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.

By Charley Blaine Jul 3, 2012 12:32PM

Charley BlaineUpdated: 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.

The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, gained 21 points to 2,646, its best finish since May 13. The index was led by gains in Netflix (NFLX), Micron Technologies (MU) and Green Mountain Coffee Roasters (GMCR). Apple (AAPL), the biggest influence on the index, rose $6.89 to $599.41, contributing 5.8 points to the gain.

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%
(per barrel)











Heating oil (-HO)

$2.7585

$2.6759

1.79%

-5.34%
(per gallon)











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)











Brent crude 

$100.68

$97.34

2.94%

-6.24%
(per barrel)











Retail gasoline

$3.3290

$3.3260

-0.72%

1.62%
(per gallon; AAA)












F
actory 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.
Treasury yields











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%
Currencies











U.S. Dollar Index

81.872

82.008

-1.37%

1.68%
British pound

1.5699

1.5699

-0.03%

1.04%
(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%
yuan











Canada dollar

$0.988

$0.984

0.35%

0.71%
(in U.S. $)

 








U.S. dollar 

$1.013

$1.016

-0.27%

-0.70%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,621.80

$1,597.70

1.10%

3.51%
(per troy ounce)

 








Copper (-HG)

$3.540

$3.469

1.24%

3.03%
(per pound)

 








Silver (-SI)

$28.2800

$27.4990

2.42%

1.31%
(per troy ounce)

 








Wheat (-ZW)

$7.9925

$7.7250

5.55%

22.44%
(per bushel)

 








Corn (-ZC)

$6.7450

$6.558

6.26%

4.33%
(per bushel)

 








Cotton 

$0.7260

0.7202

1.78%

-20.81%
(per pound)

 








Coffee

$1.8045

1.746

5.71%

-21.42%
(per pound)

 








Crude oil (-CL)

$87.66

$83.75

3.18%

-11.30%
(per barrel)










 

71Comments
Jul 3, 2012 7:02PM
avatar

Classic, I guess you stand against these Republicans who all supported a individual mandate before Obama passed it.

The Heritage Foundation

Mitt Romney

John McCain

Tommy Thompson

Chuck Grassley

Bob Bennet

Orrin Hatch

Jim Demint

Newt Gingrich

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!

Jul 3, 2012 5:25PM
avatar

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!

Jul 3, 2012 5:15PM
avatar
Classic, what's the Republican plan, to keep letting every good for nothing dead beat free loader access our health care system without paying any thing in. The affordable care act makes the dead beats pay up and brings down cost for the responsible citizens who pay monthly premiums and have to support the dead wood at the same time, stops over charging by requiring 80 cents of every dollar insurance companies take in has to go to benefits, not CEO multi million dollar bonuses. Millions will get rebates next year who are over paying, children can stay on their parents insurance through college, Insurance companies can no longer only give policies to the healthy and dump them as soon as they get to sick to pay up and making the tax payers pick up the Medi care bills. Every one pays in, every one benefits from lower premiums or do you prefer the Republican plan of taxation with out representation.
Jul 3, 2012 4:53PM
avatar

>>>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.

Jul 3, 2012 4:12PM
avatar

Our dollar tanked again today.

 

Thats's a fact.

Jul 3, 2012 3:50PM
avatar
Sid Shock, read the Bio on Jude Wanniski " Two Santa Clause Theory ". Very good read, if every American were to read the Bio, it might be possible to make some head way into unmasking the Republican facade. In 1976 Jude wrote how by Republicans cutting taxes and increasing spending " Playing the Good Santa " would force Democrats into raising taxes and cutting spending to bring back fiscal responsibility to the people, but that means playing the " Bad Santa " by raising taxes. So far this plan has worked perfectly, but is ruining our children's future with unfunded spending and debt. This is why Clinton gave us 4 balanced budgets and reduced spending in 9 out of the 15 largest Agencies, while Bush gave us no balanced budgets and no reductions in spending any where. It all makes perfect sense.
Jul 3, 2012 3:32PM
avatar

opps,

 

 i have lost faith in "We the People",

 

Not to worry, so has our government, whether it be democratic or republican controlled.

Jul 3, 2012 3:22PM
avatar

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.

Jul 3, 2012 2:51PM
avatar

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.

 

Jul 3, 2012 2:36PM
avatar

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.

Jul 3, 2012 2:22PM
avatar

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...

"not me"...

 

signing off, frequency change approved, over and out.  

Jul 3, 2012 2:10PM
avatar

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. 

Jul 3, 2012 2:07PM
avatar
The headlines should read, " Energy Moves Higher On Speculator BS and Greed." This is all the Wall Street Morons need to once again push the price of oil over the edge. These people are low lives who feed off the working man and poor in this country and the sad part is that our useless representatives in Congress will stand by and let them do it all over again. Great to live in America!
Jul 3, 2012 2:06PM
avatar

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.

Jul 3, 2012 2:05PM
avatar
Econ lesson for libtards - 

You cannot have growth and falling commodity prices when the Gov't has dumped trillions of dollars into the economy. When / if real job growth ever occurs, prices are going to soar as will interest rates. So, when that happens, please hold your greed and anti-business comments to yourself. 
Jul 3, 2012 1:53PM
avatar
Tensions rise in the Persian Gulf region 

Thanks for the propaganda.  I needed a nice dose of BS to remember whose side the media is on. (intense Mega sarcasm) Go BIg Oil!!!!  Go speculators!!!!  

  Play your games with oil, a game where the common man ALWAYS gets the short end of the stick.  
Jul 3, 2012 1:51PM
avatar
Hey "Someone". If you think you are old and lonely now, just wait until Obummercare kicks in. You'll be old, lonely and have some 23 year old, over educated, under worked, gov't d-bag in DC telling you when you can see a doctor. Might as well off yourself now.
Jul 3, 2012 1:50PM
avatar
JUNE AUTO SALES ARE STRONG ? OIL UP AT OVER $ 100.00 A BARREL ! Happy 4th of July from FRAUD STREET!  SCREW THE PEOPLE !  TAKE YOUR MONEY AND RUN !
Jul 3, 2012 1:38PM
avatar
"Geopolitics -- and the worry Iran might block the Strait of Hormuz -- was the story of markets today...."

Nice try, but that one's a little played out.
Jul 3, 2012 1:31PM
avatar
it,s a set up ,   Sell , Sell , Sell
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