Stock Market News for February 3, 2012

Thursday witnessed a lackluster trading session with the benchmarks hardly willing to make a move in either direction as investors waited for the government to release its nonfarm payroll data on Friday. Markets finally closed mixed, amidst a drop in initial claims and a mixed bag of earnings results. Meanwhile, social media companies showed strength as Facebook filed with the Securities and Exchange Commission (SEC) for an Initial Public Offering.

The Dow Jones Industrial Average (DJI) moved in a narrow range, gaining up to 25 and losing up to 40 points, and finally dropped 0.1% to close at 12,705.41. The Standard & Poor 500 (S&P 500) edged up 0.1% and settled hardly unchanged at 1,325.54. The tech-laden Nasdaq Composite Index was up 0.4% and finished yesterday’s trading session at 2,859.68. The fear-gauge CBOE Volatility Index (VIX) closed 3.1% lower at 17.98. Total volume on the New York Stock Exchange was 4.13 billion shares. For 55% of the stocks that gained, 41% of the stocks traded lower. The remaining 4% of the stocks were left unchanged.

The labor department had a positive report to share, as it reported a drop in initial claims. According to The U.S. Department of Labor, the advance figure for seasonally adjusted initial claims dropped by 12,000 from the previous week to 367,000 for the week ending January 28, 2012.  Initial claims showed a declining trend, and the report was all the more cheerful as the drop in jobless claims was larger than what the Street had estimated. Consensus estimates had projected the initial claims to touch 371, 000.

The jobs market undoubtedly plays a key role in shaping the economy’s health, and back-to-back positive reports on that front likely hint at an improving financial scenario. On Wednesday, the ADP National Employment Report suggested that the private sector had added 170,000 jobs in January. However, yesterday’s report could not manage to spark off a robust rally for the markets, as the investors kept waiting for non-farm payroll data from the government, scheduled for release on Friday. Despite apprehensions on this count, a Reuters survey has predicted that nonfarm payroll data is expected to log gains of 150,000 in January.

Corporate results came in mixed yesterday, thus providing little indication about the markets’ direction. While a few companies impressed, others posted disappointing results, somewhat justifying the benchmarks’ narrow trading range. However, the technology arena received a boost after QUALCOMM Incorporated (NASDAQ:QCOM - Analyst Report) came out with record-setting first-quarter fiscal 2012 results. While the company’s earnings crushed estimates, its shares hit a 12-year high and finally settled 2.0% higher at $60.73 a share. The technology sector managed to emerge as one of the strongest winners in the broader markets and the Technology SPDR Select Sector Fund (XLK) was up 0.3%. Among other tech shares, Baidu, Inc. (NASDAQ:BIDU - Snapshot Report), Sina Corporation (NASDAQ:SINA - Analyst Report), Sohu.com Inc. (NASDAQ:SOHU - Analyst Report) and NVIDIA Corporation (NASDAQ:NVDA - Analyst Report) gained 2.4%, 1.9%, 1.0% and 3.7%, respectively.

Separately, Cummins Inc. (NYSE:CMI - Analyst Report) and Kellogg Company (NYSE:K - Analyst Report) also managed to beat estimates and their shares gained 7.1% and 2.6%, respectively. Meanwhile, retailer Sara Lee Corporation (NYSE:SLE - Analyst Report) managed to sail past earnings estimates, but its revenues fell short of expectations. The company’s shares were up 4.4%. However, not all companies were as lucky with their quarterly performances and companies like Merck & Company, Inc. (NYSE:MRK - Analyst Report), The Dow Chemical Company (NYSE:DOW - Analyst Report) and Deutsche Bank AG (NYSE:DB - Snapshot Report) came out with dismal figures and their share prices dropped 0.5%, 1.2% and 0.6%, respectively. Additionally, after Abercrombie & Fitch Company (NYSE:ANF - Analyst Report) projected lower than expected earnings, the shares slumped 13.7%.

Social networking giant Facebook announced that it has completed filing with the SEC for an IPO. The company is expecting to raise up to $5 billion. Amidst this development, other social media shares managed to clock up gains and shares of Zynga Inc. (NASDAQ:ZNGA - Snapshot Report), Groupon, Inc. (NASDAQ:GRPN - Snapshot Report), LinkedIn Corporation (NYSE:LNKD - Analyst Report) and Renren Inc. (NYSE:RENN - Snapshot Report) gained 16.8%, 7.4%, 6.4% and 8.2%, respectively.

Read the full analyst report on QCOM

Read the full analyst report on BIDU

Read the full analyst report on SINA

Read the full analyst report on SOHU

Read the full analyst report on NVDA

Read the full analyst report on CMI

Read the full analyst report on K

Read the full analyst report on SLE

Read the full analyst report on MRK

Read the full analyst report on DOW

Read the full analyst report on DB

Read the full analyst report on ANF

Read the full analyst report on ZNGA

Read the full analyst report on GRPN

Read the full analyst report on LNKD