Gold tops $1,450; stocks end flat

Fear of Mideast turmoil and government debt worries push precious metals higher. Interest rates rise on worries the Fed may raise rates before 2011 ends. Chip stocks jump on Texas Instruments' deal to buy National Semiconductor.

By Charley Blaine Apr 5, 2011 12:58PM
Charley BlaineUpdated: 9:57 p.m. ET

Today made investors in semiconductor stocks and Abercrombie & Fitch (ANF) happy.

Not to mention speculators in gold and silver, which jumped above $1,450 and $39 an ounce, respectively.

But for the rest of the market, it was basically a flat day as worries about inflation and the potential of higher interest rates trumped gains in technology stocks.
Techs surged after Texas Instruments (TXN) said it would buy National Semiconductor (NSM) for $6.5 billion.  And there were gains for stocks that stand to get higher weights in a rebalancing of the Nasdaq-100 Index ($NDX.X). These included Microsoft (MSFT), Dell (DELL), Cisco Systems (CSCO) and Amazon.com (AMZN)Apple (AAPL), whose weighting in the index will drop from 20.5% to 12.3%, was off 0.7% to $338.89. The index was off 6 points to 2,328. (Microsoft publishes MSN Money.)

The Dow Jones industrials ($INDU) ended the day down 6 points to 12,394. The Standard & Poor's 500 Index ($INX) was flat at 1,333. The Nasdaq Composite Index ($COMPX) was up 2 points to 2,791.

The inflation worries came from the minutes of the March 15 meeting of the Federal Reserve's rate-making body, the Federal Open Market Committee. In the formal prose of the document, one could see several committee members arguing that inflation pressures were growing and should be dealt with sooner, perhaps before the end of 2011.

There were others more concerned about weak labor markets who were reluctant to boost interest rates before next year.

Wednesday, earnings are due from Bed Bath & Beyond (BBBY) and Monsanto (MON). Futures trading suggests U.S. stocks will open higher. In Japan, the Nikkei 225 Index ($JP:N225) was lower in mid-morning trading, although off its lows.

Energy prices -- New York close
 
  Tues.     Mon.     Month chg.     YTD chg.
Crude oil 

$108.34     $108.47     1.52%     18.56%
(per barrel)

 

 

 

 
Heating oil

$3.1850     $3.1714     3.08%     25.21%
(per gallon)

 

 

 

 
Natural gas 

$4.2310     $4.2890     -3.60%     -3.95%
(per mil. BTU)

 

 

 

 
Unleaded gasoline

$3.2013

$3.1688

-3.60%

-3.95%
(per gallon)

 

 

 

 
Brent crude

$122.22     $121.06     4.31%     28.99%
(per barrel)











Retail gasoline

$3.6850

$3.6620

2.19%

19.95%
(per gallon; AAA)












Fears drive gold higher

Gold hit a new high of $1,455.50 an ounce before dropping back to $1,452.60 near the close. Silver topped $39 an ounce for the first time since 1980, peaking at $39.245 before dropping back to $39.15. Copper was at $4.2615 a pound, up slightly on the day.

"There’s still turmoil in the Middle East, uncertainty in Japan and possible sovereign-debt defaults," Adam Klopfenstein, a senior strategist at Chicago firm Lind-Waldock, told Bloomberg News. "There’s still demand for gold and silver as a hedge against chaos."

Portugal's debt was downgraded by Moody's today. In addition, China raised interest rates to quell inflation pressures.

Crude oil in New York was off 13 cents to $108.34 a barrel, ostensibly because of the Chinese rate increase. Brent crude, however, settled up $1.16 to $122.22 a barrel in London.

Interest rates were higher, with the 10-year Treasury yield hitting 3.483%, up from Monday's 3.425%.

Abercrombie & Fitch offers a cheery view
While National Semiconductors' 71% gain to $24.06 was a huge home run for many investors, many also cheered Abercrombie & Fitch, which projected it would earn $4.75 a share in fiscal 2013 (which starts in early 2012) when most analysts had been projecting $3.97 a share.

Shares were up 10.8% to $65.57.

Abercrombie made its bullish forecast at an analyst meeting today. In addition to its strong forcast for fiscal 2013, the company set an ambitious long-term sales goal in anticipation of successful overseas growth.

Gold and silver push metals shares higher
Metals stocks were higher, with Freeport-McMoRan Copper & Gold (FCX) up 1.5% to $56.61 and U.S. Steel (X) up 1.2% to $54.64. Alcoa (AA), which reports first-quarter earnings on Monday, was up 2.8% to $18.05, a 52-week high. The shares are up 17.3% this year.

Energy stocks were generally higher. Exxon Mobil (XOM) was up 0.7% to $85.42.

Airlines were lower because higher fuel prices cut into profits. Delta Air Lines (DAL) dropped 1.3% to $9.70. United Continental Holdings (UAL), the parent of United Airlines and Continential Airlines, was off 4.4% to $21.75. Southwest Airlines (LUV), struggling with jets showing metal fatigue, was down 2.1% to $12.20.

Chips jump on TI's deal for National Semi
Semiconductors were the market's strongest sectors after the TI-National Semiconductor deal.

TI's chips are widely used in mobile phones and in a variety of system monitoring applications. National Semiconductor is in similar businesses. So, TI thinks combining the two make sense.

Wall Street agrees. Not only was National Semi up, but TI gained 1.7% to $34.69. TI shares are up 7.2% this year.

One collateral effect of the deal is that investors are looking for the next chip company ripe for merger. Twenty-seven of 30 stocks in the Philadelphia Semiconductor Index ($SOX) are higher. The index was up 2.3% to 439.

After National Semiconductor comes Avago Technologies (AVGO), up 3.5% to $31.67, Teradyne (TER), up 3.4% to $18.40, and STMicroelectronics (STM), up 2.7% to $12.75.

Leaders and laggards
Inspire Pharmaceuticals (ISPH), up 24.9% to $4.97, tops among stocks in the Russell 2000 Index ($RUT.X). The specialty drugmaker agreed to be bought by Merck (MRK) for about $430 million, or $5 a share.

Questcor Pharmaceuticals (QCOR), up 20.6% to $18. The developer of a treatment for seizures in infants said preliminary first-quarter gross sales were $48.6 million and the company saw a 115% increase over a year ago in paid prescriptions for its H.P. Acthar Gel for multiple sclerosis treatment.

Diamond Foods (DMND), up 6.7% to $61.06. The snack maker will buy the Pringles chip business from Procter & Gamble (PG) for $1.5 billion in stock and assumption of $850 million in debt.

Expedia (EXPE), up 1.3% to $22.72. American Airlines ticket sales will resume through the online travel agency and its Hotwire unit under a tentative agreement to resolve a dispute that began in December.

Meru Networks (MERU), down 14.9% to $16.05. The maker of Wi-Fi networking equipment said first-quarter revenue was $20.5 million at most, missing its forecast of $21.5 million to $22.5 million.

KB Home (KBH), down 4.2% to $11.69. The homebuilder that targets first-time buyers reported a wider first-quarter loss than expected and a 32% decline in net orders, a clear signal the housing crash is not over yet. KB Home lost $114.5 million, or $1.49 a share. The consensus estimate had been for a loss of 27 cents a share. Revenue and new orders plunged amid slumping demand for new houses. Other builders also declined.

Short hits from the markets -- New York close
 
  Tues.     Mon.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.070%

0.040%

-22.22%

-41.67%
5-year Treasury note 

2.272%

2.197%

2.11%

12.70%
10-year Treasury note

3.483%

3.425%

0.84%

5.39%
30-year Treasury bond

4.511%

4.490%

0.07%

3.42%
Currencies











U.S. Dollar Index

76.111

76.159

0.05%

-4.01%
British pound

$1.6239

$1.6137

1.27%

4.06%
(in U.S. $)











U.S. $ in pounds

£0.616

£0.620

-1.25%

-3.90%
Euro in dollars

$1.417

$1.422

0.00%

5.91%
(in U.S. $)











U.S. $ in euros

€ 0.706

€ 0.703

0.00%

-5.58%
U.S. $ in yen 

84.600

84.130

1.52%

3.97%
U.S. $ in Chinese

6.538

6.536

-0.51%

-1.17%
yuan











Canada dollar

$1.037

$1.035

0.53%

3.31%
(in U.S. $)











U.S. dollar 

$0.965

$0.966

-0.52%

-3.20%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,452.50

$1,433.00

0.88%

2.19%
(per troy ounce)

 

 





Copper

$4.265

$4.255

-1.00%

-4.10%
(per pound)











Silver

$39.183

$38.494

3.42%

26.65%
(per troy ounce)











Wheat 

$7.8625

$7.9000

3.01%

-1.01%
(per bushel)











Corn

$7.6675

$7.6025

10.60%

23.17%
(per bushel)











Cotton 

$2.0106     $1.9555     0.41%     38.84%
(per pound)











Crude oil 

$108.34

$108.47

1.52%

18.56%
(per barrel)












22Comments
Apr 5, 2011 4:06PM
avatar
The Wall Street dream continues, problem is there are only a few who are benefiting from it while the rest of the country goes down the toilet. The average worker in this country continues to get screwed more everyday, but thats OK as the," Market is UP!!" I cannot wait for the day when once again, the big Wall Street Walls will come crashin down and then they will be crying foul once again. What a bunch of Morons. I do not know who is more useless, they or our government. - brent011

              

    Wallstreet and our government are one of the same so both are equally useless.

Apr 5, 2011 2:21PM
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A record bull market run !!!! too bad it has no fundamentals at all....the world where everything is good news now matter what...........
Apr 5, 2011 2:51PM
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The Wall Street dream continues, problem is there are only a few who are benefiting from it while the rest of the country goes down the toilet. The average worker in this country continues to get screwed more everyday, but thats OK as the," Market is UP!!" I cannot wait for the day when once again, the big Wall Street Walls will come crashin down and then they will be crying foul once again. What a bunch of Morons. I do not know who is more useless, they or our government.
Apr 5, 2011 6:07PM
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The repubs have proposed a $40 billion budget cut. That is like 1.05 percent of this years budget.

That is like having a diet soda with your up sized triple burger with cheese and saying you are watching your health. Dang, this spam blocker is tough today. 

Watch my right hand, not my left.

Why can't the federal government take a ten percent across the board cut. That would still be more than it needed 10 years ago.

Watch my right hand.


Apr 5, 2011 4:06PM
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You ain't seen nothing yet!  It is the biggest con I have ever seen, period. 
Apr 5, 2011 6:36PM
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Gold $1450.00 next week $1525.00 ! Will it reach $ 2000.00 ?  When Helicopter Ben stops the printing press where goes the market?   Gasoline at$4.25 a gallon  Oil at $107.00 a barrel?  God Bless America LAND OF THE RICH HOME OF THE POOR !!
Apr 5, 2011 5:29PM
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ANYONE who believes ONE word from either the Fed or Wall Street needs to be committed to the nearest psychiatric institution...
Apr 5, 2011 5:18PM
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 McDonald's Corporation reports Health Care exemption worked out with Obamacare spurs 50,000 jobs

just to make this clear.................is this capitalist thingy or a socialist thingy????

 

i'll bet my self taught economics 101 that it's a capitalist idea!Nerd

Apr 5, 2011 8:17PM
avatar
Active, you trust those driving us? How deep a hole do we dig before the cave in? Maybe campaigns should be run where the challenger is limited in spending and the incumbent spends nothing, After all, if your worth your salt, you do not need to toot your own horn. 
Apr 5, 2011 10:18PM
avatar

Active- Read your post last night.  I've be a bit unhappy about the "GS Connection" over the last 4, 5 Administrations.  They appear to wield too much influence, too much power, too much clout in the process. IMO there has historically been / continues to be a disproportionate % of GS alums in not just the Obama, but also at least in the Bush 41 / 43 and Clinton Administrations.

 

It wouldn't surprise me if it went back further than that.  In my prior experience, when one player had excess influence, at the very least, there's a tendency to help create results / game the system to cause an outcome that's at least skewed in their favor.  That uneven playing field very well could have previously / could now lead to some less-than well-thought-out decisions.  You take care. 

Apr 5, 2011 9:47PM
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I said it before, and I will say it again..... Everything doesn't matter... We are going higher!

 

Oil up...................Good for energy stocks......... market up

Oil down............. Good for consumer... .............market up
Dollar down....... World buys U.S. products..... market up
Dollar up............ U.S. buys world...................... ..market up

Retail investor feels safe to enter the market......... Crash
Apr 6, 2011 10:30AM
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MirageGuy

hmmmm....   I dunno.... A month at the Mirage?   I usually only stay 5-6 days at a time, and being I gamble its always completely comp'ed...  But entertainment expense can get out of hand...

Translation: Vegas doesn't accept welchers.... But Visa/Mastercard does...
Apr 5, 2011 4:17PM
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News headline. Gold's Worth- Inflation adjusted. Market trends upward in response to Dollars decline. The Fed promises relief in sight. McDonald's Corporation reports Health Care exemption worked out with Obamacare spurs 50,000 jobs. 
Apr 6, 2011 11:17AM
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Stric_9...  you are right about that.  Back in the day, if you had markers outstanding and didn't settle up quickly you would find yourself in a hole in the desert.  Today it is all corporate, and I am sure the Casinos have an army to chase down deadbeats...

 

Not to worry, I have no outstanding markers...    Vegas was better in the old days...  now it is trying to be politically correct...  Hell some Casinos even ban cigar smoking...  But at least they have gone back to being an adult playground...

Apr 5, 2011 9:19PM
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The big numbers from Paul Ryan's Budget.  It will reduce spending by $6.2 trillion over the next decade and reduce the deficit by $4.4 trillion.  It also cuts the top income tax rate by nearly a third, from 35 percent to 25 percent. A big part of the House Budget Chairman's plan rests on the assumption that President Barack Obama’s health care law will be repealed. Over the next decade, that would cut $1.4 trillion in spending alone, according to Ryan's budget. Those savings, however, wouldn't go directly to deficit reduction, because Ryan would also repeal the elements of health care reform that are aimed at raising revenue or reducing costs.
The Wisconsin Republican's budget spends less on nearly every major category of the budget. Over the next decade, Ryan (R-Wis.) wants to cut $389 billion from Medicare, the public health insurance program for seniors. Over the same period, Ryan's budget puts $735 billion less toward Medicaid, which benefits Americans too poor to afford private insurance. Discretionary spending on domestic programs is also reduced by $923 billion.
Two exceptions are security and defense spending and spending on Social Security, the public pension program for the elderly. Both are kept steady and relatively unchanged from Obama’s proposed budget.

 PFM - For all you computer nerds. All you do is cut the spending numbers, lower taxes and shove Medicaid unto the states.  Do nothing to defense AND restructure Medicare for all those under 55 so that they get partial payment (50/50. 60/40, ?)  from gov and pay the rest.  Wow what took so long. Now lets see the detail LOL Smile

Ryan said a computer simulation program of what would happen in the future “crashes in 2037, because it can’t conceive of any way in which the U.S. economy can continue because of this massive burden of debt.”

TGIT - I'll be 91 in 2037 Beer mug

 

Apr 5, 2011 4:32PM
avatar
Stocks close below post Deepression high reported yesterday.    What do you say now?
Apr 6, 2011 11:24AM
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Active, why do dividends need to be taxed a second time at all? 

 

And as to capital gains, yes, STARTING with Real Estate.  Why should the first 500K be tax free?  Oh, thats right government interference in the Real Estate market to encourage gambling.

 

Sorry, but I think dividends should be tax free, UNLESS you get rid of the corporate tax, then they should be taxed at the normal income rates.

 

As to capital gains, tax all capital gains as normal income or index the capital gains to an inflation rate pegged to the annual increase in the money supply. 

 

Then set the RATE equal for all people, so we don't have some more equal than others.  Since you feel 35% is too low, lets set the rate at 35% for EVERYONE.  Fair is fair, oh, thats right you are a Democrat...  you don't believe in equality....

Apr 6, 2011 1:07AM
avatar

no Comrade ActiveRIA...  I have not had a drink yet... :)

 

But as to your comment on 'Rich Welfare'  and 35%+ being fair (in your eyes, LOL)....

 

Let me explain something too you...  I OWN the business.  Here is how it works...

 

Lets say I want any extra 1M.  That means I have to take an 1.35M to pay the taxes.  Now say you up that to 1.7M...   fair enough, but what that REALLY means is I have 350K less in the pool for salary raises for the rest. 

 

I will just have to send the government the employee raises...So they will have to make do with 0-2%...   Here endeth the real world lesson for today.   As owner I get mine first.   All taxes paid come at the espense of raises for the rest...  I guess I am OK with that...  And you sound like the employees are OK with that too...

 

Socialists and Donkeys...maybe if they ever ran a real business they would understand that...  but most are rich Wall Street types...  Well that is how Main Street works...

Apr 5, 2011 3:11PM
avatar
Just as I had predicted early this morning, gold reaches a new high. No crystal ball or time machine for me, just plain old logic and common sense. Thanks for reporting this obvious news Charley! Wink 
Apr 5, 2011 1:32PM
avatar

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                  "DOH"

                                                                    Open-mouthed

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