The stock markets in the United States recorded gains and ended the five consecutive days of declines on Friday. Investors seem to be becoming more comfortable with the idea that the Federal Reserve will soon taper its quantitative easing given the continued improvement of the economy.
The latest employment data from the Department of Labor showed that the economy added 203,000 jobs for the month of November. The figure is higher than the 185,000 jobs figure that was the average estimate of economists surveyed by Bloomberg.
A separate report yesterday indicated that the U.S. gross domestic product (GDP) in the third quarter climbed 3.6%, higher than the initial estimate of 2.8%. The Federal Reserve Beige Book showed that the pace of economic growth was moderate.
Commenting on the movement of the markets today, Jim Russell, senior equity strategist at U.S. Bank Wealth Management told Bloomberg, “It appears that the market is getting increasingly comfortable with a taper scenario that parallels an incrementally stronger economy. The higher number could more easily be accepted because the market had traded down, anticipating what was likely to be a stronger number today, and of course we got that.”
Today, the Thomson Reuters/University of Michigan preliminary consumer sentiment index for December increased from 75.1 to 82.5 points. The average estimate of economists was 76 points.
Bill Gross, founder and managing director of PIMCO opined that there is a 50% chance for the Federal Reserve to start tapering its $85 billion bond-buying program. He said, "It’s at least 50-50 now. There was some logic for a January starting point, but it’s clear the Fed wants out."
- Dow Jones Industrial Average (DJIA)- 16,020.20 (+1.26%)
- S&P 500- 1,805.03 (+1.12%)
- NASDAQ- 4,062.52 (+0.73%)
- Russell 2000- 1,131.38 (+0.79%)
- EURO STOXX 50 Price EUR- 2,979.94 (+0.91%)
- FTSE 100 Index- 6,551.99 (+0.83%)
- Deutsche Borse AG German Stock Index DAX- 9,172.41 (+0.96%)
Asia Pacific Markets
- Nikkei 225- 15,299.86 (+0.81%)
- Hong Kong Hang Seng Index- 23,743.10 (+0.13%)
- Shanghai Shenzhen CSI 300 Index- 2,452.29 (-0.64%)
Stocks in Focus
The stock price of General Motors Company (NYSE:GM) increased 2.89% to $40.17 per share. The automaker benefited from yesterday's disclosure that Kyle Bass’ Hayman Capital Management had acquired a stake in the company. In addition, the company reported a 13% increase in vehicle sales in China for the month of November.
The shares of Intel Corporation (NASDAQ:INTC) climbed 2.25% to $24.81% after Glen Yeung, analyst at Citigroup Inc (NYSE:C) raised his rating for the stock from neutral to buy with a price target of $28 per share due to the stabilization of corporate PC market.
Rite Aid Corporation (NYSE:RAD) gained 2.31% to $5.75 per share after reporting positive same store sales results for the month of November. According to the company, its same store sales rose 2.8%, higher that the 2.1% average estimate of analysts.
Meanwhile, the Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) suffered a 20.54% decline to $93.76 per share after reporting disappointing financial results for the third quarter. The company posted $0.70 earnings per share compared with the $0.74 average estimate of analysts. Its revenue was $618.78 million.