthly licensing fees to settle a patent infringement dispute. AT&T shares gained 0.2 per cent to $30.43, and TiVo jumped 10.1 per cent to $9.82.
On the New York Stock Exchange 1,541 issues declined and 1,465 advanced, and on Nasdaq 1,521 declined and 963 advanced.