Dow up 250 as economy looks stronger

Stocks soar as ADP says private employers added 93,000 jobs in November. The Fed sees modest nationwide growth. Hopes build for a European financial rescue. Auto sales rise.

By Charley Blaine Dec 1, 2010 2:43PM

Charley BlaineUpdated: 7:12 p.m. ET

Call it a Santa Claus rally, or a Hanukkah rally for the first day of the Jewish Festival of Lights.

Fact is, stocks enjoyed their biggest rally since September as economic report after economic report points toward a domestic economy gaining strength.

One report showed a better-than-expected gain in private-sector employment. The Institute for Supply Management's report on November manufacturing suggests the sector is holding its own. Auto sales were generally bullish, with buyers opting for large SUVs and pickups.


The Federal Reserve's Beige Book report described an economy that's showing modest but broad improvement. The New York region, the Midwest and the middle Atlantic states appeared to show the most strength.

The Dow Jones industrials ($INDU) closed up 250 points, or 2.3%, to 11,256.


The Standard & Poor's 500 Index ($INX) surged 26 points, or 2.2%, to 1,206, its first close above 1,200 since Nov. 11. And the Nasdaq Composite Index ($COMPX) shot up 51 points, or 2.1%, to 2,549.

Futures trading suggests the market will open higher on Thursday. The important economic reports are initial jobless claims and pending home sales.


Supermarket operator Kroger (KR) and homebuilder Toll Bros. (TOL) are the top earnings reports.


The Dow was up as many as 270 points before falling back. One reason for the peak was a suggestion the United States might help with a European financial rescue package.


The Dow and S&P 500 had their biggest point gains since Sept. 1. The Nasdaq's gain was its largest since Oct. 5, when it gained 55 points.


The rally was very broad and deep. Volume was solid. The Dow Jones Transportation Average ($DJT) briefly topped 5,000 for the first time since September 2008. The index was up 116 points, or 2.4%, to 4,971.


The rally pushed interest rates higher as the stock market drew cash away from bonds. The 10-year Treasury yield was at 2.964%, up from Tuesday's 2.797%.

It also set off a commodity rally. Crude oil settled up $2.64 to $86.75.


Gold for February delivery settled up $2.20 to $1,388.30 an ounce. Silver for March delivery settled up 20 cents to $28.41 an ounce. Copper added 12.2 cents to $3.9475 a pound.

The dollar was slightly lower against major currencies. The U.S. Dollar Index, a measure of the greenback against a basket of currencies, was off 0.546 to 80.725 at 4:15 p.m. ET.

All 30 Dow stocks were higher, led by Home Depot (HD), up 4.6% to $31.61.


Ninety-six of the stocks in the Nasdaq-100 Index ($NDX.X) were higher, led by Altera (ALTR), up 5.2% to $36.93, and flash-memory maker SanDisk (SNDK), up 5.2% to $46.90.


The Nasdaq-100 was up 48 points, or 2.3%, to 2,165.


Apple (AAPL), the biggest stock in the Nasdaq-100, was up 1.7% to $316.40, adding 7 points to the index's gain. Microsoft (MSFT), up 3.1% to $26.04, added 2.6 points to the index. (Microsoft publishes MSN Money.)

Fewer than a dozen S&P 500 stocks were lower on the day. Building materials manufacturer Masco (MAS) was the leader, up 7.1% to $11.68, followed by Red Hat (RHT), up 6.3% to $46.23, a 52-week high.


Audio-equipment maker Harman International Industries (HAR) added 6% to $46.20. The stock was upgraded to "overweight" from "neutral" by analysts at JPMorgan Chase. They cited luxury-car demand in the U.S. and China as well as the potential for a wider profit margin.

Energy and industrials were the strong market sectors, but all 10 sectors of the S&P 500 were higher. Exxon Mobil (XOM) was up 2.5% to $71.33. Halliburton (HAL) added 3.8% to $39.19, and Cameron International (CAM) was up 3.8% to $49.92.


Energy prices -- New York close
 

Wed.

Tues.

Month chg.

YTD chg.
Crude oil 

$86.75

$84.11

3.14%

9.31%
(per barrel)











Heating oil

$2.4056

$2.3244

3.83%

13.71%
(per gallon)











Natural gas 

$4.2690

$4.1800

2.13%

-23.38%
(per mil. BTU)











Unleaded gasoline

$2.3004

$2.1868

1.55%

12.06%
(per gallon)











Retail gasoline

$2.8640

$2.8540

0.35%

8.53%
(per gallon; AAA)












Auto sales looking decent

Not a bad month for auto sales: Automakers saw deliveries jump 16.9% from a year ago. The seasonally adjusted annual sales rate of 12.26 million units was unchanged from October but up 13% from a year ago.


General Motors (GM) reported an 11.4% increase in November sales from a year ago; Ford Motor (F) chimed in with a 24.3% increase.


Ford retained its position as the No. 2 U.S. seller of motor vehicles after Toyota (TM) reported a 3% sales decline.


Chrysler showed an eighth straight monthly gain, with sales up 17% from a year ago. Results were powered by an 86% increase in sales of Dodge Ram pickups and a 256% gain for Jeep Grand Cherokees.


Also showing strong results: Hyundai (HYMLF), up 45%; Daimler (DAI), the parent of Mercedes Benz, up 10.3%; Kia, up 48%; and Nissan (NSANY), up 26.8%.


GM shares were up 1.7% to $34.78. Ford added 3.3% to $16.46. Despite its sales results, Toyota was up 2.4% in New York to $79.58.


Jobs and manufacturing look stronger
The immediate catalyst for today's rally was a report that the private sector boosted employment by 93,000 in November. The report from Automatic Data Processing also revised its estimate of job gains for October from 43,000 to 85,000.

At the same time, the ISM's manufacturing index registered a small decline from October. The index was at 56.6, where anything above 50 means manufacturing is expanding. The index was above 50 for the 16th straight month.

At the same time, manufacturing in China expanded at the fastest pace in seven months.

And there was speculation from Europe that the European Central Bank will enact measures to contain the  debt crisis when policymakers meet Thursday. 

Stocks briefly extended gains after Reuters reported that the United States may support enlarging a European financial rescue program by adding cash from the International Monetary Fund. But the report was greeted with some skepticism.

Stocks seeing sizable gains
Although this rally lifted nearly all stocks, there were some interesting moves, including:

  • Google (GOOG), up 1.6% to $564.35. The search-engine giant will open an online store for electronic versions of books in the U.S. this year and internationally in 2011.
  • Microsoft's gain came on reports that the software maker expects a five- to 10-year growth spurt in games and 2011 could be the “biggest year ever,” said Dennis Durkin, chief operating officer of the company’s Xbox unit.
  • United Technologies (UTX), up 4% to $78.26. Airbus' announcement that it plans to develop new versions of the A320 series of aircraft with more fuel-efficient engines is “positive” for the maker of Pratt & Whitney jet engines and General Electric (GE), Deutsche Bank AG said in a note. GE was up 3% to $16.30.
  • Consol Energy (CNX), up 4.1% to $43.69. The coal producer was boosted to “strong buy” from “outperform” at Raymond James Financial.
  • Jos. A. Bank Clothiers (JOSB), down 6.7% to $42.03. The maker of men’s apparel posted third-quarter profit of 45 cents a share, missing the 50-cent average analyst estimate.
  • Casino shares advanced after Macau’s casino revenue surged 42% last month. Wynn Resorts (WYNN) was up 3.7% to $104.79. Las Vegas Sands (LVS) added 2.5% to $51.34. Melco Crown Entertainment (MPEL) increased 2.9% to $6.14.
Short hits from the markets -- New York close
 
  Wed.

Tues.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.160%

0.160%

0.00%

220.00%
5-year Treasury note 

1.622%

1.464%

10.79%

-39.61%
10-year Treasury note

2.964%

2.797%

5.97%

-22.87%
30-year Treasury bond

4.237%

4.102%

3.29%

-8.71%
Currencies











U.S. Dollar Index

80.762

81.271

-0.63%

3.25%
British pound

$1.5635

$1.5567

0.42%

-3.35%
(in U.S. $)











U.S. $ in pounds

£0.640

£0.642

-0.42%

3.46%
Euro in dollars

$1.315

$1.299

1.20%

-8.27%
(in U.S. $)











U.S. $ in euros

€ 0.761

€ 0.770

-1.18%

9.02%
U.S. $ in yen 

84.388

83.640

0.68%

-9.26%
U.S. $ in Chinese

6.686

6.667

-0.12%

-2.05%
yuan











Canada dollar

$0.98

$0.98

0.83%

3.42%
(in U.S. $)











U.S. dollar 

$1.02

$1.02

-0.81%

-3.31%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,388.30

$1,386.10

0.24%

26.65%
(per troy ounce)











Copper

$3.95

$3.83

3.26%

17.96%
(per pound)











Silver

$28.41

$28.21

0.81%

68.67%
(per troy ounce)











Wheat 

$6.98

$6.50

7.23%

28.81%
(per bushel)











Corn

$5.52

$5.30

4.10%

33.11%
(per bushel)











Crude oil 

$86.75

$84.11

3.14%

9.31%
(per barrel)











86Comments
Dec 1, 2010 6:34PM
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Jobs? What jobs? Ohhhhh, you mean the seasonal employment that will be over by january. Dont smile while you lie Charley, those of us that have a brain get really offended. Although you have a few sycophantic sheeples that you can fool regularly, those of us who see right through yours and the govt's BS, have about had it. What the govt doesnt take outright, its given to illegals in the form of welfare, food stamps and a host of other programs meant for us in OUR time of need. Those programs, that we have spent our entire lives paying into, are being sucked dry by illegals, when we, real americans, finally need them, but theres nothing there anymore...pathetic! Time to do something ourselves folks, the govt sure as HELL wont! Theres a storm brewin CharleyLightning...the likes of which hasnt been seen since the last revolutionary/civil wars. Hope it doesnt come to that, but I see no other way. The govt refuses to listen to us, much less care, and the illegals just dont give a sht and wont stop till they take it all! Political correctness will be the death of this country, not terrorism. See you on the front lines Americans. WE need to take this country back, one way or another. Good luck.
Dec 1, 2010 5:32PM
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OMG.  Even my losers were up today.Nerd

Dec 1, 2010 5:23PM
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The stock market doesn't run the world.  The rich do.  The market is just one of their tools. Big business and politicians got together and decided that the rich could make more money if they put an end to retirement pensions and forced everyone to accept a 401k.  And they've been rewarded handsomely.  Of course the average American has lost most of their investement along with their job.
Dec 1, 2010 3:40PM
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So, let me get this straight...

 

Wall Street bounces up 200 points and millions are set to lose their unemployment benefits. Does anyone but me see the significance?  Follow the money, always follow the money.

Dec 1, 2010 6:18PM
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Sorry to burst the bubble, but the majority of these jobs were seasonal part time hires.  They will disappear in the first week in January 2011.  It's too bad that investors and your pension fund manager are so desperate to throw hard earned money away without an in-depth look at what industries actually hired (i.e.- retail) and what type of jobs were involved.  just goes to prove that most fund managers and individual investors learned nothing from the last 3 years.
Dec 1, 2010 5:13PM
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Keep an eye for the unemployment numbers to go down for the rest of the year if they don't extend benefits. The government keeps tally only by the number of new and open claims there are. So if your claim runs out and you have no extensions you are no longer counted as the unemployed. So the federal, state and local governments will report that the unemployment rates are going improving! But this government can vote in pay raises, give social services to new (legal/or illegal) imigrants. Help them buy interest free homes, give them welfare for ever, they don't have to pay the taxes that we do. I could just go on for ever. And spend all our social security money and have to srcamble each month to pay out to deserving people. What Gives my fellow AMERICANS?????
Dec 1, 2010 3:53PM
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Really folks...93,000 jobs at Christmas time. I'm no economics major, but this doesn't mean squat on SO many levels 1) It's seasonal work at best. Let's see those numbers again in January/February- it's just like the media reporting last weekend that store TRAFFIC was up for Thursday/Friday 9% (But what they failed to mention is SALES were only up .3%, and that is with so many stores being open Thanksgiving this year-that's horrendous, and wait until you see what happens the rest of the month. Sales for the 2010 sales season will be static or a little below last year.  2) The stock market HAS to rally for a MINIMUM of (30) days to be a real indicator that things MAY be getting better, but a day or two rally, come on. 3) Job loses AREN'T slowing...And I CAN prove that jobs and the economy are worse under Obama. Last year during the same period roughly 89,000 jobs were added as seasonal work. Only 8% kept their jobs, and then the unemployment rate stated falling again in February. Obama ISN'T addressing the unemployment issue, like he said. It's a rudderless ship, people, and Obama isn't the messiah!        
Dec 1, 2010 5:11PM
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What is the reason for this one Charley B.?

 

It also set off a commodity rally. Crude oil settled up $2.64 to $86.75.

All smoke and Mirrors.

Dec 1, 2010 4:25PM
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Mark Johnson and Morgan,

Your condescending comments are clearly not based on your superior knowledge.  How about an adult dialogue rather than ideological assertions?

If you would like to know whether the 93,000 new jobs in November are seasonal, as you proclaim, you might take the time to do a little research on the Bureau of Labor Statistics website.  The BLS has developed seasonal adjustments based on decades of research in order to remove seasonal swings in the numbers.  They may not always get it exactly right, but they do attempt to remove the effect.  So, if you have no agenda other than the truth, check it out, it's free!

Dec 1, 2010 3:51PM
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Just remember, this all happened before the Rethugnicons took office.
Dec 1, 2010 3:31PM
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I think they're a little over optimistic about this. Most of the single people I know are working 2 or even 3 jobs just to make ends meet or don't have a job at all. Nice try at disguising how bad things really are but we aren't stupid. We need more jobs than ever because one pay check just isn't enough anymore. This seems to be the generation that is literally going to work itself to death just to able to afford the basics needed for survival. It's certainly a sad state that the world has gotten itself into.
Dec 1, 2010 3:29PM
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To ffcopala:  You blame Bush for this? Really. Obama has been in office for two years but Bush is still responsible. Just like a Liberal. It's never the Democrats fault. If there were a Liberals in the White House and Congress for the next 50 years and the economy was in a depression you would still be blaming Bush. Grow up!!!!!

Dec 1, 2010 3:26PM
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and tomorrow, it will drop 200 pts and doom and gloom again.........
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Breaking news: Dow jumps 200 points driven by professional day traders efforts to hammer the casual investors while planning a new vacation home as a xmas gift to their families!
Dec 1, 2010 3:23PM
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BroncoTed, who's the idiot here besides Mr. Blaine? These are seasonal jobs. They'll be gone in January. This is a game that Dow investors play in order to engage in profit taking. I am unemployed and living in Detroit. Unless I want to work for minimum wage until I get termed in January there are NO jobs. Unemployment pays more. So Charley can do his job and report the numbers but they are very misleading
Dec 1, 2010 3:19PM
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Nightmares before Christmas. 2 million lose jobless benefits as holidays arrive, cutting off a steady stream of income and guaranteeing a dismal holiday season for people already struggling with bills they cannot pay.

California's 12.4 percent unemployment rate is so high, the third-highest in the nation and the federal benefits have been a lifeline for long-term unemployed workers struggling to pay for basic expenses. In California, the average unemployment check is $297 a week.

42 Senate Republicans threatened to block virtually all legislation. Unless Congress changes its mind, benefits that had been extended up to 99 weeks will end this month. Conservative Republican concerns about deficit spending have made extending them further a deeply divisive political issue, with some conservatives arguing that extending unemployment benefits keeps people from taking lower-wage jobs.

"Republicans have pleaded with Democrats to put aside their wish-list to focus on the things Americans want us to focus on. They've ignored us. The voters repudiated their agenda at the polls. They've ignored them. Time is running out. They're ignoring that," Senate Republican Leader Mitch McConnell of Kentucky said

Americans spiraling into a financial hole that grows deeper every day. People are squeaking by. They've lost their homes and moved in with relatives. "We are not searching for a job, we are begging for one: You don't even get in the frame of mind for Christmas when things are bad. It's hard to be in a jovial mood all the time when you've got this storm cloud hanging over your head."

 

Dec 1, 2010 3:17PM
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I'll hold off on popping my bottle of champagne until I see how many of these private-sector jobs are temp jobs for the holidays.  There's usually a spike in hiring around this time of year.
avatar

I don't understand you people.  If the dow crashes, it is bad.  If it soars, it is deceitful.

 

You fricking dumb asses.  Quit believing the crap Fox spoons feeds you. Quit bitching and moaning about everything.  Learn to have an original thought for once and stop reading from the Glenn "Drug Addict" Beck Book of Non Sense.

 

Oh yeah..  Bush and Cheney put the country where it is.  Face it.  Deal with it.  Accept it.

Dec 1, 2010 11:21PM
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I expect to get hammered for what I'm about to say.  Most Americans have no idea how poor the majority of the world's population is.  Only 20% of americans have a passport. 50% of people worldwide live on the equivalent of 2 dollars a day or less. 50% have no access to clean drinking water.  Malaria still kills 2 million people worldwide every year. People are still living grass huts and shanties only a short flight from the U.S.  We as Americans are probably the most fortunate people to ever inhabit the Earth. Poverty in America comes with hot water, heat, food stamps, cable TV, AC and internet access.  Globalization is leveling the playing field.  On a selfish level I don't like the fact that we will have to become accustomed to a lower standard of living.  But as a person that has traveled the world and seen real poverty first hand my compassionate side tells me that what is happening in the world today is only fair. We've had it too good for too long. We, as a nation are spoiled rotten. So much of what we buy is made in Third World sweat shops by desperate people just trying to survive. I'm just sayin'.
Dec 1, 2010 11:05PM
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You really want to see the stockmarket ralley GET RID OF OBAMA AND THE DEMONCRATS AND THEIR SPEND TAX SPEND ECONOMICS AND PUT SMALL BUISNESS BACK IN THE LOOP and within one year our economy would be alot better off that what it is now. Take the challange and see.
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