Dow up 85 as Cisco, housing give stocks a boost

Updated: 6:20 p.m. ET

Stocks moved solidly higher today, and the major averages flirted with hitting new highs for the year as decent earnings from Cisco Systems (CSCO) boosted technology stocks and building permits hit a four-year high.

Cisco reported better-than-expected​ earnings late Wednesday and boosted its dividend. While business conditions in Europe overall are a mess, CEO John Chambers said, business in Asia and North America is reasonably strong. The report pushed shares up $1.67 to $19.02. Its percentage gain was the largest since Aug. 11, 2011.

Building permits hit a seasonally adjusted annual rate of 812,000 in July, the best level since August 2008. Permits were up 6.8% from June and 29.5% from July 2011. Housing starts were off slightly. Homebuilding shares were higher. So were shares of housing-related stocks, including Whirlpool (WHR), La-Z-Boy (LZB), Bed Bath & Beyond (BBBY) and Masco (MAS). Jobless claims of 366,000 this week were up slightly from a  week ago.

Facebook (FB) shares did not participate in the rally. Instead, they briefly hit a new low of $19.69 before finishing at $19.87, down $1.33 on the day. Lock-up rules expired today, and some 271 million shares were eligible to be traded. Lock-up rules are put in place to prevent early investors from selling their positions as soon as a company goes public. Another 1.2 billion shares will get unlocked by next spring.

Profit-taking trimmed some of the rally's froth. The Dow Jones industrials ($INDU) closed up 85 points to 13,250, its best gain since jumping 217 points on Aug. 3. The blue chips had been up as many as 105 points. The Standard & Poor's 500 Index ($INX) gained 10 points to 1,416, and the Nasdaq Composite Index ($COMPX) rose 31 points to 3,062.

Article continues below. The Nasdaq-100 Index ($NDX) gained 33 points to 2,768.

Volume, however, was light. New York Stock Exchange volume is just 322 million shares. Average daily trading volume so far in August is the lowest since December 2007.

You can see the the volume decline in Apple (AAPL). Its five-day average volume as of Wednesday was 9.2 million shares, compared with nearly 35 million shares in late April and 26 million shares over the five trading days ended Aug. 15, 2011.

After the close, shares of Gap (GPS) were up 66 cents, or 1.9%, after the company reported a better-than-expected​ 29% gain in earnings. The company again raised its full-year earnings view to $1.95 to $2 a share from its May view of $1.78 to $1.83 a share.

Market could be up again for the week
With today's gains, the Dow is up 0.3% for the week, with the S&P 500 up 0.7% and the Nasdaq up 1.4%. If the gains hold, they would be the sixth straight for the Dow and S&P 500 and fifth straight for the Nasdaq.

Since the market bottom on June 4, the Dow is up 9.5% with the S&P 500 up 10.8% and the Nasdaq 11.5%.

The Dow is up 8.5% for the year, with the S&P 500 up 12.6% and the Nasdaq up 17.6%.

Foot Locker (FL) and J.M. Smucker (SJM) are the key earnings reports on Friday. The Conference Board releases its July report on leading economic indicators. The University of Michigan reports on consumer confidence.

Futures tradings suggests stocks will open modestly higher.

Apple signals interest in cable
Apple, the biggest influence on the Nasdaq-100, closed up $5.51 to $636.34 today, within $8 of its all-time intraday high of $644, set on April 10.

One reason for Apple's gain: The company is in talks with some of the biggest U.S. cable operators about letting consumers use an Apple device as a set-top box for live television and other content.

The talks represent Apple's most ambitious crack at infiltrating the living room after years of trying, The Wall Street Journal said.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil (-CL)			$95.60			$94.33			8.56%			-3.27%
(per barrel)
Heating oil (-HO)			$3.1229			$3.0852			9.65%			7.16%
(per gallon)
Natural gas (-NG)			$2.7240			$2.7480			-15.11%			-8.87%
(per mil. BTU)
Unleaded gasoline (-RB)			$3.0832			$3.0840			11.13%			16.02%
(per gallon)
Brent crude			$116.90			$116.25			11.42%			8.87%
(per barrel)
Retail gasoline			$3.7100			$3.7090			6.00%			13.25%
(per gallon; AAA)

Cisco and IBM gains are 36% of Dow's total
Cisco's gain added nearly 13 points to the Dow. As it reported fiscal-fourth-quarte​r earnings late Wednesday, the network-equipment maker also unveiled a plan to raise its quarterly dividend by 75% to 14 cents a share.

And it vowed to use 50% of its free cash flow for dividends and to buy back shares. Cisco was the top percentage gainer among stocks in the Dow, the S&P 500 and the Nasdaq-100 indexes.

IBM (IBM) was up $2.44 to $200.84, its first close above $200 since May 11. The gain added roughly 18 points to the Dow.

IBM was up after announcing it was buying flash-memory provider Texas Memory Systems for an undisclosed sum, as the technology heavyweight looks to boost its storage offerings. Texas Memory, founded in 1978, makes what are called solid-state storage drives.

Unlike hard-disk drives that rely on spinning disks and robotic arms, solid-state systems are based on flash or random-access memory that can provide significantly faster access to data while consuming less power.

Sterne Agee said the deal is important for a number of reasons, including:

• The market for flash has become important enough that IBM wants its own intellectual property in the space.
• It may force a storage provider line EMC (EMC) to consider an acquisition of a player in flash memory such as Fusion-io (FIO). Fusion-io shares were up $2.15 to $28.41.

Wal-Mart holds the Dow back
Wal-Mart Stores (WMT) was the big weight on the Dow, falling $2.30 to $72.15 as fiscal-second-quarte​r revenue of $113.5 billion was less than expected. Earnings of $1.19 were a penny better than estimates. The stock-price decline subtracted nearly 19 points from the Dow.

Earnings that also disappointed investors came from Ross Stores (ROST) and Dollar Tree (DLTR).

Ross said profits were up 23% from a year ago, and revenue was up 12% to $2.34 billion, but its guidance for the fiscal third quarter and the full years were lower than expected.

Dollar Tree reported 51 cents a share in earnings, a penny less than expected. Revenue was up 10.5% to $1.7 billion, but analysts had expected $1.77 billion. Shares fell 89 cents to $49.11 and were falling further after hours.

Game-maker Electronic Arts (EA) rose 72 cents to $13.81 on a New York Post report that the company's management was exploring selling the company. The Post said the company had been approached by private-equity giants KKR and Providence Equity Partners about a potential deal.

Twenty-three Dow stocks were higher, with Home Depot (HD) and Microsoft (MSFT) trailing Cisco. The laggards were Wal-Mart, McDonald's (MCD) and Merck (MRK).

After Cisco, Sears Holdings (SHLD) and PulteGroup (PHM) were the top S&P 500 performers. Agilent Technologies (A), drug-maker Perrigo (PRGO) and Sprint Nextel (S) were the laggards.

Agilent, which supplies bio-analytical and electronic measurement tools to the communications, electronics, life sciences and chemical analysis industries, reported disappointing fiscal-third quarter results, and cut estimates for the year.

Sears Holdings and Electronic Arts were the top Nasdaq-100 stocks after Cisco. Perrigo and and Gilead Sciences (GILD) were the laggards.

Crude oil tops $95 a barrel; gold moves higher
Light sweet crude oil (-CL) was in New York was up 97 cents to $95.30 a barrel. Brent crude, the benchmark North Sea oil, gained a penny to $116.24 a barrel.

Gold (-GC) settled up $12.60 to $1,619.20 an ounce. Silver (-SI) was up 40 cents to $28.212 an ounce. Copper (-HG) added 3.3 cents to $3.3825 a pound.

Interest rates were higher, with the 10-year Treasury yield reaching 1.836% from 1.805% on Wednesday. The dollar was lower against major currencies.

The 10-year yield is at its highest level since May 11 and is up nearly a quarter this month alone. One possible catalyst for the gain, at least according to CNBC's Rick Santell, is the vow of Mario Draghi, president of the European Central Bank, to do whatever it takes to save the euro. German Chancellor Angela Merkel, visiting Canada today, made a similar vow.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0800%			0.090%			-20.00%			700.00%
5-year Treasury note			0.816%			0.795%			36.23%			-1.69%
10-year Treasury note			1.836%			1.805%			23.06%			-1.87%
30-year Treasury bond			2.956%			2.914%			14.71%			2.32%
Currencies
U.S. Dollar Index			82.417			82.711			-0.35%			2.35%
British pound			1.5746			1.5686			0.41%			1.34%
(in U.S. $)
U.S. $ in pounds			£0.635			£0.637			-0.41%			-1.32%
Euro in dollars			$1.24			$1.23			0.53%			-4.56%
(in U.S. $)
U.S. $ in euros			€ 0.809			€ 0.814			-0.53%			4.78%
U.S. $ in yen			79.43			78.98			1.67%			3.02%
U.S. $ in Chinese			6.39			6.36			0.47%			0.98%
yuan
Canada dollar			$1.014			$1.011			1.74%			3.40%
(in U.S. $)
U.S. dollar			$0.986			$0.989			-1.64%			-3.29%
(in Canadian $)
Commodities
Gold (-GC)			$1,619.20			$1,606.60			0.54%			3.34%
(per troy ounce)
Copper (-HG)			$3.383			$3.350			-1.02%			-1.56%
(per pound)
Silver (-SI)			$28.2120			$27.8120			1.07%			1.06%
(per troy ounce)
Wheat (-ZW)			$8.8175			$8.6625			-0.73%			35.08%
(per bushel)
Corn (-ZC)			$8.0750			$8.040			0.28%			24.90%
(per bushel)
Cotton			$0.7259			0.7311			1.75%			-20.82%
(per pound)
Coffee			$1.6180			1.6495			-7.22%			-29.54%
(per pound)
Crude oil (-CL)			$95.60			$94.33			8.56%			-3.27%
(per barrel)