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Market News that affect STI

Wall Street stages a comeback

By Ben Rooney, staff reporterJuly 20, 2010: 5:09 PM ET

NEW YORK (CNNMoney.com) -- Stocks closed higher Tuesday, recovering from steep loses earlier in the session, as investors looked forward to earnings from Apple and speculated about possible moves by the Federal Reserve.

The Dow Jones industrial average (INDU) rose 75 points, or 0.7%. The S&P 500 (SPX) index rose 12 points, or 1%, and the Nasdaq (COMP) composite gained 24 points, or 1%.

Stocks plunged at the open and struggled for most of the morning as investors digested a big drop in quarterly earnings from Goldman Sachs and a lower profit outlook from Johnson & Johnson. Weaker-than-expected revenues from IBM also weighed on the market.

But the tone improved in the afternoon on chatter that the Fed is considering additional steps to encourage bank lending. Ben Bernanke, chairman of the U.S. central bank, is scheduled to testify before Congress on Wednesday.

"That's all speculation," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. "I think it's more Apple and Goldman rallying and taking the market up with it."

Shortly after the market closed, Apple (APPL) reported its best quarterly results on record due to strong Macintosh sales and overwhelming demand for its iPad device.

Apple said sales rose to a record $15.7 billion in the most recent quarter, up 61% from the same period last year. Net income rose to $3.25 billion, up 78% from a year ago.

Shares of Apple continued to rally, gaining 4% in extended trading.

Also after the close, Yahoo (YHOO, Fortune 500) said its second-quarter net income rose 51% versus the same period last year. The Internet company said sales rose 2% to $1.6 billion, which beat analysts' forecast of $1.16 billion. But shares fell nearly 5% in extended trading.

Investors have been focused on quarterly results, with over 120 companies due to report this week.

While earnings have been relatively strong so far, investors are looking for sales and revenue growth to confirm that profits are due to improved economic conditions and not cost-cutting measures.

Concerns that the U.S. economy could dip back into recession later this year have kept the market range-bound since April. A dour report released Tuesday on initial construction of new homes in June added to the economic jitters.

"People are very concerned about growth in the second half," said Ryan Larson, head of U.S. equity trading at RBC Capital Markets. "That's going to be key to sustaining any rally coming out of earnings season."

Stocks ended Monday's session with gains, although economic worries tempered positive earnings results.

Companies: After the market closed, BP (BP) announced plans to sell $7 billion worth of assets to Apache Corp. The sale of assets in the United States, Canada and Egypt is part of a plan to raise money to cover costs related to the oil spill in the Gulf of Mexico.

Goldman Sachs (GS, Fortune 500) said profit fell 82% in the second quarter to $613 million, due to a slowdown in the bank's trading business. Results were also hurt by a bonus tax in the United Kingdom and the $550 million settlement Goldman reached with the Securities and Exchange Commission. Shares gained about 2%.

Drugmaker Johnson & Johnson (JNJ, Fortune 500) fell more than 2% after the company lowered its full-year earnings estimate to a range between $4.65 to $4.75 a share, compared with earlier guidance of $4.80 to $4.90 a share.

For the second quarter, J&J said it earnings rose 7% to $1.23 a share from $1.15 a share in the same period last year.

J&J also said it has received a grand jury subpoena and is cooperating with a federal investigation stemming from multiple recalls of its popular non-prescription drugs.

Harley-Davidson (HOG, Fortune 500) soared over 13% after the motorcycle maker said it earned 59 cents a share, versus expectations for 41 cents a share.

Shares of Toyota (TM) fell 1.4% after the automaker said it was cooperating with a subpoena from a U.S. federal grand jury for documents related to steering problems in its vehicles.

IBM (IBM, Fortune 500) fell 2.5% after the company reported late Monday second-quarter earnings that beat expectations, while sales growth was weaker than expected.

Economy: Housing starts fell to their lowest level of the year in June, down 5% to an annual rate of 549,000. But building permits showed surprising strength, climbing 2.1% to an annual rate of 586,000.

Economists surveyed by Briefing.com had expected starts to come in at an annual rate of 575,000, according to consensus estimates. Building permits were forecast have dipped to an annual rate of 572,000.

Separately, a monthly report from the Labor Department showed that unemployment eased in more than half of U.S. states in June.

A total of 39 states and the District of Columbia posted unemployment rate decreases in June, while jobless rates rose in five states and remained unchanged in six states.

World markets: European shares ended lower. The FTSE 100 in Britain lost 0.2%, France's CAC 40 slid 0.5% and Germany's DAX fell 0.7%.

Asian markets ended mixed. The Shanghai Composite rallied 2.2% but Japan's Nikkei tumbled 1.2%. The Hang Seng in Hong Kong added 0.9%.

Dollar and commodities: The dollar was up against the euro, the British pound and the Japanese yen.

U.S. light crude oil for August delivery edged up 78 cents to settle at $75.53 a barrel. The September contract, which becomes active Wednesday, rose 85 cents to $77.75 a barrel.

COMEX gold's August contract rose $10 to $1,192.20 per ounce.

Bonds: Treasury prices rose, pushing the yield on the 10-year note down to 2.93% from 2.96% late Monday. Bond prices and yields move in opposite directions.

 

It is a good sign for global capital market  . . . . . . . . Global financial leveraging process is emerging after a substantial global financial de-leveraging process over two years had been carried out forcefully by global market mechanism!

Blastoff      ( Date: 19-Jul-2010 13:12) Posted: Jul 19, 2010 IMF to boost lending resources   SEOUL - THE International Monetary Fund is seeking to boost its lending resources from US$750 to 1,000 billion (S$1 trillion to S$1.38 trillion) to better handle future financial crises, a report said on Monday. The Financial Times, citing IMF Managing Director Dominique Strauss-Kahn, said the bigger credit lines should be used to help prevent, rather than address, crises. 'Even when not in a time of crisis, a big fund, likely to intervene massively, is something that can help prevent crises,' IMF Managing Director Dominique Strauss-Kahn told the Financial Times. 'Just because the financing role decreases, doesn't mean we don't need to have huge firepower... a 1,000 billion dollar fund is a correct forecast,' he said. The Financial Times said the IMF wants to agree financing deals in advance that will be specially tailored to individual countries, rather than respond to crises with conditional loan packages. The aim would be to cool market nervousness over any nation facing an imminent liquidity crunch, the paper said. Mr Strauss-Kahn was in South Korea - which chairs the Group of 20 leading economies this year - last week to attend a conference. South Korea's presidential panel for the Group of 20 leading economies, confirmed it was cooperating with the IMF to work out a better safety net. 'So far the lending facilities of the IMF have been focused on crisis resolution more than crisis prevention,' Sohn Jie Ae , spokesperson of Presidential Committee for the G20 Seoul Summit, told AFP. 'But South Korea, as this year's president of the Group of 20 leading economies is discussing with the IMF packages that would compliment and upgrade crisis prevention mechanisms.' The spokesperson, however, declined to elaborate on how much the IMF will increase its lending resources.

 

 

STI may not dropped a lot as SSE now positive...

 

Stocks fight back from losses

By Alexandra Twin, senior writerJuly 15, 2010: 6:42 PM ET

NEW YORK (CNNMoney.com) -- Stocks end little changed Thursday, erasing bigger losses after weaker than expected reports on the economy revived worries about growth.

The Dow Jones industrial average (INDU) lost a few points and broke its seven-day winning streak. The S&P 500 (SPX) index ended just above breakeven, and the Nasdaq (COMP) composite lost a few points.

Stocks tumbled through most of the session, but managed to cut losses near the close thanks to a late-session advance in financial and commodity shares.

After the close, Google (GOOG, Fortune 500) reported quarterly earnings that missed forecasts on revenue that beat estimates, sending shares lower in after-hours trading.

JPMorgan's profit report added to bets that quarterly earnings will hold up despite the slower growing economy. But that wasn't enough to distract investors from a spate of mixed-to-weaker economic reports, particularly in the aftermath of a big rally over the past week.

"We're coming off a strong rally over the last few days that was earnings driven," said Kim Caughey, senior equity analyst at Fort Pitt Capital Group. "Today we took a rest from looking at the earnings and took another look at the economy."

On Wednesday, the Federal Reserve lowered its forecast for GDP growth this year. On Thursday, a report showed that weekly jobless claims fell to a two-year low -- but continuing claims, a measure of long-term joblessness, rose. Weak reports on manufacturing in the New York and Philadelphia regions added to the jitters.

China also reported strong GDP growth of 10.3% in the second quarter. Still, that fell short of the 11.9% growth recorded in the first quarter.

On Thursday afternoon, the Senate approved the most far-reaching financial reform bill since the 1930s, which President Obama is expected to sign into law next week.

The legislation is designed to limit big banks, protect consumers and prevent the future reoccurrence of financial crises like the one that hit in 2008.

Results: Dow component JPMorgan Chase posted a second-quarter profit of $4.8 billion, or $1.09 per share, trouncing expectations. The bank's strength in the quarter was due partly to a decline in the number of consumers defaulting on loans. However, JPMorgan's shares slipped amid the broader market selloff.

"It's great to have earnings surprises but what we really need to see are companies issuing upbeat forecasts for the second half of the year," she said.

Earnings for the S&P 500 are expected to have risen 28% versus a year ago, according to the latest from earnings tracker Thomson Reuters.

Economy: The number of Americans filing new claims for unemployment last week fell to 429,000, the lowest level since August 2008. Economists surveyed by Briefing.com thought claims would drop to 450,000 from a revised 458,000 in the previous week.

However, the drop in weekly claims was largely a result of seasonal factors. Continuing claims, a measure of Americans who have been receiving benefits for a week or more, rose to 4,681,000 from 4,434,000 in the previous week. Economists surveyed by Briefing.com thought claims would fall to 4,400,000.

The NY Fed-Empire Manufacturing survey plunged to 5.08 in July from 19.57 in June, surprising economists who were expecting it to dip to 18.

The Philadelphia Fed index fell to 5.1 in July from 8.0 in June, surprising economists who thought that manufacturing activity would rise to 10.0.

The Producer Price Index (PPI), which measures wholesale inflation, fell 0.5% in June after falling 0.3% in May. Economists thought it would fall 0.1%. The so-called core PPI, which strips out volatile food and energy prices, rose 0.1%. Economists expected it to rise 0.1% after it rose 0.2% last month.

Industrial production rose 0.1% in June after rising 1.3% in May. Economists thought it would hold steady. Capacity utilization held steady at 74.1% in June, versus forecasts for a rise to 74.2%.

On Wednesday, the Federal Reserve lowered its forecast for GDP this year to a range of between 3% and 3.5% versus the previous forecast of a range of 3.2% to 3.7%.

BP: Shares of the beleaguered oil company rallied 7.5% after BP (BP) said that it has managed to temporarily stop the flow of oil into the Gulf of Mexico, nearly three months after the explosion that caused the leak.

Company news: Private-equity firm Carlyle Group is buying vitamin maker NBTY (NTY) in a $3.8 billion cash deal that values NBTY's shares at $55 per share, a 47% premium above the stock's closing price Wednesday. Shares gained 43%.

World markets: European markets fell, with Britain's FTSE 100 down 0.8%, Germany's DAX off 1% and France's CAC 40 down 1.4%.

Asian markets ended lower. Japan's Nikkei fell 0.1%, Hong Kong's Hang Seng lost 0.2% and the Shanghai Composite fell 1.6%.

Currencies: The euro gained versus the dollar, hitting a two-month high. The dollar fell versus the Japanese yen.

Commodities: U.S. light crude oil for August delivery rose 26 cents to $76.88 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery gained $1.20 to $1,209.50 an ounce.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 2.98% from 3.05% late Wednesday. Debt prices and yields move in opposite directions.

Market breadth: Breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.12 billion shares. On the Nasdaq, decliners beat advancers 2 to 1 on volume of 1.99 billion shares.

 

China growth may slow more

 

Stocks finish little changed

By Ben Rooney, staff reporterJuly 14, 2010: 5:31 PM ET

NEW YORK (CNNMoney.com) -- Stocks ended little changed Wednesday as meeting minutes from the Federal Reserve raised concerns about the economy after Intel's earnings strength renewed optimism about corporate results.

The Dow Jones industrial average (INDU) gained about 4 points to close at 10,366. The S&P 500 (SPX) index lost less than one point, while the Nasdaq (COMP) composite rose nearly 8 points, or 0.3%.

Stocks staged a modest rally early in the session on optimism about second-quarter corporate profits. But the advance faded after the central bank released minutes from its June policy meeting.

The minutes showed that Fed officials have a more pessimistic view of the economy, stoking fears about a slowdown in the second half of the year.

However, technology shares bucked the trend. The sector was supported by strong quarterly results and a bullish sales outlook from Intel (INTEL) on Tuesday.

Strong earnings and upbeat guidance from aluminum giant Alcoa (AA, Fortune 500) and transportation company CSX (CSX, Fortune 500) boosted the market Tuesday. Last week, the market booked its best weekly gain in a year on speculation the second-quarter earnings period will beat expectations.

But traders said the tone was more cautious Wednesday, with several more companies due to post results this week. A dour report on retail sales and a big drop in mortgage applications also weighed on the market.

"At the moment the economic news is trumping the earnings news," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

Earnings news could be back in focus early Thursday when JPMorgan Chase (JPM, Fortune 500) reports second-quarter results before the market opens. Analysts surveyed by Thomson Financial expect the bank to report a profit of 70 cents per share, up from 28 cents per share a year ago.

Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) are also due to report this week.

"If the financial's participate and we have good earnings, we're going to move higher," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

In addition, Internet giant Google (GOOG, Fortune 500) is slated to report quarterly results after the market closes Thursday.

On the economic front, reports due Thursday include weekly initial jobless claims, consumer and wholesale inflation data as well as a regional manufacturing report.

Fed: According to the minutes of their June meeting, Fed officials discussed contingency plans to further stimulate the economy "if the outlook were to worsen appreciably."

The minutes also showed that the central banker reduced its outlook for U.S. gross domestic product. GDP is now projected to grow between 3.0% and 3.5% this year, down from an earlier forecast of 3.2% to 3.7%. In the first quarter, GDP rose at an annual rate of 2.7%.

In addition, the Fed predicts the unemployment rate will range between 9.2% to 9.5% this year, slightly worse than the 9.1% to 9.5% range it forecast in April. Unemployment was 9.5% in June, but has averaged 9.7% over the first half of the year.

"The Fed believes that the economy has recovered from disaster but is still extremely weak," said Doug Roberts, chief investment strategist for Channel Capital Research. "There is virtually no danger of higher rates in the near future."

Earnings: Some 21 S&P 500 companies will announce results this week, with most of the rest spread out over the next three weeks.

Second-quarter earnings are expected to be up 27%, according to trackers at Thomson Reuters. But investors are particularly focused on what corporate leaders expect for the second half of the year.

"Earnings have been quite outstanding, and the market has been in pretty good shape lately, but markets can't like everything about all the earnings reports," said Robert Brusca, chief economist at Fact and Opinion Economics. "At some point you're going to have to look for this to settle down."

Economy: The Commerce Department said retail sales fell 0.5% in June after dropping 1.1% in May, while sales excluding autos slipped 0.1%.

Economists surveyed by Briefing.com expected total sales to have fallen 0.2%, and sales excluding autos were forecast to have held steady after falling 0.8% in May.

Separately, mortgage applications fell last week to their lowest level in more than 13 years, according to the Mortgage Bankers Association.

World markets: European shares were mixed in active trading. Britain's FTSE 100 slipped 0.3% and France's CAC 40 fell 0.1%. The DAX in Germany gained 0.3%

In Asia, Japan's Nikkei surged 2.7%, the Shanghai Composite added 0.8% and the Hang Seng in Hong Kong rose 0.6%.

Currencies: The dollar rose against its main trading partners, including the euro, the British pound and the Japanese yen.

Commodities: U.S. light crude oil for August delivery fell 16 cents to settle at $76.99 a barrel.

COMEX gold's August contract fell $3.80 to $1,209.60 per ounce.

Bonds: Treasury prices rose, and the yield on the 10-year note fell to 3.05%. Bond prices and yields move in opposite directions.

 

SINGAPORE exports shrugged off any concerns from the eurozone to surge 29 per cent in June from a year ago, beating economists' expectations for a 23 per cent rise.

Exports to the European Union rose a spectacular 75 per cent leading a jump in exports to all of Singapore's top 10 markets.

Exports have now grown at a 27.7 per cent pace for the second quarter from the same period the year before.

A stronger than expected trade expansion in the second quarter, buoyant demand from Asia and a continued boom in semiconductor industry have prompted the Government to revise its forecast for non-oil domestic exports to grow between 17 and 19 per cent this year, up from the previous forecast of 15 to 17 per cent.

But economists warned that export momentum appears to have reached its peak and is due for a slowdown in the second half of the year.

Month-on-month seasonally adjusted figures have decreased marginally for the second straight month, while the pace of growth in electronics has also slowed.

Non-oil domestic exports in June fell 0.1 per cent from May, following a 0.2 per cent fall in May from April.

While electronics in June grew 1.7 per cent from May, compared to a 13.7 per cent jump from April to May.

HSBC economist Frederic Neumann said: 'While year on year export data does look good, we continue to anticipate a deceleration in sequential export data due to strong first half numbers.

'Still, we are coming from extremely elevated levels in terms of activity and shipments so that a sequential cool down does not in itself imply a hard landing.'

Economists also anticipate lingering debt problems in Europe to trickle in over the second half of the year.

 

SINGAPORE'S economy is expected to grow 13 to 15 per cent this year, from an earlier forecast of 7 to 9 per cent due to better performance in the first quarter and stronger expected growth in the second quarter, led by surging manufacturing.

The Ministry of Trade and Industry revised upwards the growth figures for the year after the economy expanded by 16.9 per cent in the first quarter from a year ago - higher than the 15.5 per cent rise estimated in May.

Seasonally-adjusted on a quarter-on-quarter annualised basis, the economy grew by 45.9 per cent in Q1, compared to an earlier estimate of 38.6 per cent. The revision is primarily due to an upward adjustment to the growth estimate for the manufacturing sector, specifically the biomedical manufacturing cluster, said MTI in a statement on Wednesday morning.

MTI also expects a stronger than expected growth in the second quarter.

Its advance estimates for Q2 indicate that the economy has continued to expand strongly. Real GDP is expected to grow by 19.3 per cent for the quarter, compared to the same period a year go. On a sequential basis, the economy grew by 26 per cent in the second quarter.

Manufacturing led the way, and it is estimated to have grown by 45.5 per cent year-on-year.

'Growth was driven by a surge in the output of the biomedical manufacturing cluster, as well as a strong expansion in the electronics cluster underpinned by healthy worldwide demand for electronics products,' said MTI.

The construction sector is estimated to have grown by 13.5 per cent from a year ago, compared to the 10.2 per cent gain in the first quarter. This was supported by an increase in public sector construction activities.

 

SINGAPORE trade is expected to grow by 17 to 19 per cent this year, after June exports rose 29 per cent from a year ago due to higher electronic, pharmaceutical and petrochemcial orders, said trade promotion agency International Enterprise (IE) Singapore on Wednesday morning.

The increase was more than the 24 per cent rise in the previous month. The higher projection came at the same time as the Ministry of Trade and Industry's upward revision of the growth forecast for the Singapore economy to between 13 and 15 per cent this year, from the 7 to 9 per cent expected earlier.

IE Singapore on Wednesday also revised the total trade growth in 2010 upwards from between 14 and 16 per cent to 17 and 19 per cent.

It said Non-oil domestic exports (NODX) to all of Singapore's top 10 markets surged, soaring by 75 per cent to the European Union, 39 per cent to China and 50 per cent to Japan from a year ago.

Seasonally adjusted on a monthly basis, NODX fell marginally by 0.1 per cent in June, after the May's 0.2 per cent dip.

Electronic exports climbed by 44 per cent in June from a year ago, after the 39 per cent rise in the previous month. The expansion in electronic domestic exports was largely due to higher domestic exports of ICs and computer parts.

Non-electronic NODX climbed by 21 per cent, following the 16 per cent gain in May, led by higher domestic exports of pharmaceuticals, petrochemicals and specialised machinery.

IE Singapore said the y-o-y expansion in both Singapore's total trade and NODX was larger than expected for the second quarter, at 28 per cent each, compared to 27 per cent and 14 per cent in 2009.

On its revised growth forecast for year, it said Asian economies continued to enjoy buoyant growth in the first half of the year, with the IMF upgrading Asia's 2010 real GDP growth forecast to 7.5 per cent5, up from April's forecast of 6.9 per cent.

This is also reflected in their trade performance with most Asian economies' trade growing by double-digits for the first five months of 2010. China especially registered strong import demand with its imports growing by 49 per cent from a year ago in May, noted IE Singapore.

'China's trading partners are expected to benefit from the strong performance of Chinese imports. Imports of our major Asian trading partners. For example, Indonesia and Malaysia also grew by more than 30 per cent in May 2010. This has had a positive impact on Singapore's exports, since they are among Singapore's main trading partners,' it added.

 

STI opens higher

 

STI should be up today after intel's reported better than expected earnings.... wonder how much it will go up?

Blastoff      ( Date: 14-Jul-2010 07:06) Posted: Stocks rally on Alcoa profit, Greek auction By Alexandra Twin and Annalyn Censky, staff reportersJuly 13, 2010: 6:20 PM ET NEW YORK (CNNMoney.com) -- Stocks surged Tuesday as investors welcomed Alcoa's better-than-expected profit report and a well-received auction of Greek debt that lifted global markets and strengthened the euro. After the close, Intel reported higher quarterly sales and earnings that rose from a year ago and topped expectations. It was the company's best quarter ever, reflecting strong demand from business customers. The Dow Jones industrial average (INDU) added 147 points, or 1.4%. The S&P 500 (SPX) index rose 16 points, or 1.5%, and the Nasdaq (COMP) composite jumped 44 points, or 2%. Aluminum giant Alcoa (AA, Fortune 500) reported higher quarterly sales and earnings that topped estimates late Monday, beginning the quarterly reporting period on a positive note. The Dow component also estimated that aluminum demand would rise by 12% this year, versus the previous forecast for a rise of 10%. Profits are expected to have risen about 27% in the second quarter versus a year ago, while revenue is expected to have jumped 9%. But investors will focus more on what companies say about the second half of the year. Investors are hoping to see that corporate profits have held up despite recent worries about the pace of the economic recovery and the European debt crisis. Those worries sent the major gauges down over 15% in two months. But in the last week stocks have rebounded, with the major gauges jumping 5% last week to post the biggest weekly gains in a year. Stocks were mixed Monday before resuming the rally Tuesday. "The market was oversold on the fear and panic regarding Europe and the threat of contagion," said William McDermott, managing director at Morgan Joseph. "Now a few earnings reports and guidance have turned things around." However, he said that a lot of the rally has been about traders and funds jumping in and deciding to follow the momentum for the short term. Whether the rally is sustainable will depend on the earnings forecasts and continued news out of Europe in the upcoming weeks, he said. "There was tremendous pessimism for weeks, followed by a strong rally off the lows," said Larry Glazer, managing director at Mayflower Advisors. But he cautioned that there are still negatives lurking, including the impact of financial reform, worries about debt and the weakness in the housing and labor markets. America's Best Places to Live Results: Also after the close Monday, railroad operator CSX (CSX, Fortune 500) reported higher-than-expected quarterly sales and earnings. However, shares fell Tuesday. Other Dow companies reporting this week include JPMorgan Chase (JPM, Fortune 500) on Thursday and General Electric (GE, Fortune 500) and Bank of America (BAC, Fortune 500) on Friday. Also on tap: Google (GOOG, Fortune 500) on Thursday and Citigroup (C, Fortune 500) on Friday. AIG: Shares of the troubled insurance giant surged about 6% after reports said the AIG (AIG, Fortune 500) board plans to meet on Wednesday to discuss a public offering of its Asian life insurance division, AIA. A sale or public offering of that unit is a crucial part of AIG's strategy to raise funds by divesting divisions of its company to pay back the $102 billion it owes U.S. taxpayers. 0:00 /:50Intel earnings should be bullish Economy: The trade balance widened to $42.3 billion in May from $40.3 billion in April, surprising economists who thought it would narrow to $39.5 billion, according to Briefing.com forecasts. The U.S. government ran up a budget deficit of $68 billion in June, the Treasury Department announced Tuesday. That was slightly lower than the $70 billion loss analysts had predicted, according to Briefing.com forecasts. Europe: Moody's cut Portugal's debt rating two notches to A1 with a stable outlook. The rating is still investment grade; however, the agency says it expects the country's outlook is "likely to remain relatively week." Last month, news that a ratings agency had cut its rating on one of the so-called PIIGS -- Portugal, Italy, Ireland, Greece and Spain -- would have sent stocks lower. But investors seemed willing to shrug off Portugal's downgrade, after Greece staged a successful auction of its government debt, raising about $2 billion to repay some of the country's outstanding loans. The news boosted European markets and sent the euro to a fresh two-month high against the dollar. European markets gained, with Britain's FTSE 100, Germany's DAX and France's CAC 40 all climbing about 2%. Asian markets ended lower. Japan's Nikkei fell 0.1%, Hong Kong's Hang Seng lost 0.2% and the Shanghai Composite fell 1.6%. Currencies: The euro gained versus the dollar, posting a two-month high in intra-day trade. The greenback also fell versus the Japanese yen. Commodities: U.S. light crude oil for August delivery rose $2.29 to settle at $77.15 a barrel on the New York Mercantile Exchange. COMEX gold for August delivery gained $12.60 to settle at $1,213.50 an ounce. Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.11% from 3.05% late Tuesday. Debt prices and yields move in opposite directions. Market breadth: Breadth was positive and volume was fairly light. On the New York Stock Exchange, winners beat losers by 7 to 1 on volume of 1.13 billion shares. On the Nasdaq, advancers beat decliners 5 to 1 on volume of 2.35 billion shares.

 

Stocks rally on Alcoa profit, Greek auction

By Alexandra Twin and Annalyn Censky, staff reportersJuly 13, 2010: 6:20 PM ET

NEW YORK (CNNMoney.com) -- Stocks surged Tuesday as investors welcomed Alcoa's better-than-expected profit report and a well-received auction of Greek debt that lifted global markets and strengthened the euro.

After the close, Intel reported higher quarterly sales and earnings that rose from a year ago and topped expectations. It was the company's best quarter ever, reflecting strong demand from business customers.

Aluminum giant Alcoa (AA, Fortune 500) reported higher quarterly sales and earnings that topped estimates late Monday, beginning the quarterly reporting period on a positive note. The Dow component also estimated that aluminum demand would rise by 12% this year, versus the previous forecast for a rise of 10%.

Profits are expected to have risen about 27% in the second quarter versus a year ago, while revenue is expected to have jumped 9%.

But investors will focus more on what companies say about the second half of the year.

Investors are hoping to see that corporate profits have held up despite recent worries about the pace of the economic recovery and the European debt crisis. Those worries sent the major gauges down over 15% in two months.

But in the last week stocks have rebounded, with the major gauges jumping 5% last week to post the biggest weekly gains in a year. Stocks were mixed Monday before resuming the rally Tuesday.

"The market was oversold on the fear and panic regarding Europe and the threat of contagion," said William McDermott, managing director at Morgan Joseph. "Now a few earnings reports and guidance have turned things around."

However, he said that a lot of the rally has been about traders and funds jumping in and deciding to follow the momentum for the short term. Whether the rally is sustainable will depend on the earnings forecasts and continued news out of Europe in the upcoming weeks, he said.

"There was tremendous pessimism for weeks, followed by a strong rally off the lows," said Larry Glazer, managing director at Mayflower Advisors.

But he cautioned that there are still negatives lurking, including the impact of financial reform, worries about debt and the weakness in the housing and labor markets.

Results: Also after the close Monday, railroad operator CSX (CSX, Fortune 500) reported higher-than-expected quarterly sales and earnings. However, shares fell Tuesday.

Other Dow companies reporting this week include JPMorgan Chase (JPM, Fortune 500) on Thursday and General Electric (GE, Fortune 500) and Bank of America (BAC, Fortune 500) on Friday. Also on tap: Google (GOOG, Fortune 500) on Thursday and Citigroup (C, Fortune 500) on Friday.

AIG: Shares of the troubled insurance giant surged about 6% after reports said the AIG (AIG, Fortune 500) board plans to meet on Wednesday to discuss a public offering of its Asian life insurance division, AIA.

A sale or public offering of that unit is a crucial part of AIG's strategy to raise funds by divesting divisions of its company to pay back the $102 billion it owes U.S. taxpayers.

Economy: The trade balance widened to $42.3 billion in May from $40.3 billion in April, surprising economists who thought it would narrow to $39.5 billion, according to Briefing.com forecasts.

The U.S. government ran up a budget deficit of $68 billion in June, the Treasury Department announced Tuesday. That was slightly lower than the $70 billion loss analysts had predicted, according to Briefing.com forecasts.

Europe: Moody's cut Portugal's debt rating two notches to A1 with a stable outlook. The rating is still investment grade; however, the agency says it expects the country's outlook is "likely to remain relatively week."

Last month, news that a ratings agency had cut its rating on one of the so-called PIIGS -- Portugal, Italy, Ireland, Greece and Spain -- would have sent stocks lower.

But investors seemed willing to shrug off Portugal's downgrade, after Greece staged a successful auction of its government debt, raising about $2 billion to repay some of the country's outstanding loans.

The news boosted European markets and sent the euro to a fresh two-month high against the dollar.

European markets gained, with Britain's FTSE 100, Germany's DAX and France's CAC 40 all climbing about 2%.

Asian markets ended lower. Japan's Nikkei fell 0.1%, Hong Kong's Hang Seng lost 0.2% and the Shanghai Composite fell 1.6%.

Currencies: The euro gained versus the dollar, posting a two-month high in intra-day trade. The greenback also fell versus the Japanese yen.

Commodities: U.S. light crude oil for August delivery rose $2.29 to settle at $77.15 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery gained $12.60 to settle at $1,213.50 an ounce.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.11% from 3.05% late Tuesday. Debt prices and yields move in opposite directions.

Market breadth: Breadth was positive and volume was fairly light. On the New York Stock Exchange, winners beat losers by 7 to 1 on volume of 1.13 billion shares. On the Nasdaq, advancers beat decliners 5 to 1 on volume of 2.35 billion shares.

 

Stocks seesaw ahead of corporate results

By Alexandra Twin, senior writerJuly 12, 2010: 6:39 PM ET

NEW YORK (CNNMoney.com) -- The Dow ended higher and the broader market meandered Monday, as investors geared up for the start of the quarterly reporting period, following the biggest week of stock gains in a year.

The Dow Jones industrial average (INDU) added 18 points or 0.2%, while the S&P 500 (SPX) index and Nasdaq (COMP) each gained around 0.1%

Stocks slumped in the morning, turned mixed in the afternoon, before ending little changed, with just the blue chips in the plus column. Microsoft, Intel and select tech shares managed gains, but the stronger dollar dragged on commodity prices and the underlying shares.

Last week, all three major indexes added more than 5% as investors dug back in on anticipation of a strong corporate reporting period following a two-month selloff. Whether the gains were just a bounce after the battering or a new move higher will largely be dependent on what companies have to say in the next few weeks.

"The market tends to move up going into earnings," said Phil Dow, director of equity research at RBC Wealth Management. "But the key is the forward guidance."

Second-quarter profits will likely top forecasts, with Thomson Reuters forecasting a 27% rise from a year earlier. But guidance will be at the forefront of investors' minds, and Dow noted that companies will hardly be willing to go out on a limb considering the questions still surrounding the economic recovery and the impact of the European debt crisis.

After the close, Dow component Alcoa (AA, Fortune 500) reported quarterly earnings of 13 cents per share, beating expectations by a penny and showing a big improvement from a year ago when the aluminum producer posted a quarterly loss. Alcoa also reported higher sales versus a year ago that topped forecasts.

The company also boosted its forecast for aluminum demand to 12% from 10% for 2010. Shares gained 3% after the close.

Railroad operator CSX (CSX, Fortune 500) reported higher-than-expected quarterly sales and earnings, sending shares up in extended-hours trading.

Four other Dow names report this week: Intel (INTC, Fortune 500) on Tuesday, JPMorgan Chase (JPM, Fortune 500) on Thursday and General Electric (GE, Fortune 500) and Bank of America (BAC, Fortune 500) on Friday.

BP: BP is closer to containing the Gulf of Mexico spill and is also reportedly in talks to sell itself or at least some of its assets.

BP (BP) shares jumped 8% after multiple published reports said U.S. oil behemoths Exxon Mobil (XOM, Fortune 500) and another big firm, likely Chevron (CVX, Fortune 500), have sought government approval to make a bid for U.K.-based BP that could be worth $150 billion.

Separately, reports said that a deal with Houston-based Apache could be in the works to sell its stake in the Prudhoe Bay project in Alaska for as much as $10 billion.

In addition, the company said it has made progress with the latest capping system and that the relief well it is drilling should be usable by mid-August, in line with earlier projections.

Company news: Insurance brokerage Aon Corporation (AON, Fortune 500) is set to buy outsourcing company Hewitt Associates (HEW) in a $4.9 billion cash-and-stock deal. Shares of Hewitt jumped 32%, while Aon shares lost 7%.

Playboy (PLA) shares rallied 39% after founder Hugh Hefner proposed to take the company private. Following the announcement, rival Penthouse said it would place a bid.

Weyerhaeuser (WY, Fortune 500) shares jumped 8.3% after the wood products company said it will pay a special dividend of $5.6 billion - a step required as it transitions into becoming a real estate investment trust.

Wall Street reform: Congress plans to resume its work on financial reform this week after it took a summer recess on July 2. A key Republican senator, Scott Brown, R-Mass, announced his support for the Wall Street reform bill on Monday, placing Senate Democrats within one vote of getting around a filibuster and passing the bill.

The final bill includes measures to strengthen consumer protection, shine a light on complex financial products, create a new process for closing so-called "too big to fail" firms, and making them stronger to prevent such failure.

World markets: European markets gained, with Britain's FTSE 100 rising 0.7%, Germany's DAX advancing 0.2% and France's CAC 40 climbing 0.3%.

Asian markets ended mixed. Japan's Nikkei fell 0.4%, Hong Kong's Hang Seng gained 0.4% and the Shanghai Composite rose 0.8%.

Currencies: The euro fell versus the dollar, while the U.S. currency fell versus the Japanese yen.

Commodities: U.S. light crude oil for August delivery fell $1.24 to $74.84 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery lost $10 to $1,199.80 an ounce.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.05% from 3.06% late Friday. Debt prices and yields move in opposite directions.

Market breadth: Breadth was negative and volume was fairly light. On the New York Stock Exchange, losers beat winners by about 2 to 1 on volume of 855 million shares. On the Nasdaq, decliners topped advancers by more than 2 to 1 on volume of 1.78 billion shares.

 

Nikkei opens higher

 

Dow in triple-digit advance

By Alexandra Twin, senior writerJuly 8, 2010: 4:02 PM ET

NEW YORK (CNNMoney.com) -- The Dow rallied Thursday, leading the broader market higher, as investors welcomed a bigger-than-expected drop in jobless claims and a rise in the euro.

The Dow Jones industrial average (INDU) gained 112 points, or 0.6%. The S&P 500 (SPX) added 8 points, or 0.8% and the Nasdaq (COMP) composite gained 13 points or 0.6%. All three indexes were higher in early trading.

The positive mood continued Thursday. The euro's rise to a two-month high versus the dollar, on some optimism about the results of European bank stress tests, also gave stocks some support.

"The report was positive, but we don't see evidence that significant progress is being made to bring down the unemployment rate on a stable or recurring basis," said James King, chief investment officer at National Penn Investors Trust.

Through the end of last week, the major stock indexes dropped more than 15% off the rally highs of late April as investors tried to price in the threat of a so-called double-dip recession. While the selling seems to have tapered off in the short term, stocks remain vulnerable.

"The stock market is not going to get its footing and show overall progress until we can see an improvement in the labor market," said King.

On the move: Gains were broad based, with 27 of 30 Dow issues rising, led by consumer names Procter & Gamble (PG, Fortune 500), Coca-Cola (KO, Fortune 500) and McDonald's (MCD, Fortune 500). Other gainers included Caterpillar (CAT, Fortune 500), 3M (MMM, Fortune 500) and Chevron (CVX, Fortune 500).

Merck (MRK, Fortune 500) said it was closing eight research and eight manufacturing plants as part of its restructuring following its merger with Schering-Plough.

Labor market: Roughly 454,000 Americans filed new claims for unemployment insurance last week, down from 475,000 in the previous week, according to a Labor Department report released Thursday. Economists surveyed by Briefing.com expected 460,000 new claims.

Continuing claims, a measure of Americans who have been receiving benefits for a week or more, fell to 4,413,000 from 4,637,000 in the previous week. Economists expected 4,600,000 continuing claims.

While the drop-in claims was welcome, economists say the nation still has a long way to go before it creates enough jobs to promote growth. The June jobs report, released a week ago, showed a rise in private-sector hiring that was smaller than expected, and a drop in the overall number of jobs.

Retail sales: Sales at the nation's retailers rose for a tenth consecutive month in June, but the pace of consumer spending continues to slow after a burst in the early part of the year.

June same-store sales rose 3.1% versus forecasts for 3.2%, according to tracker Thomson Reuters. Sales rose 2.5% in May and dropped 4.9% in the same month a year ago. The term 'same-store sales' is an industry metric that refers to stores open a year or more.

On the upside, department stores such as J.C. Penney (JCP, Fortune 500), Nordstrom (JWN, Fortune 500) and Macy's (M, Fortune 500) all reported better-than-expected results, while Gap (GPS, Fortune 500) and BJ's Wholesale (BJ, Fortune 500) were among the losers.

Mortgage rates: Long-term rates fell to the lowest point since the 1950s, dropping for a second-straight week. The average rate on a 30-year fixed mortgage fell to 4.57% from 4.58% in the previous week, Freddie Mac reported. Its the lowest rate since Freddie Mac started tracking rates in 1971 and the lowest since the 1950s.

World markets: European markets gained, with Britain's FTSE 100 rising 1.8%, Germany's DAX advancing 0.7% and France's CAC 40 climbing 1.6%.

Asian markets ended higher except for China. Japan's Nikkei rose 2.8%, Hong Kong's Hang Seng gained 1% and the Shanghai Composite fell 0.3%.

Commodities: U.S. light crude oil for August delivery rose $1.07 to $75.14 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery lost $3.10 to $1,195.80 an ounce.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.03% from 2.98% late Wednesday. Debt prices and yields move in opposite directions.

Market breadth: Market breadth was positive. On the New York Stock Exchange, winners beat losers two to one on volume of 580 million shares. On the Nasdaq, advancers beat decliners seven to five on volume of 1.19 billion shares. 

 

Bank stocks ignite big rally

By Alexandra Twin, senior writerJuly 7, 2010: 5:06 PM ET

NEW YORK (CNNMoney.com) -- Stocks surged Wednesday, with the Dow jumping as much as 283 points, as investors came back after the recent bloodletting, spurred on by State Street's improved earnings forecast.

A stronger euro helped propel commodity shares, cooling some worries about the European debt crisis.

The Dow Jones industrial average (INDU) gained 275 points, or 2.8%, its biggest one-day point and percentage gain since June 10.

The S&P 500 (SPX) gained 32 points, or 3.1% for its biggest one-day point and percentage gain since May 27. The Nasdaq (COMP) composite gained 65 points, or 3.1%, its biggest one-day point and percentage gain since May 10.

"A lot of the optimism today was fueled by State Street's pre-announcement," said Jack Ablin, chief investment officer at Harris Private Bank. "Although it's not a company that will be affected by the financial reform package, it's still a financial company and that's helping the sector."

State Street gained nearly 10% after it lifted its quarterly earnings forecast. The KBW Bank (BKX) index, which includes State Street, gained 5.6%.

Stocks were also bouncing in the aftermath of a sell-off that sent the major indexes all down by more than 15% since the late April highs. The indexes lost 5% last week alone and closed at 8-month lows.

Worries about the U.S. economy heading toward a double-dip recession, particularly amid the fallout in Europe, were key to the decline that was stemmed Tuesday.

"We got very oversold on a technical level and so you're seeing a bounce," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

"Since there's nothing happening on the economic front and since the volume is pretty light, we could see this bounce continue for a few days," he said.

Whether the bounce becomes a bigger rally will depend on whether the S&P 500 can hang on to some key technical levels it is flirting with, he said.

The market's ability to move higher will also depend on the results of the European bank "stress tests" as well as what kind of profit guidance U.S. companies give as they begin reporting quarterly results in the next few weeks.

"I think investors have been so focused on news with a glass half-empty bent that they have forgotten there are some positive developments out there," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

"I think State Street reminded people that the earnings are coming out soon and maybe things aren't going to be so bad," Luschini said.

Quarterly results: State Street (STT, Fortune 500) said it will report operating earnings of 92 cents per share on revenue of $2.2 billion in the just-completed quarter. Analysts surveyed by Thomson Reuters were expecting it to report a profit of 74 cents per share on revenue of $2.2 billion.

The regional bank also said it was taking a one-time after-tax charge of 50 cents per share to provide cash for trust funds that are run by its money-management unit, State Street Global Advisors.

On the downside, Family Dollar Stores (FDO, Fortune 500) forecast fiscal fourth-quarter earnings in a range that was short of analysts' estimates, due to the mixed economic outlook and the impact of competitor Wal-Mart Stores.

Among other stock movers, truckers and railroads surged, lifting the Dow Jones transportation (TRAN) average by 3.9%.

Gains were broad based, with all 30 Dow components rallying. In addition to financial components such as JPMorgan Chase, other big Dow gainers included Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500) and 3M (MMM, Fortune 500).

Consumer: The number of Americans behind on their credit-card payments fell to an 8-year low in the first quarter, the American Bankers Association reported Wednesday.

A sustained period of high unemployment and worries about the recovery have caused investors to spend less and banks to lend less.

World markets: European markets gained, with Britain's FTSE 100 rising 1%, Germany's DAX advancing 0.9% and France's CAC 40 climbing 1.8%.

Most Asian markets ended lower, with Japan's Nikkei falling 0.6%, Hong Kong's Hang Seng off 1.1% and the Shanghai Composite rising 0.5%.

Commodities: U.S. light crude oil for August delivery rose $2.93 to $74.91 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery gained $7.90 to $1,203 an ounce.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 2.98% from 2.93% late Tuesday. Debt prices and yields move in opposite directions.

Market breadth: Market breadth was positive. On the New York Stock Exchange, winners beat losers by six to one on volume of 1.34 billion shares. On the Nasdaq, advancers beat decliners almost four to one on volume of 2.18 billion shares. 

 

Dow breaks 7-session losing streak

By Alexandra Twin, senior writerJuly 6, 2010: 5:59 PM ET

NEW YORK (CNNMoney.com) -- The Dow ended higher Tuesday, finishing a volatile session with gains and breaking its seven-session losing streak as investors scooped up certain shares hit in the recent bloodletting.

The Dow Jones industrial average (INDU) added 57 points or 0.6% after having been up as much as 171 points earlier and briefly dipping into negative territory.

The Dow ended Friday's session at an 8-month low, closing lower for seven straight sessions, its worst streak since October 2008. The gains Tuesday broke that streak.

The Nasdaq (COMP) composite gained 2 points or 0.1%, after having risen as much as 44 points in the morning before dipping. Like the Dow, the Nasdaq ended Friday at an 8-month low.

The S&P 500 (SPX) added 5 points or 0.4%. The S&P 500 ended Friday's session at its lowest point in 9 months.

Stocks rallied through the early afternoon, slipped in the mid-afternoon, and seesawed erratically in the last hour of trading.

Selling in retail, transportation and select technology stocks was countered by strength in financial and energy shares.

"I didn't see anything driving the rally this morning other than it's a Tuesday after a holiday, so I wasn't surprised to see it fizzle," said Joseph Saluzzi, co-head of equity trading at Themis Trading.

"This is how the market is going to be for a while, particularly this week when some people are on vacation and there isn't a lot of economic news," he said. "The good thing is we could end up higher in the next few days because it's so volatile."

Concerns about the health of the U.S. economy and what hits it might take from the European debt crisis have dragged on stocks in recent months. On Friday, the major indexes closed at multi-month lows as investors pulled back ahead of a long holiday weekend. All U.S. financial markets were closed Monday in celebration of Independence Day.

Initially, investors followed European markets higher, but stocks ended up losing momentum as the day wore on.

Since peaking in late April, the Dow is down just under 14%, the S&P 500 is off 16% and the Nasdaq is off 17%.

"In the last two months and especially the last two weeks, everyone was focused on the negatives," said Bernard McGinn, CEO at McGinn Investment Management. "But longer term, I'm more optimistic. Companies aren't hiring yet, but other economic conditions continue to improve, just at a slow pace."

Retail stocks: Citigroup cut its targets on a number of retailers for the 2010 to 2012 period, citing a "hangover" for consumer spending in the second half and beyond after the first-quarter binge.

Citi cut its earnings per share forecasts and 12-month price targets on Home Depot (HD, Fortune 500), JC Penney (JCP, Fortune 500), Lowe's Companies (LOW, Fortune 500), Nordstrom (JWN, Fortune 500), Kohl's (KSS, Fortune 500), Macy's (M, Fortune 500), Saks (SKS), Target (TGT, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).

World markets: European markets surged across the board, with Britain's FTSE 100 gaining 2.9%, Germany's DAX advancing 2.2% and France's CAC 40 rising 2.7%.

Asian markets rallied as well, with Japan's Nikkei gaining 0.8%, Hong Kong's Hang Seng up 1.2% and the Shanghai Composite rising 1.9%.

Commodities: U.S. light crude oil for August delivery settled down 11 cents to $71.98 a barrel on the New York Mercantile Exchange, giving up earlier gains.

COMEX gold for August delivery ended down $13.20 to $1,195.10 an ounce.

Bonds: Treasury prices rose, lowering the yield on the 10-year note to 2.93% from 2.98% late Friday. Debt prices and yields move in opposite directions. Treasury markets were closed Monday.

BP: Shares of BP (BP), the beleaguered oil company, rallied 6% after a report said Libya's sovereign wealth fund might invest in the company and the company announced that it would not issue new shares to cover costs associated with the oil spill.

Both Saluzzi and McGinn said that the fallout from the oil spill was also continuing to drag on the markets as investors worried about the depth of the damage to the economy.

Market breadth: Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.32 billion shares. On the Nasdaq, decliners beat advancers two to one on volume of 2.19 billion shares.

Economy: The Institute for Supply Management's index on the services sector of the economy was released after the start of trading. The index fell to 53.8 in June from 55.4 in May. Economists surveyed by Briefing.com expected it to fall to 55. A reading above 50 signals expansion in the sector. 

 

Nikkei opens higher

 

Asian markets revive