Stocks enjoy holiday rally as jobless claims fall

The Dow rises 62 points; the S&P 500 nears break-even for 2011. The market is poised for a third weekly gain in the last four as new reports suggest the economy is firming. Wall Street loves an Akamai deal. Oil flirts with $100.

By Charley Blaine Dec 22, 2011 2:03PM
Charley BlaineUpdated: 8:02 p.m. ET

The stock market is offering a little holiday cheer this week. Shares rallied today and, absent a sell-off Friday, look to finish higher for the third week in the last four.

Moreover, the Standard & Poor's 500 Index ($INX) is up 2.8% this week and nearly at break-even again for the year. That's actually worth noting. On Oct. 3, the index was down nearly 21% for the year.

The rally came on fairly good news. Jobless claims in the latest week fell to their lowest level since April 2008. The Conference Board's Index of Leading Economic Indicators rose more than forecast and was higher for the seventh straight month. The University of Michigan's measure of consumer confidence was up for the fourth month in a row and reached its highest level since June.

In the United States, financial stocks were the market's leader, followed by energy stocks as crude oil (-CL) briefly topped $100 a barrel. Big technology stocks were mostly higher, led by Amazon.com (AMZN), Apple (AAPL), Intel (INTC) and Akamai Technologies (AKAM). An exception: Oracle (ORCL), down 8 cents to $25.69 after Tuesday's weak earnings report.

The Dow Jones industrials ($INDU) closed up 62 points to 12,170. The S&P 500 rose 10 points to 1,254, and the Nasdaq Composite Index ($COMPX) was up 21 points to 2,599, recovering much of its 26-point loss on Wednesday, when Oracle's weak report pushed tech shares lower.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, gained 18 points to 2,267.

Volume was light as investors have started to take time off for the holidays. Final volume on the New York Stock Exchange was a touch less than 775 million shares.

There was little bad news from Europe. Stocks on the continent were mostly higher. If there was a concern, it was that the yield on the 10-year Italian bond reached 6.92%, up from 6.788% on Wednesday.

The day's gains for U.S. stocks were strong enough that the Dow and S&P 500 are up 1% and 0.6% for the month, respectively. The Nasdaq is off 0.8%. For the year, the Dow is up 5.2%, with the S&P 500 down just 0.3% and the Nasdaq down about 2%.

Futures trading suggests that the market will open higher on Friday. The session will have to deal with no economic reports and no earnings reports that can move markets. Most big traders will leave for the holiday weekend early. So volume for the day will be among the lightest for the year.

Markets will close Monday to observe Christmas, and volume will be weak all next week as well.

Gold moves lower; crude gains
Gold settled down $3 to $1,610.60 an ounce. While the metal is up slightly on the week, it's off about 8% for the month. Silver (-SI) was off as well; copper (-HG) was higher.

Crude oil briefly traded at exactly $100 a barrel in New York before settling at $99.53 a barrel, up 86 cents. It's up 6.4% this week. Brent crude was off 3 cents at $107.68 a barrel.

The dollar was down slightly, but interest rates were little changed. The 10-year Treasury yield was 1.951%, down from Wednesday's 1.967%.

Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$99.53

$98.67

-0.83%

8.92%
(per barrel)











Heating oil (-HO)

$2.9154

$2.9176

-3.63%

14.61%
(per gallon)











Natural gas (-NG)

$3.1690

$3.1550

-10.73%

-28.06%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6368

$2.6215

3.06%

7.48%
(per gallon)











Brent crude 

$107.89

$107.71

-2.38%

13.87%
(per barrel)











Retail gasoline

$3.2160

$3.2060

-2.40%

4.69%
(per gallon; AAA)












The economy looks to be growing -- and yet . . .
The number of applications for unemployment benefits unexpectedly dropped 4,000 to 364,000 in the week ended Dec. 17. It was better than expected. Nomura Securities had expected a decline to 366,000. A consensus estimate was around 380,000.

"One unexpectedly low number can easily be a fluke," wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics. "Two are interesting; three are telling us something real is happening in the labor market."


Couple the jobless claims report with improved moods of consumers and gains in leading economic indicators, and you have the recipe for a better 2012.


That assertion comes with some very important caveats. First, the latest snapshot of gross domestic product -- which measures all goods and services produced in the nation -- expanded at a 1.8% annual rate in the third quarter, instead of the 2.0% pace previously estimated. The decline was mostly because of weaker consumer spending for services. Health-care spending was weaker than in earlier estimates.


Second, Europe's woes are still a huge wild card. If the European Union can't get member nations' debt problems under control, the global financial system could seize up. Third, domestic politics are a mess, particularly in Congress. Fourth, oil prices have been rising again, particularly because of growing violence in Iraq. The price of gasoline is up 4.7% for the year after rising 29.7% between Dec. 31, 2010, and May 5. The declines since May have helped consumer moods. 


Dow utilities hit a new 52-week high

The Dow Jones Utility Average ($UTIL), up 1 point to about 460, finished just below its 52-week high, set earlier today. The index is up 13.6% for the year, a reflection of investor interest in dividend-paying stocks.


Thirteen of 15 stocks in the index are higher on the year, led by NiSource (NI), down 2 cents today to $23.19. Shares of the company, which supplies electricity and natural gas to customers from Texas and Louisiana to the Midwest and New England, are up 32% this year. The dividend yield is nearly 4%.


The gain for the utilities average is second among 44 domestic indexes that Market Dispatches tracks. Tops is the Morgan Stanley Healthcare Payors Index ($HMO), up more than 36%.

Financials look good today

Twenty-three of the 30 Dow stocks were higher, led by Bank of America (BAC), up 24 cents to $5.47; JP Morgan Chase (JPM), up $1.13 to $33.45; and General Electric (GE), up 53 cents to $18.05. The laggards were McDonalds's (MCD), down 60 cents to $98.60, and Coca-Cola (KO), down 38 cents to $69.19.


Bank stocks were generally higher, with the KBW Bank Index ($BKX) up 1.08 to 39.67.


Energy shares were higher. Winners included BP (BP), up $1.22 to $42.96 in New York, Exxon Mobil (XOM), up $1.17 to $84.29, and Baker Hughes (BHI), up $1.07 to $49.83.


Meanwhile, 70 Nasdaq-100 stocks were higher, led by Akamai Technologies. Akamai was also the leader among S&P 500 stocks. More than 390 stocks in the index were higher. 


Why Akamai is jumping

Akamai shares finished up $4.96 to $31.63. The gain was tops among Nasdaq-100 companies. The company has acquired privately held Cotendo, one of its largest competitors, in a deal valuing Cotendo at roughly $268 million.


Akamai and Contendo both operate content delivery networks, but Contendo has been better with a part of the business called dynamic content, which delivers content that changes on the fly, The Wall Street Journal said. Like Facebook updates.


That's a piece of Web delivery that is difficult to do, and the service generates more profit than simply streaming video on demand.


Akamai shares had fallen 49% through Wednesday since peaking in January because profit margins for its original business -- delivering contents that's stored on servers and sent when needed -- has shrunk under the pressure of burgeoning competition.


Enfamil worries slam Mead Johnson Nutrition
Mead Johnson Nutrition (MJN) dropped $7.72 to $68.76. The maker of the Enfamil baby formula plunged after Wal-Mart Stores (WMT) pulled a batch of the product from stores after a baby who had taken the formula died from a bacterial infection.


American Greetings (AM) sank $3.59 to $13.39, the biggest loser among stocks in the Russell2000 Index ($RUT). The second-largest U.S. maker of greeting cards posted third-quarter earnings of 50 cents a share excluding some items, missing Northcoast Research’s estimate of 81 cents a share. 


Housewares retailer Bed Bath & Beyond (BBBY) shares were off $3.85 to $57.58. The company beat the Street's earnings fiscal-third-quarter expectations but missed slightly on revenue. The company posted third-quarter profit of $228.5 million, or 95 cents a share, on sales of $2.34 billion. Analysts had expected earnings of 88 cents on revenue of $2.35 billion.


Yahoo's (YHOO) board is considering selling the bulk of the company's holdings in Alibaba Group of China and Yahoo's Japanese affiliate back to their majority owners in a transaction that values the stakes at about $17 billion, The New York Times reported. The board was expected to meet today to discuss the broad outlines of the offer. Shares rose a penny to $16.

Micron Technology
(MU) was up 87 cents to $6.41 after posting a first-quarter loss of $187 million, or 19 cents a share, on revenue of $2.09 billion. The company has been struggling with declines in pricing for dynamic random-access memory products. Analysts were expecting a loss of 8 cents a share on revenue of $2.13 billion.

Toyota (TM), up 25 cents to $64.50 in New York, forecast record global sales of 8.48 million vehicles in 2012 and 8.95 million vehicles in 2013, as the automaker bounces back from the March earthquake and tsunami in Japan that crimped production.

Toyota, Japan's No. 1 automaker, fell behind General Motors (GM) and Volkswagen (VLKAY)as the top global car seller in the first half of the year. Toyota said today global vehicle sales for this year have totaled 7.9 million vehicles, down 6% from a year ago.

Editor's note: Confused by the European debt crisis? This BBC graphic offers a simple way of understanding how the crisis built. You'll find many echoes of what happened in this country. (Thanks to The Big Picture blog for surfacing the graphic.)

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.110%

0.00%

-91.67%
5-year Treasury note 

0.917%

0.917%

-3.68%

-54.51%
10-year Treasury note

1.951%

1.967%

-5.66%

-40.97%
30-year Treasury bond

2.981%

3.001%

-2.65%

-31.66%
Currencies











U.S. Dollar Index

80.306

80.350

2.31%

1.28%
British pound

1.5672

1.5679

-0.08%

0.42%
(in U.S. $)











U.S. $ in pounds

£0.638

£0.638

0.08%

-0.42%
Euro in dollars

$1.30

$1.30

-2.97%

-2.53%
(in U.S. $)











U.S. $ in euros

€ 0.767

€ 0.766

3.06%

2.60%
U.S. $ in yen 

78.31

78.04

0.63%

-3.76%
U.S. $ in Chinese

6.35

6.33

-0.56%

-3.95%
yuan











Canada dollar

$0.977

$0.000

-0.46%

-2.67%
(in U.S. $)











U.S. dollar 

$1.025

$1.026

0.46%

2.75%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,610.60

$1,613.60

-7.98%

13.31%
(per troy ounce)











Copper (-HG)

$3.416

$3.395

-4.47%

-23.20%
(per pound)











Silver (-SI)

$29.0470

$29.2490

-11.45%

-6.11%
(per troy ounce)











Wheat (-ZW)

$6.2175

$6.1700

1.26%

-21.72%
(per bushel)











Corn (-ZC)

$6.1750

$6.17

1.56%

-0.80%
(per bushel)











Cotton 

$0.8708

0.8666

-4.21%

-39.87%
(per pound)











Coffee

$2.2140

2.199

-6.54%

-7.94%
(per pound)











Crude oil (-CL)

$99.53

$98.67

-0.83%

8.92%
(per barrel)










 

76Comments
Dec 22, 2011 4:17PM
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It's all smoke & mirrors to ease the tension & our elected officials in Washington can slither out & go on their holiday break looking  a little rosier when we all know this is nothing but manipulated news.  Here is something for Washington to think about during your holiday break:

Posted by AAA : Gas Prices for December of 2006 = $2.28 gallon

                                                        December of 2007 = $2.89 gallon

                                                        December of 2008 = $1.51 gallon

                                                        December of 2009 = $2.50 gallon

                                                        December of 2010 = $2.94 gallon

                                                        December of 2011 = $3.12 gallon

Has anyone's salary gone up like the price of energy?....AND WE ARE NOT BEING LIED TO OR MANIPULATED....YEAH RIGHT!!!!!!!!!

avatar
Seasonal jobs.....these are not the kind of jobs that help people pay a mortgage or feed their families. These are temporary Xmass jobs. More lies from the Liberal news media to support Obama. I think the American people have had enough.
Dec 22, 2011 3:56PM
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How can we be happy with 366K first weekly job claims.....? A good number and always had been was about 150K - 200K / week. We are no where near that...! As more and more american give up searching for jobs the unemployment rate continue to incorrectly give you the true picture of the economy. Get ready for server inflation....to hit everywhere.......as airlines are reducing capacity and fuel prices rise....also look for Car sales to fall again.....and retail stores attempt to stay very very late to try to hit the sales numbers ...which will not work.....as skeleton crews at night in stores twitle their thumbs....in the end a flat to disappointing year dispite the quick start Hype! Look for Q1 to be terrible and Q2 to be worse....as the tax holiday expires and the unemployment benefits expire for hundred of thousands.....and for the people that are all out of tiers and have exhusted all benefits look for poverty to increase and food stamp reciepents to continue to increase......a mild winter also adds to the shopping debuckle.....and the great divide of classes and incomes becomes great every month...!!! The media only continues to show false and overly optimistic outlooks, investment so called "buying opportunities", highly projected returns an speculative risk reward analyst to BRAINWASH you in thinking it will get better.....IT WILL NOT.....

WE ARE STILL AT THE START OF THE WORSE PROLONGED RECESSION EVER...!!!

It has only been delayed by the infussion of Trillions by the printing of money from all sides.....They cannot maintain the shell game any longer...THE EURO ZONE IS ABOUT TO CAVE IN MID 2012 and the US to follow......!

Dec 22, 2011 2:49PM
avatar
mutual funds, institutional buying are tweaking their holdings to establish bragging rights for our 401K-IRA statement reports in january.  they want to be able to claim they are holding all the best stocks for this dismal year. 
Dec 22, 2011 4:51PM
avatar
Another 4000 peoples unemployment ran out Whoopi, happens every week.
--------------
The numbers reported are first-time claims, Einstein.
Dec 22, 2011 3:53PM
avatar

Kong

 

   Exactly right.....Of course jobless claims have been falling. Businesses have been hiring temporary (seasonal) workers in hopes of increasing sales and making more profit. Talk to me in January when we see where the claims are then and also the profits that were made....very heavy discounting going on...good for consumers, bad for businesses. But let's just talk about the positive stuff because that's all the market wants to hear this time of year.

Dec 22, 2011 3:19PM
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The view is always good at the top. But it is a borrowed recovery. Nobody prospers by borrowing and spending on consumer economy. The debt load of the economy is too much. It cannot carry the burden of servicing excessive debt. Nothing has been fixed. Debt was the problem to begin with and we have more of it now. Google for "DEFLATIONARY CRASH KONDRATIEFF WAVE" to understand the deflationary forces in the economy. Next time you hear consumer is holding up the economy, keep in mind, it only means we are spending the money we don't have. It is a dead end. It will crash.


Dec 22, 2011 4:24PM
avatar
I'm finally accepting that this market has nothing to do with individual companies and how they actually grow their business by either selling more products/services, expansion into new markets, improved efficiencies etc.  This market is now moved up and down strictly on information that may or may not be truthful based consumer indexes, job reports, unemployment reports, manufacturing reports, consumer confidence with a large dose of hype and hope.  Come January I think reality will kick in when the actual net retail sales and more importantly profits show this wasn't a great holiday season.  In addition, house prices for most of the country will remain flat and even decline further and the job picture for full time, good paying sustainable jobs here in America will remain dismal.  I am not a pessimist but a realist and only wish that we could elect leadership to address the problems so we can work on getting this country out of the rut and back on it's feet for the good of all of us.   
Dec 22, 2011 5:17PM
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Endeavor, I think the democrats in congress should make the same resolutions. They aren't completely without fault here.
Dec 22, 2011 4:15PM
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football season is almost over ,  in two weeks all the get your cold beer here is over Beer mug  jobless claims go back up
Dec 22, 2011 4:49PM
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Hell   it is Christmas.  People working at anything, part time, low wages, just make a little money. But ask obame, the 4th best president of all time. He is creating jobs, lol   He would not know how to create 1 Job  never has never will.  Hey   blame it on Bush. He has and does every day for the last 3 years.  No responsibility    a do nothing pres. but can campaign, and spend money  ie. almost 5 TRILLION, and Vacation. OH YEA   and can pay back donators. He knows nothing about Business.  Its a shame    God Bless America   we will need it
Dec 22, 2011 6:18PM
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Happy and Healthy Holidays to ALL......Finally are troops are coming home from Iraq, NOW GET OUT OF AFGHANISTAN!  Osama Bin LADEN  has FINALLY PAID the ULTIMATE PRICE! LEAVE the mercenary tribal factions to kill each other! Why  spend the BILLIONS of DOLLARS that are draining are country? The Taliban was ONE of  six or more factions fighting a CIVIL war and they werent even  the TOP one , UNTIL WE Got involved! PAKISTAN is a lousy ALLY , Who was COMPLICIT in HIDING Bin LADEN!! Let them Continue to kill each other instead of Nato Troops,and having the population HATE the US for getting involved! THIS is TEN times worse then VIETNAM! ALL of the National Guard soldiers ,who's LIVES were sent into CHAOS deserved better! They were supposed to be a reserve for NATIONAL EMERGENCIES< not as ground occupation troops in foreign wars!
Dec 22, 2011 6:38PM
avatar

someone,

 

Sorry to hear of your situation. Hang in there, Being broke around the holidays isn't much fun, but take the season to heart and look forward to a brighter day. "Let your heart be not troubled, and let it not be afraid.".

 

There are still some trials ahead for all of us. Remember that government in the final analysis only looks out for its own self interest, and you will need to depend on your own drive and courage to look out for yours.

 

Good luck and God bless   

Dec 22, 2011 5:11PM
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Gas prices here went up in some areas as much as 25 cents a gallon just since last night. It was also reported today that Wisconsin lost just over 11K jobs in November. Most were from the private sector. State is still struggling, but some areas of the economy seem to be doing ok.
Dec 22, 2011 3:18PM
avatar

they can fire off computer buying spikes to force the market to follow them higher, buy all their dog holdings.  then fire off computer buying spikes lower to buy potentially better stocks to hold.  like a school of fish the mass follows direction with a heard mentality. 

 

mutual funds, institutional buying are tweaking their holdings to establish bragging rights for our 401K-IRA statement reports in january.  they want to be able to claim they are holding all the best stocks for this dismal year. 
Dec 22, 2011 6:07PM
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It seems to me that Jon Corzine is a connected Millionaire...otherwise he'd be in jail.
Dec 22, 2011 6:11PM
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Jon Corzine stole a billion or so dollars from his clients at MFGI. That's about ten times what Bernie Madoff stole. His sentence should be ten times longer.
Dec 22, 2011 10:32PM
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the only people who think the economy is good are the odumbo/democat voters(after all they are all living off the taxpayers aka welfare/government workers)and government workers  never have to worry about getting laid off , most of them dont work anyway and get twice the pay and benefits of a comparable private sector job, as well the best retirement taxpayer money can buy. I bet all of us would love to work 10 or 15 years and retire with 80% of our salary and free health care/ dental care for life, and because the vast majority of government workers are female and thats almost 40 + years we the taxpayer funds the best retirement plans on the planet, unavailable in the private sector

Dec 22, 2011 5:36PM
avatar

Take a moment to reflect on your life...

     There are many folks without a job, families still struggling out there, living in a car or some outreach church. Kids are going hungry and parents are angry because they are unable to provide for them.

     Put aside your ego and pride and be thankful for what you have. If you do "have," give cheerfully to those in need, and to those that are too stubborn and prideful to expect anything. Love is a powerful thing, remember where you came from, how you were brought up, and how the world used to be so much more simpler.

    Times have changed, but love is still what it is... The most powerful gift in the universe. Have a Merry Christmas.  Red heart

 

Dec 22, 2011 5:29PM
avatar
Agreed, but I think all of Congress is dysfunctional and has been for years.
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