Stock Market News for September 26, 2011 – Market News

After four consecutive days of heavy sell-offs, markets edged up modestly on Friday, bringing to a close one of their worst weeks in almost three years. Mounting fear and anxiety over Europe’s debt crisis coupled with the Federal Reserve’s gloomy forecast about the US economy had driven the markets down throughout the week.

The Dow Jones Industrial Average (DJIA) was up 37.65 points to close at 10,771.48 while the Standard & Poor 500 (S&P 500) index gained 0.6% to finish at 1,136.40. The Nasdaq Composite Index gained 1.1% to close at 2,483.23. The fear-gauge CBOE Volatility Index (VIX) continued its uptrend into the fifth-straight day, increasing 0.6%. On the New York Stock Exchange (NYSE), for every two stocks that moved up, one stock was on the declining side. Consolidated volumes on the NYSE, Nasdaq and Amex was about 8.9 billion shares, higher than the daily average of 7.94 billion.

Friday’s gains were attributable to news of G-20 officials gearing up for an international response to the global economic problem. Optimism was built up in light of the discussions between the G-20, the International Monetary Fund, the European Central Bank and the European Union on ways and means to deal with the debt crisis. The G-20 has issued a statement after stock markets declined worldwide on Thursday. The group will aim to help stabilize financial markets by ensuring that banks have sufficient funds to deal with the current scenario. G-20 said that it would take all steps necessary to “preserve the stability of banking systems and financial markets as required”.

The day was favorable for the transportation sector with airline stocks experiencing their biggest one day gain in nearly two weeks. Shares of US Airways Group, Inc. (NYSE:LCC), Delta Air Lines Inc. (NYSE:DAL) and United Continental Holdings (NYSE:UAL) gained 7.0%, 7.8% and 6.3%, respectively, on Friday. The Dow Jones Transportation average halted its biggest five day decline in over a month on Friday.

Financial stocks snapped their four-day losing streak on Friday with a rebound in the banking sector led by Morgan Stanley. However, financials are 9.5% down for the week as a whole. Shares of Goldman Sachs Group, Inc. (NYSE:GS), Citigroup, Inc. (NYSE:C), Wells Fargo & Company (NYSE:WFC) and Morgan Stanley (NYSE:MS) surged 1.3%, 4.3%, 2.2% and 5.1% respectively.

Incremental recessionary fears gripped the markets throughout the week and crushed the benchmarks except on Friday. However, the gains made on Friday were not strong enough to negate the heavy losses markets suffered and the Dow had its worst week since October 2008, plunging by 6.