Energy, metals push market higher
The Dow ends with a 34-point gain. Crude oil tops $91. Gold and silver rise. Verizon will sell iPhones in February. Supervalu profit slumps on pressure from Wal-Mart and Target.
What started as a solid stock rally today, potentially the best since Jan. 3, ended with an OK finish -- good but not impressive.
The gains had nothing to do with Verizon Communications' (VZ) announcement that it will make Apple's (AAPL) iPhone available next month. In fact, both Verizon and Apple shares were lower today.
commodity prices, and energy and metals stocks. The sectors were the day's strongest.
Crude oil finished above $91 on the day. Gold, silver and copper were all higher.
The Dow Jones industrials ($INDU) closed up 34 points to 11,672. The Standard & Poor's 500 Index ($INX) was up 5 points to 1,274. Gains for the indexes were their first after three straight days of losses. The Nasdaq Composite Index ($COMPX) was up 9 points to 2,717.
The Dow had been up as many as 67 points at 11 a.m. ET. It was not clear why the market fell back.
Among stocks making big moves, Supervalu (SVU) was the big loser among S&P 500 stocks. The supermarket chain (Albertson's, Lucky and others) tumbled 11.6% to $7.59.
The company expects to earn $1.25 to $1.35 a share in 2011. It had previously forecast $1.40 to $1.60. The consensus estimate was for $1.45 a share.
In sympathy with Supervalu, Kroger (KR) was down 0.4% to $21.45. Winn-Dixie (WINN) was off 1.4% to $6.32, and Safeway (SWY) dropped 1.3% to $20.89.
All are feeling the impact of heavy competition from Wal-Mart Stores (WMT), Target (TGT) and others. Wal-Mart added 1% to $54.29. Target was off slightly to $55.19.
After the close, Cliffs Natural Resources (CLF) said it will acquire Consolidated Thompson Iron Mines for $4.9 billion Canadian (or $4.95 billion U.S.) in cash. That's about $17.25 (Canadian) a share, a premium of about 30.5% to Consolidated Thompson's Monday close in Toronto. Based in Montreal, Consolidated operates mines in Quebec, Newfoundland and Labrador. Cliffs was off 1.1% after hours to $84.10 after rising 3% to $84.96 in regular trading.
Wednesday's market will be driven by results of bond sales in Portugal, Spain and Italy as well as an auction of $21 billion in 10-year U.S. Treasury notes.
Also scheduled: the Federal Reserve's Beige Book report, a narrative look at the economy prepared by the 12 Federal Reserve Banks. The report is due at 2 p.m. ET.
Futures trading suggests a flat open.
Verizon will sell the iPhone 4 only
Verizon did announce that it will sell the iPhone 4 starting Feb. 10, with pre-orders starting Feb. 3. It will be the second U.S. mobile company to offer the device. AT&T (T) has been the exclusive carrier so far.
Verizon won't sell the iPhone 4G, as it would require major redesigns of the chip set.
Despite the news, Verizon was down 1.6% to $35.36. AT&T was off 1.5% to $27.91. Rival Sprint (S), which doesn't have the device, was off 3.9% to $4.40.
It may be that the market is simply selling the news -- and has been since Wednesday, when Verizon closed at at $37.67.
BusinessWeek also said analysts are concerned about the high costs Verizon faces to promote the device, some $3 billion to $5 billion.
That's because Verizon will subsidize consumer purchases by $350 to $400 a device.
Wireless operators pay companies such as Apple one price for a phone and then sell them to consumers for less to encourage people to sign up for two-year service contracts.
The iPhone subsidy, at $400, is higher than the $200 to $300 that carriers pay for most smart phones, Tina Teng, a wireless communications analyst at researcher iSuppli Corp., told BusinessWeek.
Apple, meanwhile, was off 0.2% to $341.64, after hitting a new intraday high of $344.96.
|Energy prices -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|(per mil. BTU)|
|(per gallon; AAA)|
Commodities move higher
Crude oil settled up $1.86, or 2.1%, to $91.11 a barrel, in part because it does not appear that the Trans-Alaska oil pipeline will be running again for at least a few days.
Gold settled up $10.20 to $1,384.30 an ounce. Silver was up 63.8 cents, or 2.2%, to $29.499 an ounce. Copper added 8.45 cents to $4.349 a pound.
Interest rates were higher, with the 10-year Treasury yield at 3.355%, up from 3.304% on Monday. The dollar was mixed against major currencies.
The commodity moves meant that energy and materials stocks were the market leaders.
Exxon Mobil (XOM) was up 0.8% to $75.69. Chevron (CVX) added 1.6% to $91.83. Anadarko Petroleum (APC), which has been the subject of takeover speculation, added 3.5% to $77.52.
BP (BP), which owns 47% of pipeline operator Alyeska, was up 1.7% to $46.83.
There was one group for whom higher oil prices were doing no good: airlines. American Airlines parent AMR (AMR) was off 5.9% to $8.27. JetBlue (JBLU) was down 1.9% to $6.85. United Cotinental Holdings (UAL) was off 2% to $25.69. The NYSE Arca Airline Index ($XAL.X) was down 1.3% to $48.42. The index was up 39% in 2010 and 5% higher just last week.
Meanwhile, because of rising metals prices, Freeport-McMoRan Copper & Gold (FCX) was up 2.4% to $121.80. U.S. Steel (X) added 3% to $57.08.
Alcoa (AA) was off 1% to $16.33. That may be a function of investors selling after the company reported strong fourth-quarter results. The stock had risen 66% between its 2010 low of $10 on July 2 and Jan. 5, when it peaked at $16.56.
Late Monday, the aluminum giant beat estimates on earnings per share, although revenue was less than expected.
And it believes aluminum prices will strengthen substantially in 2011, thanks to recoveries in the aerospace and automotive industries. In addition, an aluminum-based exchange-traded fund just started trading.
Other movers today
Eighteen of the 30 Dow stocks were higher, led by Bank of America (BAC), up 2% to $14.69, and Intel (INTC), up 1.7% to $21.05.
Apollo Group (APOL), up 13.4% to $40.74, was the top performer in the S&P 500 and the Nasdaq-100 Index. The for-profit education company reported better-than-expected fiscal-first-quarter earnings.
Sears Holdings (SHLD) closed up 6.3% to $75.03 after jumping as much as 11%. The department-store chain said it will earn $3.39 to $4.12 a share before any items for the fourth quarter. Analysts had been looking for $3.05.
Lennar (LEN) jumped 7.1% to $20.24, second-best among S&P 500 companies. The homebuilder reported fourth-quarter earnings that beat analyst estimates after cutting costs. Net income in the three months ended Nov. 30 was 17 cents a share, excluding one-time charges. Analysts had projected earnings of about 1 cent a share.
St. Joe (JOE) was up 1% to $23.29 after initially falling more than 5%. The largest private landholder in northern Florida said it faces an informal inquiry by the U.S. Securities and Exchange Commission over how its policies are impairing investment in real-estate assets.
WD-40 (WDFC) fell 6.8% to $37.22. The maker of lubricants and hand soap reported first-quarter earnings of 53 cents a share, missing the average analyst estimate of 60 cents.
Talbots (TLB) tumbled 17.4% to $6.25. The women's clothing retailer forecast a fourth-quarter loss of between 15 cents and 19 cents a share. Analysts had expected a loss of 2 cents.
|Short hits from the markets -- New York close|
|Tues.||Mon.||Month chg.||YTD chg.|
|13-week Treasury bill||0.140%||0.140%||16.67%||16.67%|
|5-year Treasury note||1.962%||1.928%||-2.68%||-2.68%|
|10-year Treasury note||3.341%||3.304%||1.09%||1.09%|
|30-year Treasury bond||4.483%||4.488%||2.77%||2.77%|
|U.S. Dollar Index||81.135||81.163||2.33%||2.33%|
|(in U.S. $)|
|U.S. $ in pounds||£0.641||£0.642||-0.03%||-0.03%|
|Euro in dollars||$1.297||$1.295||-3.04%||-3.04%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.771||€ 0.772||3.13%||3.13%|
|U.S. $ in yen||83.403||82.670||2.50%||2.50%|
|U.S. $ in Chinese||6.642||6.633||0.41%||0.41%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
The way I see it, they are going to make the world spend all they make on gas, people will be starving due to cost of food and other needed expensesthe weather situations on every continent is going to drive the cost of food(lack of) up on it's own plus the added expense of fuel charges
Market movers this week; initial jobless claims Thur, Intel earnings Thur after markets close and JP Morgan profit on Friday. Good time to sell a stock into earnings buying long/short calls just in case. Intel broke thru 20.77 support today 'cause the licensed Nvidia IP and AMD fired their CEO. TSM continues up and up due to huge revenue upswing. Apple and Verizon are NO shows for iPhone announcements. Correction due at end of earnings or if they disappoint.
Active RIA .....will this be the little train that couldn't?
If I buy some stocks today it WILL be the train that couldn't but if I don't buy some stocks today it will be the train that turned into a rocket
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The NAHB Housing Market Index for September rose to 59 from 55, while the Briefing.com consensus expected the reading to climb to 56. Nasdaq +9.02 at 4561.77... NYSE Adv/Dec 1994/775... Nasdaq Adv/Dec 1545/784.
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