Dow jumps 183 as retail sales boost stocks

Stocks rise for the third straight day on more signals the economy and Europe aren't falling apart. Apple shares slip from early highs after Steve Jobs' death. Yahoo tumbles. Gold and oil rise.

By Charley Blaine Oct 6, 2011 3:07PM

Charley BlaineUpdated: 9:45 p.m. ET

 

Stocks rallied for the third straight day, thanks to decent September retail sales in the United States and more signs from Europe that government and banking leaders are starting to work toward a real solution of its debt crisis. 


There were also some hopes that Friday's jobs report, due at 8:30 a.m. ET, might produce better-than-expected results.

Apple (AAPL) shares were down 0.2% to $377.37 on the first day of trading after the death of co-founder Steve Jobs. The shares had risen as much as 1.7% in early trading, and the company's market capitalization briefly took the top spot in the world from Exxon Mobil (XOM).

The rally, led by banking stocks, came as mortgage rates fell below 4% for the first time ever. It's not expected to help demand, however. At the same time, gold (-GC), silver (-SI), copper (-HG) and crude oil (-CL) were all higher. 

The Dow Jones industrials ($INDU) closed up 183 points, or 1.7%, to 11,123. The Standard & Poor's 500 Index ($INX) was up 21 points, or 1.8%, to 1,165. The Nasdaq Composite Index ($COMPX) had added 46 points, or 1.9%, to 2,507, and the Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 35 points, or 1.6%, to 2,218.

Article continues below.

Futures trading suggests a down open for stocks, but the market trend may change when the jobs report is released.

The consensus is for nonfarm payrolls to increase by 50,000 after the August report said the economy produced no new jobs overall. The rate of job growth has been slowing for much of the year, especially after the March 11 earthquake and tsunami in Japan.

The unemployment rate is seen holding at 9.1%.

Geithner's comments lift bank stocks
Banking stocks jumped after Treasury Secretary Tim Geithner told the Senate Banking Committee there was "absolutely no chance" that a U.S. financial institution could collapse as Lehman Brothers did in September 2008.

The comment came as Geithner was asked about Morgan Stanley (MS), the big investment house, whose shares are off 44% this year, with most of the gain coming in the third quarter. Morgan Stanley

There has been conjecture that Morgan Stanley is vulnerable to a collapse in Europe.

"The direct exposure of the U.S. financial system to the countries under the most pressure in Europe is very modest. Europe as a whole, though, is a big deal," Geithner said.

Morgan Stanley closed up 4.8% to $15.18. Bank of America (BAC) was up 8.8% to $6.28. The KBW Bank Index ($BKX) added 4.6% to $37.16.

Why Apple's share price matters
Investors have been watching Apple's share price with more than simple curiosity because of Steve Jobs' death.

The company and Exxon Mobil have been vying for the bragging rights as the world's most valuable company since the summer. Apple

For several weeks, Apple was on top, but the market slump in September knocked the stock down more than 10% from its intraday high of $422.86 on Sept. 20 through Wednesday. On Tuesday, the day before Jobs' passing, Apple's market cap fell below Exxon's.

Just before today's close, Exxon was ahead $356.1 billion to $348.4 billion.

Jobs' influence on technology and on business are enormous. Apple is well on its way to generating revenue of more than $100 billion for its 2010-11 fiscal year. Its iPod, iPhone and iPad products transformed the company into much more than a computer company. The iPad's sales already are larger than the notebook sales of both Hewlett-Packard (HPQ) and Dell (DELL). Its iTunes music store is the world's largest music retailer.

And, of course, Jobs' obsession with melding simplicity in operating a product with great design forced others to take note.

If you had bought 100 shares of Apple at $6.56 on April 17, 2003, its bottom after the dot-com bust, you would be quite happy. Your $656 investment would be worth $37,680 today -- a 5,600% gain.

Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$82.59

$79.68

4.28%

-9.62%
(per barrel)











Heating oil (-HO)

$2.8611

$2.7766

2.94%

12.48%
(per gallon)











Natural gas (-NG)

$3.5980

$3.5700

-1.85%

-18.32%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.6860

$2.5692

5.83%

9.49%
(per gallon)











Brent crude 

$105.73

$102.73

2.89%

11.59%
(per barrel)











Retail gasoline

$3.3920

$3.3990

-1.54%

10.42%
(per gallon; AAA)












Commodities surge as the euro gains strength
The dollar moved lower against major currencies, especially the euro, after the European Central Bank made more aid available to banks on the continent, and there was talk from German Chancellor Angela Merkel and others on the need for many banks to raise new capital to shore up the banking system.

The European Central Bank vowed to buy up bonds issued by European banks and offered emergency loans to the banks to ensure they can meet daily obligations.

At the same time, Merkel and others were speaking again about recapitalizing many banks to ensure their viability. Europe's banks have not had to meet the capital requirements of U.S. banks and have struggled under the weight of the Greek debt crisis and economic slowdown on the continent.

As the dollar moved lower, commodities jumped. Crude oil was up $2.91 or 3.1% to $82.59a barrel. Gold settled up $11.60 to $1,653.20 an ounce, and silver added $1.653 to $32.01 an ounce, a gain of 5.5%.

Interest rates also moved higher, with the 10-year Treasury yield rising to 1.986% from Wednesday's 1.905%.

The market's stunning turnaround
The Dow is up more than 468 points, or 4.4%, in the last three days days of trading. The S&P 500 has gained 6% in those three days, with the Nasdaq rising 7.3%.

If you measure the gains from the lows on Tuesday, they're much larger: 6.9% for the Dow, 8.4% for the S&P 500 and 9% for the Nasdaq.

The major indexes are in position to finish the week with a gain; it would be the Dow's second weekly gain in a row. The gains would be welcome. The market's third quarter was miserable. The Dow fell 12.1%, with the S&P 500 off 14.3% and the Nasdaq down 12.9%.

Better, they have blasted through several resistance levels and have some analysts talking about a big year-end rally.

Some skepticism is appropriate, however. First is the obvious: The European problems are still quite dangerous. President Obama discussed his worries that a European meltdown could seriously damage the domestic economy.

Second, the S&P 500 finished at just above 1,165. That's the upper band of its trend line since Sept. 20 (ironically, the day Apple hit its all-time high). What often happens in these instances is that stocks pull back. A weak jobs report would offer the perfect trigger.

Some cheer from retailers
Target (TGT), Nordstrom (JWN), Macy's (M) and other retailers reported September sales results that beat Wall Street's expectations. While some of the sales were driven by deep discounts, analysts said higher sales figures suggested the U.S. economy was not falling into another recession.

The retail reports helped the Standard & Poor's Retail Index ($RLX) move up 2.1% to 510.

There were a few disappointments -- JC Penney (JCP) saw a September slip compared with a year ago and cut its earnings forecast. Wet Seal (WTSLA) shares fell 12.5% to $4.05 after its sales missed estimates.

A broad rallyexcept for Apple
This was a really broad rally, with financial stocks giving matters an extra push. There were sizable gains for transportation and semiconductor stocks. Gainers were ahead of decliners 9-to-1 on the New York Stock Exchange and 7-to-3 on Nasdaq.

Twenty-six of the 30 Dow stocks gained on the day, led by Bank of America and Alcoa (AA), which reports third-quarter results after Tuesday's close. Coca-Cola (KO) was the laggard, down 0.2% to $65.39.

A total of 468 S&P 500 stocks were higher, led by Express Scripts (ESRX), up 11.4% to $40.02, and Wynn Resorts (WYNN), up 10.5% to $132.58. The laggards were coal-producer Alpha Natural Resources (ANR), down 2.7% to $19.17, and Yahoo (YHOO), down 1.7% to $15.65.

Yahoo fell on reports Microsoft (MSFT) may not bid for the company. (Microsoft publishes MSN Money.)

Eighty-five Nasdaq-100 stocks were higher, led by Express Scripts and Wynn Resorts. Yahoo was the laggard.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.010%

-50.00%

-91.67%
5-year Treasury note 

1.006%

0.960%

4.25%

-50.10%
10-year Treasury note

1.986%

1.905%

3.22%

-39.91%
30-year Treasury bond

2.949%

2.883%

0.96%

-32.39%
Currencies











U.S. Dollar Index

79.088

79.385

0.02%

-0.25%
British pound

1.5439

1.5442

-0.90%

-1.07%
(in U.S. $)











U.S. $ in pounds

£0.648

£0.648

0.90%

1.08%
Euro in dollars

$1.34

$1.34

0.54%

0.27%
(in U.S. $)











U.S. $ in euros

€ 0.745

€ 0.744

-0.53%

-0.27%
U.S. $ in yen 

76.86

76.69

-0.34%

-5.53%
U.S. $ in Chinese

6.37

6.38

-0.11%

-3.69%
yuan











Canada dollar

$0.963

$0.964

0.87%

-4.01%
(in U.S. $)











U.S. dollar 

$1.039

$1.037

-0.79%

4.18%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,653.20

$1,641.60

1.90%

16.31%
(per troy ounce)











Copper (-HG)

$3.247

$3.106

3.00%

-27.00%
(per pound)











Silver (-SI)

$32.0050

$30.3520

6.39%

3.45%
(per troy ounce)











Wheat (-ZW)

$6.1600

$6.2525

1.11%

-22.44%
(per bushel)











Corn (-ZC)

$6.0550

6.055

2.19%

-2.73%
(per bushel)











Cotton 

$1.0273

1.023

2.54%

-29.06%
(per pound)











Coffee

$2.3440

2.277

2.40%

-2.54%
(per pound)











Crude oil (-CL)

$82.59

$79.68

4.28%

-9.62%
(per barrel)










 

68Comments
Oct 6, 2011 3:44PM
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Another typical day on Wall Street with more BS leading the way. Oil up again. The price for #2 heating oil is $3.70 a gallon in my area and heating season has not even started yet. With the federal government cutting heating assistance to many states, this means that many famiies will be left out in the cold this winter. I am sure that our Government will take that money that they took away and use it to fight their senseless wars that we will never win. It is time for our country to take care of it's own, instead of the whole world. Greed on Wall Street is making it nearly impossible for the average American family to get by. It's okay if old people freeze, as long as the Moron Traders get their millions to put in their bank accounts. What a darn shame.
Oct 6, 2011 3:48PM
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HOW IMPRESSIVE,ANOTHER DAY OF MENOPAUSAL DOUCHES CONTROLING THE AMERICAN WAY AND A WELL PAID MORON TO REPORT IT-NOBODY GIVES A DAM ABOUT UNEMPLOYMENT BECAUSE WHEN YOU ARE ONE OF THE SELECT FEW WITH VAST RESOURCES THE UNEMPLOYED ARE OF NO CONCERN TO YOU.
Oct 6, 2011 3:49PM
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its up its down??  more lies  things donot change like you want us to belive so quickly, insider trading is more lies than truth. 500,000 jobs would be better news than its up its down bull s--- we hear everyday. action not words mean more than paper trades to the workers. who bare the burden of trying to take care of our families with paper lies that do not help us with JOBS!!!!!!!!!!!!  
Oct 6, 2011 4:29PM
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What a ridiculous scam. How Wall Street can get away with such manipulation, fraud, and affecting the whole country is sickening and beyond me. Angry

 

One minute we are crashing, the next minute unemployment goes UP but its not as much as 'they thought' so whoopie! We have a strong economy after all, lets buy up commodities. I bet next week some news will come in - likely that consumers arent buying gasoline now that prices are back up to $3.89/g and the market will crash again.

 

Absolute joke. Always been, but what we've all always suspected is now no longer a cover up - its happening right before us and all of Wall Street is laughing, because they know there is NOTHING we can do.

Oct 6, 2011 7:27PM
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IS FUNNY HOW THOSE WHO RUN THE COUNTRY SEEM TO BE SUCH POOR STUDENTS OF HISTORY. ALL YOU HAVE TO DO IS LOOK AT IS WHAT HAS DESTROYED EVERY GREAT EMPIRE THROUGHOUT HISTORY AND YOUR FIND THE SAME COMMON FACTORS: GREED, CORRUPTION, IMMORALITY, ETC. JUST REMEMBER EVERY GREAT EMPIRE HAS BEEN DESTROYED FROM WITHIN. SELF IMPLODED! OUR GREAT COUNTRY IS IN THAT SITUATION NOW , AND ON THE DECLINE. WE NEED DRASTIC ACTION BEFORE IS TOO LATE TO TURN THINGS AROUND.
Oct 6, 2011 3:48PM
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Now if all those idiots who think Greece is part of the United States would buy an atlas, the US economy would be in full recovery by now.
Oct 6, 2011 4:21PM
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Petro_Crash_2011

 

Lowering the price of crude defeats what they want.  They are trying to indebt the world to them so that they have total and absolute power and control of everything including you.

Oct 6, 2011 3:52PM
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The t#rd floated back up today. We'll see it go back down Friday when the big profit taking happens.

Wonder how many jobs todays or yesterdays upswing created??????

More chumming today. Don't it make you just want to go and buy,buy,buy. Bet thats what the manipulators are thinking. They're folding out the seats in the theater for every a$$ they can squeeze in.

Oct 6, 2011 4:22PM
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The golden number is 11000. If the PPT has to shave every **** in america to keep it there they will. This bull crap is so rigged, Its like putting corn out to bring the deer in closer  for a good clean shot.
Oct 6, 2011 3:18PM
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THERE'S ONLY ONE CURE FOR THE DECEASE

 

But sadly Dunn, there's no cure for your Stupidity DISEASE! Eye-rolling

 

Luckily, making money doesn't always require much education.Nerd

Oct 6, 2011 3:35PM
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This whole stock market is such a load of bulldooky!  Are you serious, and are you people really that blinded by the tons of crap!  Really???  Europe is now bailing everyone out?  With what money?  More of the phony money like we have been printing in the US from the Federal Reserve.  The Dollar is dead!  The Euro is dead!  The Pound is dead!  But you all keep on buying into this stock market game they are playing with your heads with.  What money is being pumped into the market anyhow?  Oh that is right, it is the 1% power control freaks playing yo-yo with the market.  It makes it more interesting and fun you see.  Once you have all the money in the world and left with no friends, the only thing left for you to do is try to intimidate them.  So today guess these morons are in a good mood want to see people cheer.  Tomorrow they will decide you had to much happy time and then boom, the market will start falling as they watch you cry some more.........HAHAHAH​AHA.  Hope you all are enjoying your ride they are giving you.  Because they certainly find it entertaining. It's a recession; no it's a recovery; no it's recession; no it's recovery.  The whole global economy is almost bankrupt, wake up!
Oct 6, 2011 8:49PM
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Article continues below.

Geithner's comments lift bank stocks
Banking stocks jumped after Treasury Secretary Tim Geithner told the Senate Banking Committee there was "absolutely no chance" that a U.S. financial institution could collapse as Lehman Brothers did in September 2008.

Don't I recall a great mentor of Geithner making this same type of statement in 2008 about Lehman Brothers?
Hmmm let's see his name was       Paulson I believe, yes Henry Paulson. Wonder where he is now ?
Oct 6, 2011 8:47PM
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Sad If the retail sales increased that means the retailers made bigger profits? It looks like the stock market made bigger profit than the retailers.Disappointed
Oct 6, 2011 8:13PM
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Open-mouthed LMAO endeavor ....

 

"You can't overthrow Wall Street!  Wall Street is not a Government nor was it ever meant to be."

 

                                and just who do you think runs our government??

 

the three government branches are the 1) the congress, 2) the corporate CEO's (puppets of the wealthy crony capitalists) and 3) the wall street/banksters.  you need to go take a modern day civics course or spend a few days with the occupiers and get your head right.

 

read some rolling stone matt taibbi, some shock doctrine, some skull & bones secret society, etc.  yeeesh  Eye-rolling   ... how out of touch ...... 

Oct 6, 2011 4:19PM
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This is the problem with this rational.  So stocks are rallying now for 3 days because retail sales are only up by a very small amount.  And this, gets written off as some kind of a massive surge, while blinders get put on and everything else we've heard is suddenly unimportant /rofl

 

First question anyone should be asking with such figures is if things are being adjusted for inflation or not.  If retailers are making say 0.5% more in NOMINAL dollars, but the rae of inflation over the same period of time is 0.7% for instance, then people aren't really buying more; they're spending more, but getting fewer goods and services for the nominal dollar amount.  Unless we're dealing in real dollars, it simply isn't as meaningful.  But what the hay, people will have their rally, and forget the stresses effecting main street and the whole demand side of the economy, as people still find themselves unemployed and underemployed.  Afterall, see no evil, hear no evil, etc, etc....  I would still, for purposes of understanding what is actually taking place, rather not get all the facts and figures in nominal dollar amounts, even while the dollar continues to have less spending power attached to it.  Real dollar amounts, or money adjusted for inflation is what should be used, so things are presented in a way that that variable is taken into account, and seen past.

Oct 6, 2011 5:42PM
avatar

independentvoter,

 

Guess you missed that news today.  Europe found a treasure of more funny money they had buried in the back yard.  They are rich again and are going to save the world!  YAY!

 

                                             ~SARCASM~

Oct 6, 2011 5:03PM
avatar

Steve Jobs 1955- 2011

R.I.P.

 

To see a world in a grain of sand
And a heaven in a wild flower,
Hold infinity in the palm of your hand
And eternity in an hour.
  ( from Auguries of Innocence by William Blake)

 

Oct 6, 2011 7:24PM
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It's funny this guy writes this junk on the same day that Dr. Robert Shapiro (an advisor to the IMF) says that if there is no solution to the problems in the Eurozone then we could see a meltdown in 2-3 weeks that makes 2008 look like a picnic. Go check on Zerohedge dot com, it's the top story right now.
Oct 6, 2011 3:57PM
avatar
I see the swing shift soreheads have punched in.
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