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)












32Comments
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
avatar
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
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.
Apr 5, 2011 6:07PM
avatar
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
avatar
You ain't seen nothing yet!  It is the biggest con I have ever seen, period. 
Apr 5, 2011 6:36PM
avatar
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
avatar
ANYONE who believes ONE word from either the Fed or Wall Street needs to be committed to the nearest psychiatric institution...
Apr 5, 2011 5:32PM
avatar

Red heart ok, now THIS is the part of the republican party that i love!!!  instead of f a rting around with repeals of healthcare reform boondoggles they are starting to attack the actual core issue!

 

i do not have enough info, but mr. ryan better have included cuts to military and an end to tax welfare for the wealthy.  either way, the fight can't begin until somebody rings the bell and one of the combatants throws the first hay-maker.

 

kudos to both mr. ryan and the tea party for getting this in process.

 

On a separate long-term track, Republicans controlling the House have fashioned plans to slash the budget deficit by more than $5 trillion over the upcoming decade, combining unprecedented spending cuts with a fundamental restructuring of taxpayer-financed health care for the elderly and the poor.

House Budget Committee Chairman Paul Ryan unveiled the Republican budget blueprint Tuesday morning just as Boehner headed to the White House.

Ryan's program includes a controversial proposal to convert the traditional Medicare health care program for the aged into a system by which private insurers would operate plans approved by the federal government.

Current Medicare beneficiaries or workers age 55 and older would stay in the existing system.

At the same time, Republicans propose to sharply cut projected spending on the Medicaid state-federal health program for the poor and disabled and transform it into a block grant program that gives governors far less money than under current estimates, but considerably more flexibility.

Apr 5, 2011 7:39PM
avatar

Hot  well, bull.  the presidents and senators have their money in "blind trusts" which could be invested in international bonds, bonds, gold, real estate, cash, and not US stocks.

 

that really isn't the problem: the problem is campaign finance reform. 

 

HEY REP. PAUL RYAN, after fixing the deficit could you fix campaign finance reform???

Apr 5, 2011 5:18PM
avatar
 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 5:50PM
avatar

Thumbs up lol dunn, i think this is just a case of every man for himself!  the democrats have the fear of 2012 put into them by the new wave of repubs and they are all still so shell-shocked from november 2010 that they are scrambling to drum up whatever jobs they can find even if they are burger flippers.

 

i can tell you this benefit: i grew up next to a mcdonalds and it has always been "comfort food" to me, so after a tough night with taxes i was headed home around 2 am and noticed the local mickyd's was open 24 hours!  a quick drive thru for a much needed cheeseburger and small fries at $1.95 total was a real treat!

 

p.s. for noble - you will be happy to know that i threw the $.05 change PLUS $.50 in the drop box for ronald mcdonald's house even though they may use it for obama campaign contributions.   

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
avatar

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 5, 2011 10:13PM
avatar

Surprised  well good info hava .... then mr ryan is way off track.  the bi-partisan debt reduction commission recommended

 

1.  deep, huge cuts and more revenue collection to shore up social security while cutting spending on same

 

2.  deep, huge cuts in military spending

 

3.  an end to tax welfare for the wealthy (top rates up, not down)

 

still, any proposal is a good starting point for the fight, errrrr, i mean discussion.  maybe mr ryan was having a few hookahs of that medicinal marijuana to check it out - for research purposes of course .......

Apr 6, 2011 10:30AM
avatar
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
avatar
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 5, 2011 10:06PM
avatar

Thumbs up good post popp -

 

Active, you trust those driving us?

yes, as that would be ben bernanke, who, as we all know, is a genius.

 

How deep a hole do we dig before the cave in?

really, really, really big! compared to the debt/GDP ratio of many other developed countries, such as japan, we are a "junk bond" but nevertheless an AAA rated junk bond.  we simply need to wait a little bit for recovery until we begin to exercise on the treadmill in the recovery room.  the repubs are asking the patient to hop out of the bed in intensive care, hop on the treadmill and have yet another heart attack.

 

make no mistake, the party of no wants this to happen so they all get re-elected in 2012.  i say, let the economy recover, keep the new tea party guys and throw the long-term career repub politicians out!

 

As for that final suggestion, we do not live in shangri-la.  senators and presidents become instant multi-millionaires with their power and appearance fees at speeches and for lobbying.  the trick is to require a level playing field for all candidates, even the ones who grow up in log cabins.

 

Apr 6, 2011 5:15PM
avatar

Thumbs up  ok, for the time being you have trended back to the non-troll guy so i will discuss.

 

1.  the current system is certainly unfair, insane, unwieldy, overly-complex, and in need of reform or tear-down/start-over.  for the time being dividends are a distribution of income to individuals and are thus taxed.  they are taxed thusly to avoid favoritism to those taxpayers fortunate to have money to invest in stocks, to avoid anyone from "gaming" the system and because if you don't like it, don't invest in stocks, put your money into tax-free muni bonds. now you know.

 

2.  capital gains on homes on a single principal residence are tax free precisely because they are not investments, they are just somewhere for someone to live.  one should not be taxed because he or she makes a wise decision, improves and decorates or simply gets lucky.  it is something we call capitalism instead of the socialist taxation of personal property you suggest.  are you sure you are not from france?

 

3.  we already discussed this.  just because you think something does not make it rational tax policy.

 

4.  capital gains are given a tax break to encourage capital formation and small business who generate the vast majority of new jobs.  again, your anti-capitalism surprises me.  out of the closet now are we?

 

5.  your suggestion of a flat tax is nonsensical and already tanked steve forbes who had the lack of common sense to suggest it.  it is not progressive and cannot generate sufficient revenue to keep any size government running nor would it leave any disposable income in the pockets of laborers and the lower middle class.  again, not giving laborers any incentive to work and shutting down all possible consumption of consumer goods for millions is very extreme and anti-capitalistic. 

 

have a good one you sly comrade-in-hiding. 

Apr 6, 2011 11:17AM
avatar

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...

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