Stocks finish at 2-month highs
Worries that the Strait of Hormuz may get blocked push oil prices up some 4%. Brent crude tops $100. US factory orders grow in May. June auto sales are strong; SUVs do well. Barclay's CEO quits. Microsoft takes a $6.2 billion writedown.
Updated: 8:52 p.m. ET
Stocks finished a holiday-shortened day at their best levels in two months in a rally built on geopolitical worries.
Fears that Iran might block the Strait of Hormuz briefly pushed crude crude oil (-CL) above $88 a barrel in New York. Brent, the benchmark North Sea crude oil, passed $100 for the first time since June 6. Gold (-GC) also moved higher.
The crude surge set off a big rally in oil- and gas-production stocks and oil-services stocks. The energy sector of the Standard & Poor's 500 Index ($INX) was up more than 2.5% and was the top-performing sector of the index.
Markets are closed Wednesday for the July 4 holiday.
Oil's gains came as auto sales for June were better than expected, with Chrysler, General Motors (GM) and Ford Motor (F) all beating expectations. Toyota (TM) sales missed estimates but were up more than 60% from a year ago. Meanwhile, factory orders in May were better than expected, cheering many investors worried that manufacturing was softening.
The Dow Jones industrials ($INDU) closed up 72 points to 12,944, close to their high on the day. The S&P 500 gained 9 points to 1,374, and the Nasdaq Composite Index ($COMPX) rose 25 points to 2,976. The Dow's close was its best since May 7. The S&P and Nasdaq had their best finishes since May 3.
Article continues below.
U.S. stock markets closed at 1 p.m. ET. Futures markets were scheduled for a normal day of trading. Markets will operate normally on Thursday.
Tensions rise in the Persian Gulf region
Crude oil settled at $87.66 a barrel in New York, up $3.91, or 4.7%, on the day. Brent crude was up $3.27 to $100.61 a barrel at 3 p.m. ET; it had traded as high as $101.58.
Light sweet crude, the benchmark U.S. crude, is up 12.8% since Thursday's close of $77.69 a barrel. Brent is up 12.8% since hitting a bottom on June 21.
The Strait of Hormuz is the narrow pass through which oil tankers must travel to leave the Persian Gulf. Some 20% of the world's crude oil passes through it. To block the pass would cause major disruptions in the world's oil markets.
The tensions are rising because of Western efforts to get Iran to halt its nuclear development program. Western nations are imposing sanctions on Iranian crude.
The United States was reported to have significantly increased its military presence in the Persian Gulf region, The Guardian newspaper in London reported. The U.S. doubled the number of its minesweepers while bringing in stealth warplanes, in part as a deterrent to any Iranian attempt to close the strait.
In a war-games exercise, Iran test-fired medium-range missiles capable of hitting US bases in the region or Israel. The Iranian parliament called an urgent debate on a bill to block at least some oil tankers in the Gulf, and there were reports that the leadership might be considering announcing a new, higher level of uranium enrichment.
Energy shares surged with crude. Chevron (CVX) was up $1.51 to $107.37. Exxon Mobil (XOM) added 94 cents to $86.28. Anadarko Petroleum (APC) rose $3.39 to $69.05.
Gold settled up $24.10 to $1,621.80 an ounce, a two-week high. Freeport-McMoRan Copper & Gold (FCX) was up $1.33 to $35.21. Newmont Mining (NEM) added $1.24 to $49.73.
Silver (-SI) climbed 78 cents to $28.28 an ounce. Copper (-HG) rose 7.1 cents to $3.54 a pound.
|Energy prices -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|Crude oil (-CL)||$87.66||$83.75||3.18%||-11.30%|
|Heating oil (-HO)||$2.7585||$2.6759||1.79%||-5.34%|
|Natural gas (-NG)||$2.8990||$2.8240||2.66%||-3.01%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.7229||$2.6239||3.46%||2.46%|
|(per gallon; AAA)|
Factory orders rebound
Orders placed with U.S. factories rose in May for the first time in three months, easing concern that manufacturing is faltering. The 0.7% increase in bookings followed a revised 0.7% drop in April, the Commerce Department said.
Outside of primary metals (down by 1.8% and likely reflecting price effects) and weakness in computers and electronics (-0.1%), there were broad increases in orders across the board in May, Nomura Securities noted, but that comes after two straight months of broad-based weakness in orders across many categories.
A decent month for auto sales
General Motors and Chrysler reported double-digit sales of new vehicles in June as the auto industry was helped by lower gas prices and steady demand. Ford sales were up 7%. Most other manufacturers also reported higher U.S. sales.
The industry was sold vehicles at a seasonally-adjusted annual rate of 14.1 million units, up 2.2% from May's sales rate of 13.78 million units and up 21.8% from June 2011's rate of 11.56 million units. It was fifth month out of six so far in 2012 that the sales rate has been above 14 million units.
The automakers reported total sales for the month of 1.29 million units, up from 1.05 million units in June 2011 and 1.33 million units in May 2012.
The gains will be offset by lower sales in Europe. Ford and GM have already warned that their European operations are likely to show sizable second-quarter loses.
GM said today that its sales in the United States increased 15.5% during the month to 248,000 vehicles, which the company said was its best monthly performance in nearly four years.
Chrysler reported a 20% increase over the previous year, marking its best June sales since 2007. Ford said its June sales rose 7%, with sport utility vehicles and trucks leading the way.
The results beat analysts’ expectations, as the overall auto industry continued its methodical recovery from the recession.
Toyota's big sales gain was distorted by the 2011 Japanese earthquake and tsunami that disrupted the manufacturing of auto parts.
Volkswagen sales were up 28.7%
Stocks of all the automakers were higher.
If there was a downside, it came in heavy trucks reported by Ford and GM. The total was 555 in June, down from 568 in May and 722 a year ago. Heavy truck sales for the companies this year peaked in April with 692 deliveries. Some of that decline, CNBC's Jim Cramer suggested earlier this week, may be to a slowdown in oil-and-gas drilling this spring.
LIBOR scandal claims a big victim
The market's gains overshadowed the growing banking scandal in Britain over manipulation of interest rates.
Robert Diamond, the CEO of Barclay's (BCS), Britain's largest bank, resigned as the implications of a global probe into bid-rigging involving the London Interbank Offering Rate grew. Jerry del Missier, named chief operating officer only last month, also stepped down.
The scandal involves traders from at least 12 other global banks agreeing to manipulate the LIBOR rate. This is the benchmark rate that banks use to lend money to each other and is used to price everything from credit card rates to complex financial derivatives. Calculated daily, it depends on information supplied by banks. But Barclay's traders were able to manipulate the data to boost the bank's profits.
Barclay's American Depositary Units (ADR) were off 23 cents to $10.54 in New York.
JPMorgan shares drop; market shrugs off Microsoft write-off
JPMorgan Chase (JPM) shares fell 10 cents to $35.88 after influential analyst Meredith Whitney downgraded the stock to "hold" from "outperform."
The stock has been pummeled after the banking giant revealed a trading loss in May estimated at $2 billion. Many analysts peg the loss at considerably more than $2 billion, probably around $4 billion. JPMorgan releases its second-quarter earnings release on July 13 and is expected to offer more details about the problem.
Traders shrugged off Microsoft's (MSFT) announcement late Monday that it was writing off virtually all of its $6.3 billion purchase of aQuantive, a Web marketing company. Shares were up 20 cents to $30.65. (Microsoft publishes MSN Money.)
Facebook (FB) shares were up 43 cents to $31.20 after two days of declines. One potential reason for the gain was news that General Motors may advertise on Facebook again. The companies have traded thoughts on how GM could get better results from ads on Facebook.
|Short hits from the markets -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0800%||0.070%||0.00%||700.00%|
|5-year Treasury note||0.697%||0.669%||-4.39%||-16.02%|
|10-year Treasury note||1.631%||1.580%||-1.69%||-12.83%|
|30-year Treasury bond||2.744%||2.683%||-0.69%||-5.02%|
|U.S. Dollar Index||81.872||82.008||-1.37%||1.68%|
|(in U.S. $)|
|U.S. $ in pounds||£0.637||£0.637||0.03%||-1.03%|
|Euro in dollars||$1.26||$1.26||-0.50%||-2.65%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.793||€ 0.794||0.51%||2.72%|
|U.S. $ in yen||80.00||79.52||0.10%||3.76%|
|U.S. $ in Chinese||6.37||6.34||0.38%||0.76%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$87.66||$83.75||3.18%||-11.30%|
It's President Obamas fault that the stock market is up!! If your going to blame him when it's down, you have to blame him when it's up!! Happy early 4th of July!!
PS What does The Affordable Care Act have to do with this article? It's a done deal. The Supreme Court said so. Stop whining. Start thinking about how to make the law better, not how to start the process all over again! Health care has been talked about for 50 years or more!! This President FINALLY got something accomplished that will help MILLIONS of people while only penalizing less than 1% of the people WHO CAN AFFORD IT BUT CHOOSE NOT TO INSURE THEMSELVES!
And then WE pay for THEM in HIGHER PREMIUMS. READ IT before you say things that are obviously misleading, if not downright lies!
Classic, I guess you stand against these Republicans who all supported a individual mandate before Obama passed it.
The Heritage Foundation
Were not paying for your free loading any more Classic, you'll have to pay like every one else, stop crying about it and up!
Obama just cannot affor to lose the next elections......
Michelle don't want him to move back in anymore...so what's going to happen?
If Obama can't screw Michelle, he will keep screwing us, that's what!
>>>my children and grandchildren will not have the same opportunity that I was gifted. And if they do, it will be with a greater level of difficulty<<<
And you're blaming that on the last 3.5 years????
By the way: Grammar - It's the difference between knowing your sh*t and knowing you're sh*t.
i have lost faith in "We the People",
Not to worry, so has our government, whether it be democratic or republican controlled.
Well I can't lend much to some of this bullshidt....So guess I'll leave, go get a cold one.
BTW.......In case you missed it....Another Great day in the markets.
total fabrication !! yesterday manufacturing slow TODAY IT IS GOOD this is total BU- - SH-T. TELL WALLY WORLD CINTON SAID SHE WAS SORRY SO PAKAISTAN IS LETTING TRUCKS ROLL PRICE HIKE NOT NEEDED. OIL SHOULD GO DOWN IF SPECULATORS LET IT.
Hey Charlie... I'm having trouble locating the Ticker Symbol for: Hope and Speculation. According to your info on what's a winner, these two are always in the forefront.
A long time ago (it seems) on MSN Message Boards Forum a galaxy apart from these commenting areas... we discussed the theory of the "bottom". It would be hard to discern because there would be extreme volatility, instability and stress. We said-- no one will be able to tell the bottom because we will be too caught up with just trying to stay afloat.
Funny thing about Reality... We the People indeed are gripped with volatility, instability and stress, but wealthy and finance are-- fat with cash, holding massive positions that neither rise nor fall without the nod of the investment cartel (not the market) and aren't stressed at all because they have OUR money in the worst stuff. As crazy as it may seem... is all of this happening because a few super greedy people actually want to KNOW the bottom and scam the rest us to buy up deals cheap? The markets are all near-peak. That suggests a leap off a steep cliff, not a settling to the bottom.
It's always amusing to find so many Repuglican/Tea Bagger right wing-nuts figthing the Devocratic/Dysfunctional Party left wing tree-huggers over what's left of the scraps the Wall Street, Banker, and Corporate Robber Barons choose to leave us in this pig sty we call the American Dream.
After watching and learning for so many years.. i have lost faith in "We the People", becusae we've become so obsesses with what this person is doing is his/her bed or what that person is doing to her body, or the F*&king Kardashians, or the latest "Amercian Idol" of that Scientist(ologist) "Maverick" Cruise missle... we've actually forgotten how to care for each other and this bg blue marble, that we live on, and we are f*%king up beyond repair.
A%%holes... Health care is GOOD... I dont give a sh!tif its called "Obamacare" or "Romneycare" or "IDONTF*&INGCARE"... it's good for "we the people" so we dont go bankrupt trying to live that American Dream.
and taxes... "ooooh... i said a dity word"... well they pay for the g*d damn infrastructure and support systems that are supposed to make this country a great country.... you know, like roads, airports, schools, police, fire departments, brides, tunnels, safe food, safe drugs (where?), safe drinking water... you know, the sh!t that the extremists in the "red" party thinks is free... and just happens,,,
(hey, how come the republican party has the coler of "red"... are they commies or somethig!!)
Stop blaming everybody and start blaming yourselves for this mess we are in...
you're all like the kindergartners who, when asked, spilled the paint of broke the toy al say...
signing off, frequency change approved, over and out.
Here we go Wall Street hears a little maybe bad news and pushes oil up again. I am getting tired of being pushed around by rip off fill my pockets full of some one elses cash brokers. Brokers
are crooks and thieves.
Fat Cat, As a fiscal conservative, what incentive do I have in voting for Romney. Every Republican President since Tricky Dick has made a point of over spending and increasing government size.
Reagan the economy grew at 3.4%, government grew at 6.8% - socialism
Bush Jr. the economy grew at 2.09%, government grew at 7.7% - socialism
Clinton the economy grew at 3.88%, government grew at 3.5% - austerity
Obama the economy is growing at 2%, government is growing at 1.4% - austerity
Sense Republicans have a history of expanding government, especially when they controlled all houses during Bush, spending at 5 times more than the current rate. How can I possibly trust Romney the most liberal Republican candidate, not to continue the massive increases in government spending and expansion of entitlements and agencies enacted by the Republicans of Christmas Past.
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[BRIEFING.COM] The major averages remain near their flat lines as the final session of the week continues in quiet fashion. Interestingly, even though the key indices have spent the bulk of the trading day near their unchanged levels, the Treasury market has not behaved in the same fashion.
The 10-yr note currently trades at its lowest level of the session after a steady retreat. The benchmark 10-yr yield is now higher by seven basis points at 2.70%. It is worth mentioning that ... More
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