Stocks End Lower; Post Strong Gains for Q3
Stocks ended lower on the last trading of the third quarter. Despite the drop today, all three major indexes posted strong gains for the month of September and the third quarter.
The Dow Jones ended 0.36% lower at 13,437.13, the S&P 500 ended 0.45% lower at 1,440.67, and the Nasdaq ended 0.65% lower at 3,116.23.
For the month of September, the Dow Jones rose 2.64%, the S&P 500 rose 2.41%, and the Nasdaq rose 1.61%. For the quarter, the Dow Jones rose 4.32%, the S&P 500 rose 5.75%, and the Nasdaq rose 6.16%.
Year-to-date, the Dow Jones is up 9.98%, the S&P 500 is up 14.56%, and the Nasdaq is up 19.62%.
The gains in the third quarter were driven by central banks’ actions. The European Central Bank (ECB), the Federal Reserve and the Bank of Japan announced new monetary easing measures, boosting risk assets. The Fed, earlier this month, launched an aggressive bond buying program. The Fed said that it would buy $40 billion in mortgage-backed debt every month until there is a significant improvement in the labor market.
The ECB also announced an unlimited bond buying program in the third quarter to bring down borrowing costs for Spain and Italy. The ECB’s actions eased concerns over the euro zone debt crisis. However, sentiment turned negative on Spain towards the end of the quarter. Earlier this week, Spanish government announced new austerity measures despite rising protests in the country. On Friday, Spain also released bank stress tests results, which were in-line with expectations. The developments in the last two days have eased some concerns, but Spain may still have to request for a bailout.
Investors are also concerned about global economic growth heading into the fourth quarter. While economic data in the U.S. has painted a mixed picture, the outlook for euro zone is gloomy. Meanwhile, China continues to a see a slowdown. Investors are hoping that Chinese policymakers will provide stimulus to boost economic growth in the world’s second largest economy. The biggest risk facing the global economy in the fourth quarter is probably going to be the U.S. fiscal cliff.
On the corporate front, Apple Inc. (NASDAQ: AAPL) was one of the best performing stocks in the third quarter gaining 14.23%. Apple shares also hit an all-time high of $705.07 in the third quarter following the launch of the much-awaited iPhone 5.
Facebook Inc. (NASDAQ: FB) shares rallied on the last trading day of the third quarter. However, the gains were not enough to pare significant losses posted earlier in the quarter. FB shares fell 30.34% in the third quarter.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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