Markets posted modest gains on Friday, helped by positive economic reports that overshadowed disappointing earnings reports from bellwether stocks. The earnings season, which was unofficially kicked off by Alcoa, Inc, has been largely mixed up to now. A lot is at stake for the markets during the coming week as a significant number of companies are scheduled to report their quarterly results.
 
The Dow Jones Industrial Average (DJIA) gained 0.5% to close at 12,341.83. The Standard & Poor 500 index edged up 0.4% and ended the day at 1,319.68, while the Nasdaq closed at 2,764.65 after gaining 0.2%. However, the indices were down for the week and the Dow, S&P 500 and Nasdaq lost 0.3%, 0.6% and 0.6%, respectively. On the positive side, the CBOE Volatility Index dropped 13.60%, for the week, to an almost four-year low of 15.44. On Friday, consolidated volumes on the New York Stock Exchange, NYSE Amex and Nasdaq were 7.1 billion shares, well below last year's estimated daily average volumes of 8.47 billion. On the NYSE, advancers outnumbered declining stocks by a ratio of 2:1.
 
Among the slew of positive economic data, a survey reported that consumer sentiment has risen in April as the effects of surging crude prices have receded somewhat. According to the survey, consumer sentiment in the US escalated more-than-expected to 69.6 in April from last month’s reading of 67.5. However, crude prices are still on the higher side and ensuing violence in the Middle East or a worsening of the Japanese nuclear crisis can push prices further up. Additionally, a government report suggested inflationary pressures had eased after core inflation excluding energy and food prices came in lower than feared. According to the Labor Department, the core Consumer Price Index rose 0.1% in March as against 0.2% in both January and February of this year. A surge in food and gasoline prices drove the Consumer Price Index up by 0.5% for the month of March, in-line with expectations, marking the ninth consecutive month of gains. With inflation looking to be a lot tamer, there might not be an immediate change to the Fed’s $600 billion bond-purchase program.
 
In other news, China’s consumer price inflation increased 5.4% in March, surpassing an estimated 5.2%. This was also the fastest rate of increase since July 2008. Inflation in Europe also rose more-than-expected to 2.7% in March.
 
The Federal Reserve Bank of New York reported that the Empire State manufacturing survey had increased for the fifth straight month and general business conditions had increased to 21.7. In another report, industrial production increased by 0.8% to an index value of 93.6, higher than the expected 0.6% increase, following a 0.1% increase in February. Manufacturing output increased by 0.7% in March, marking the fourth consecutive month of strong expansion.
 
The much awaited earnings reports from Google Inc. (NASDAQ:GOOG) and Bank of America Corporation (NYSE:BAC) were disappointing, bringing no respite to investors. Though Google managed to surpass estimates, the company’s operating expenditure sky-rocketed and an increase in revenues was not strong enough to offset higher costs. Shares of Google plunged 8.3% to settle at $530.70. However, the technology sector was not dragged down by Google and EMC Corporation (NYSE:EMC), Oracle Corp. (NASDAQ:ORCL) and NVIDIA Corporation (NASDAQ:NVDA) each gained 1.1%. Shares of Marvell Technology Group Ltd. and Finisar Corp. gained 2.0% and 1.1%, respectively. On the declining side were Cisco Systems, Inc. (NASDAQ:CSCO), Dell Inc. (NASDAQ:DELL), Hewlett-Packard Company (NYSE:HPQ) and Microsoft Corporation (NASDAQ:MSFT) and they shed 0.8%, 0.2%, 0.3% and 0.2%, respectively.
 
On the other hand, Bank of America posted disappointing results and reported a fall in revenue and earnings. Reduced mortgage banking income and higher litigation expenses were also among the negatives. Shares of Bank of America Corporation dropped 2.4%. In another development, Bank of America Corporation agreed to pay Assured Guaranty Ltd. (NYSE:AGO) more than $1 billion to resolve issues related with mortgage securities. Shares of Assured Guaranty surged 24.2%, and this development also helped shares of MBIA Inc. and MGIC Investment Corp. to gain 17.4% and 2.3%, respectively.
 
Coming to the energy sector, Chesapeake Energy Corporation (NYSE:CHK) announced plans to acquire Bronco Drilling Co. Inc. (NASDAQ:BRNC) and shares of these companies rose 0.3% and 5.8%, respectively. ConocoPhillips, Exxon Mobil Corporation (NYSE:XOM), Chevron Corp. (NYSE:CVX) and Western Refining Inc. also gained 1.1%, 1.0%, 1.3% and 1.2%, respectively.
 

 
ASSURED GUARNTY (AGO): Free Stock Analysis Report
 
BANK OF AMER CP (BAC): Free Stock Analysis Report
 
BRONCO DRILLING (BRNC): Free Stock Analysis Report
 
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
 
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
 
CHEVRON CORP (CVX): Free Stock Analysis Report
 
DELL INC (DELL): Free Stock Analysis Report
 
EMC CORP -MASS (EMC): Free Stock Analysis Report
 
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
 
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
 
MICROSOFT CORP (MSFT): Free Stock Analysis Report
 
NVIDIA CORP (NVDA): Free Stock Analysis Report
 
ORACLE CORP (ORCL): Free Stock Analysis Report
 
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
 
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Bronco Drilling Company, Inc. (MM) (NASDAQ:BRNC)
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