Energy, metals push market higher

Updated: 6:25 p.m. ET

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.

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The gains had everything to do with higher 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.
Crude oil			$91.11			$89.25			-0.30%			-0.30%
(per barrel)
Heating oil			$2.6088			$2.5561			2.56%			2.56%
(per gallon)
Natural gas			$4.4810			$4.3990			1.73%			1.73%
(per mil. BTU)
Unleaded gasoline			$2.4784			$2.4543			1.03%			1.03%
(per gallon)
Retail gasoline			$3.0890			$3.0880			0.55%			0.55%
(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.

Hewlett-Packard (HPQ) was up 1.3% to $45.43. HP moved higher after an upgrade to buy by UBS.

Fifty-nine Nasdaq-100 ($NDX.X) stocks were higher, with the index up 4 points to 2,289.

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.
Treasury yields
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%
Currencies
U.S. Dollar Index			81.135			81.163			2.33%			2.33%
British pound			$1.5610			$1.5579			0.03%			0.03%
(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%
yuan
Canada dollar			$1.010			$1.007			0.69%			0.69%
(in U.S. $)
U.S. dollar			$0.991			$0.993			-0.67%			-0.67%
(in Canadian $)
Commodities
Gold			$1,384.30			$1,374.10			-2.61%			-2.61%
(per troy ounce)
Copper			$4.35			$4.26			-2.20%			-2.20%
(per pound)
Silver			$29.50			$28.86			-4.65%			-4.65%
(per troy ounce)
Wheat			$7.5950			$7.6725			-4.38%			-4.38%
(per bushel)
Corn			$6.0700			$6.0700			-2.49%			-2.49%
(per bushel)
Crude oil			$91.11			$89.25			-0.30%			-0.30%
(per barrel)