Stock Market News for Jan 5, 2011 - Market News - Alcoa (NYSE:AA), Aether Holdings (NASDAQ:ATHR)

Markets bid adieu to the surge on the first trading day of the year, as they ended mixed yesterday. Investors took a breather and shrugged off positive economy data on factory orders and better auto sales. Minutes from the Federal Reserve declared continuing support to stimulus measures. Taking momentum from this declaration the Dow Jones Industrial Average (DJIA) edged slightly higher, but other benchmarks failed to draw any optimism from the data.

The Dow rose 0.2% and closed at 11,691.18. The S&P 500 slid 0.1% and closed at 1,270.20. The Nasdaq ended the day at 2,681.25, down 0.4%. On the New York Stock Exchange, the advance decline ratio stood at 2:1 and about 4.9 billion shares were traded on Tuesday.

In November last year, the Federal Reserve had declared its “quantitative easing” program, a $600 billion bond purchase to act as a stimulus to the economy. Fed officials stated in minutes from its last policy meeting in December that economic growth was not sufficient to cut back the program, which boosts spending by maintaining a low interest rate. The Central Bank is therefore to carry on with its “asset-purchase program”, which experts view as a positive move.

Positive economic data released yesterday was shrugged off by investors and could do little to stop major indices from declining. The Commerce Department reported orders for US factory goods had increased 0.7% in November 2010, quite contradictory to economists' expectation of a 0.1% fall. Robust year-end-sales figures of automakers also could not encourage the indices. General Motors GM reported 6.3% year-over-year increase in sales while Ford Motor F reported a surge of 15% in its sales figures for 2010. Stocks of General Motors and Ford rose 2.3% and 0.8% respectively.

On to some individual counters, Motorola Mobility MMI, a newly formed company after Motorola was split in two, soared 9.5% on debut. Shares of Molycorp MCP surged 7.5% after the company announced that it would possibly double its planned production. Aluminum producer Alcoa AA further advanced 4.6% on Tuesday's trade after it was picked as 2011's “top stock” by CNBC's Jim Cramer. Borders Group BGP plunged 12.5% following news of the resignation of the book retailer's Counsel Thomas Carney and CIO D. Scott Laverty. In other news, Ingram Industries said it would continue its supply of books to Borders despite its financial troubles. Quanta Services PWR gained 4.2% on winning a contract estimated approximately at $118.5 million for the installation of a statewide fiber-optic network by Pennsylvania colleges and universities as well as economic development and research and development organizations.

On to mergers and acquisitions news, semiconductor manufacturer Atheros Communications ATHR jumped 18.85% after Qualcomm QCOM had shown interest to bid for the company for a deal valued approximately at $3.5 billion.

Shares of Supervalu SVU and Safeway SWY plunged 6.3% and 3.8% respectively, after Morgan Stanley downgraded both the stocks from “equal weight” to “under weight” and advised investors to reduce holdings on these stocks as rise in food costs would dent results for the forthcoming quarters. BMO Capital Markets also cut its ratings on Supervalu and Safeway from “outperform” to “marker perform”.

ALCOA INC (AA

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ATHEROS COMM (ATHR

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BORDERS GROUP (BGP

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FORD MOTOR CO (F

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QUANTA SERVICES (PWR

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QUALCOMM INC (QCOM

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