4th quarter opens with small rally

Despite a big September, stocks end the week lower. A weaker-than-expected manufacturing report disappoints. Personal spending rises. Auto sales are decent. Gold hits a new high.

By Charley Blaine Oct 1, 2010 1:51PM

Charley BlaineUpdated: 6:12 p.m. ET

 

Stocks opened the fourth quarter with a modest rally Friday built on gains in energy, metals and financial shares and a decent report on consumer spending.


But the rally was held back by a report showing slower manufacturing growth.

Gold, silver and crude oil were all higher.  Ford Motor (F), General Motors and Chrysler reported reasonably strong September sales. A report on the causes of the May 6 "flash crash" had little effect on markets.

The Dow Jones industrials ($INDU) rose 42 points to 10,830. The Standard & Poor's 500 Index ($INX) added 5 points to 1,146, and the Nasdaq Composite Index ($COMPX) was up 2 points to 2,371 after being down for much of the day.

Stocks seeing large amounts of activity:

  • Accenture (ACN), up 4.5% to $44.38. The world’s second-largest technology  consulting firm forecast revenue of $5.6 billion to $5.8 billion for the quarter ending in November, compared with the consensus estimate of $5.62 billion.
  • Avis Budget Group (CAR), up 0.6% to $11.72. Hertz Global Holdings (HTZ) ended its bid to acquire DollarThrifty Automotive Group (DTG) after shareholders rejected the deal. So, Avis can close its $1.53 billion takeover offer. Hertz slid 5.5% to $10.01.
  • Gymboree (GYMB), up 20% to $49.86. The children’s apparel retailer is considering putting itself up for sale, according to The Wall Street Journal.
  • Imax (IMAX), up 6.9% to $18.02. The developer of the giant-screen projection system and Regal Entertainment Group (RGC) will expand a joint venture by adding as many as 25 big-screen cinemas. Regal added 0.8% to $13.22.
  • United Continental Holdings (UAL), up 4.4% to $24.70. United Continental is the result of the completion of the $3.2 billion merger of United Airlines parent UAL and Continental Airlines.
  • Christopher & Banks (CBK), down 15.7% to $6.67. The women's clothing retailer posted a second-quarter loss of 6 cents a share after one-time items, 15% bigger than the Street consensus.
Markets for the week



10/1/2010

9/24/2010

% chg.

YTD chg.
Dow industrials

10,829.68

10,860.26

-0.3%

3.9%
S&P 500

1,146.24

1,148.67

-0.2%

2.8%
Nasdaq 

2,370.75

2,381.22

-0.4%

4.5%
Russell 2000

679.29

671.01

1.2%

8.6%
Crude oil 

$81.58

$76.49

6.7%

2.8%
(per barrel)











U.S. Dollar Index 

78.31

79.60

-1.6%

0.1%
10-yr. Treasury

2.53%

2.61%

-3.3%

-34.3%
Gold

$1,317.80

$1,298.10

1.5%

20.2%
(per troy ounce)












The modest rally emerged after an early surge today ran out of gas. The quarter begins with a tough act to follow: the best September performance of the stock market since 1939.

The Dow finished the week down 0.3%, with the S&P 500 down 0.2% and the Nasdaq off 0.4%. These were the first weekly losses after five weeks of gains.

Gold settled up $8.20 to $1,317.80, a new closing high and up 1.5% on the week. Gold hit a new intraday high of $1,322.

Crude oil settled up $1.61 or 2% to $81.58 as the dollar continued to move lower against major currencies.  Crude was up 6.7% on the week.

Interest rates were higher, with the 10-year Treasury yield falling to 2.526% from 2.517% on Thursday.

Thanks to crude's big gain, the energy sector of the market was the day's strongest. Also showing strength were financial stocks. JPMorgan Chase (JPM) and Bank of America (BAC) were the top performers among the 30 Dow stocks, up 2% to $38.81 and 1.5% to $13.30, respectively. Citigroup (C) rose 4.6% to $4.09.

The laggard was Hewlett-Packard (HPQ), down 3.1% to $40.77. The reason: Investors and rivals were skeptical of HP's choice of Leo Apotheker as its new CEO. Apotheker is a former CEO of German software maker SAP (SAP).

Twenty-three Dow stocks were higher. In addition, 68 Nasdaq-100 ($NDX.X) stocks were higher, led by Infosys Technologies (INFY), up 4.8% to $70.52.

The Nasdaq-100 Index, however, was down 1 point to 1,997 on weakness in Qualcomm (QCOM), Apple (AAPL), Baidu (BIDU) and Amazon.com (AMZN).

Energy prices -- New York close
 

Fri.

Thur.

Month chg.

YTD chg.
Crude oil 

$81.58

$79.97

2.01%

2.80%
(per barrel)











Heating oil

$2.2938

$2.2678

-5.99%

8.42%
(per gallon)











Natural gas 

$3.8530

$3.8720

-1.94%

-31.86%
(per mil. BTU)











Unleaded gasoline

$2.0861

$2.0361

2.02%

1.62%
(per gallon)











Retail gasoline

$2.6920

$2.6890

0.11%

2.01%
(per gallon; AAA)












The economy speaks

Personal incomes gained 0.5% in August after increasing 0.2% in July. Personal spending rose 0.4% in August, unchanged from July, the Commerce Department said. Economists had expected incomes to climb 0.3% and spending to grow 0.3%.

 

The Thomson Reuters/University of Michigan consumer sentiment index rose to 68.2 in September from its preliminary reading of 66.6. The final figure beat expectations for a reading of 67 but was less than 68.9 in August.


The Institute for Supply Management said its purchasing  managers index fell to 54.4 in September from 56.3 in August. Economists had expected a reading of 54.8. A reading above 50 means manufacturing is still growing.

 

Construction spending grew 0.4% in August, beating estimates of a decline of 0.7%. The index had fallen 1.4% in July, the Commerce Department said.


GM sales up 11%; Ford and Chrysler sales jump

GM said its September sales were up 11% overall to 173,000 units and 22% if you look only at its core brands: Chevrolet, Buick, Cadillac and GMC. Those four had sales of 172.969 units. The sale gain drops when discontinued brands are included.

Ford Motor sales were up 46% to 160,873, and Chrysler sales jumped 61% to 100,077.

Toyota Motor (TM) reported September sales of 147,162, up 16.8% ifrom a year ago.

"Consumers are willing to spend, albeit cautiously," Don Johnson, GM's vice president of U.S. sales, said today on a conference call with analysts. The industrywide selling rate for the month may be 12 million, he said.

Market researcher Autodata Corp. reported that September sales produced a seasonally-adjusted annual selling rate of 11.8 million vehicles, up slightly from July and up 25.4% from September 2009. The year-over-year gain was due to new models and the auto market adjusting from sales declines last year from the end of the Cash for Clunkers program.

Automaker sales for September
Company 

Sept. '10

Sept. '09

Chg.
GM total 

173,155

156,673

10.52%
General Motors core brands*

172,969

141,691

22.07%
Ford total 

160,873

109,939

46.33%
Toyota 

147,162

126,015

16.78%
Chrysler 

100,077

62,197

60.90%
Honda

97,361

77,229

26.07%
Nissan

74,205

55,393

33.96%
Hyundai

46,556

31,511

47.75%
Kia

30,071

21,623

39.07%
Subaru 

21,432

14,593

46.86%
Daimler 

21,088

17,799

18.48%
Volkswagen

19,943     17,358     14.89%
Mazda

18,580

14,234

30.53%
BMW

18,228     15,047     21.14%
Volvo

4,152     4,716     -11.96%
Suzuki 

1,641     1,861

-11.82%
*GM's core brands are Chevrolet, Buick, Cadillac and GMC

Company news: Microsoft, Wal-Mart, Humana and Repsol

Microsoft (MSFT) will release a line of smart phones through AT&T (T), The Wall Street Journal said. Microsoft shares were off 0.5% to $24.38. AT&T was up 0.7% to $28.81. (Microsoft is the publisher of MSN Money.) Microsoft also filed a patent infringement suit against Motorola (MOT), arguing Motorola's Android-based phones violate nine Microsoft patents.


Wal-Mart (WMT) and health insurer Humana (HUM) plan to introduce the cheapest prescription drug coverage in the U.S. to Medicare recipients. Wal-Mart shares were down 0.3%
to $53.36.

 

Spanish oil and gas company Repsol (REP) and China-based oil company Sinopec (SNP) formed a Brazil joint venture worth $17.8 billion. Repsol shares were up 6.8% to $27.47 in New York. Sinopec shares in New York rose 0.7% to $88.92.


Short hits from the markets -- New York close
 
  Fri.

Thur.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.150%

0.150%

0.00%

200.00%
5-year Treasury note 

1.271%

1.281%

-1.78%

-52.68%
10-year Treasury note

2.526%

2.517%

0.08%

-34.27%
30-year Treasury bond

3.721%

3.687%

0.65%

-19.82%
Currencies







 

 
U.S. Dollar Index

78.313

78.938

-0.79%

0.12%
British pound

$1.5833

$1.5718

0.71%

-2.12%
(in U.S. $)











U.S. $ in pounds

£0.6316

£0.6362

-0.71%

2.17%
Euro in dollars

$1.3768

$1.3633

0.80%

-3.94%
(in U.S. $)











U.S. $ in euros

€ 0.7263

€ 0.7335

-0.79%

4.10%
U.S. $ in yen 

83.47

83.47

-0.25%

-10.24%
U.S. $ in Chinese

6.71

6.69

-0.07%

-1.64%
yuan











Canada dollar

$0.980

$0.971

0.79%

3.01%
(in U.S. $)











U.S. dollar 

$1.022

$1.030

-0.79%

-2.92%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,317.80

$1,309.60

0.63%

20.22%
(per troy ounce)











Copper

$3.6905

$3.6515

1.07%

10.28%
(per pound)











Silver

$22.0600

$21.8210

1.10%

30.96%
(per troy ounce)











Wheat 

$6.5500

$6.7400

-2.82%

20.96%
(per bushel)











Corn

$4.6575

$4.9575

-6.05%

12.36%
(per bushel)











Crude oil 

$81.58

$79.97

2.01%

2.80%
(per barrel)










 
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