Dow up 85 as tech gains boost stocks

Research In Motion results disappoint investors. The major averages have recovered all of their losses since the March 11 Japanese earthquake. Best Buy's forecast disappoints. Gold and oil pull back.

By Charley Blaine Mar 24, 2011 12:59PM
Charley BlaineUpdated: 6:49 p.m. ET

Stocks surged higher today thanks to more evidence of recovering jobs and strength in technology stocks on the heels of strong earnings from Red Hat (RHT) and Micron Technologies (MU).

Gold, silver and crude oil began the day by pushing higher on continuing uncertainty in Libya, Japan and Portugal. But profit-taking and a boost in margin requirements on silver trading pushed the metals lower. Crude also fell back.

Shares of Research In Motion (RIMM) were sharply lower after hours after guidance disappointed investors. Oracle (ORCL) shares were little changed even as results beat estimates.

The Dow Jones industrials ($INDU) closed up 85 points, or 0.7%, to 12,171. The blue chips had been up as many as 105 points. The Standard & Poor's 500 Index ($INX) was up 12 points, or 0.9%, to 1,310, and the Nasdaq Composite Index ($COMPX) added 38 points, or 1.4%, to 2,736.

The gains were the fifth in six sessions, and the major indexes have regained all of their losses since the March 11 earthquake and tsunami in Japan.  The Dow is still down 1.8% from its Feb. 18 peak, with the S&P 500 off 2.5% and the Nasdaq down 3.4%.

Stocks look to open modestly higher on Friday. The government will report on the latest estimate for fourth-quarter gross domestic product. The University of Michigan will issue its final estimate of consumer confidence for March.

Research In Motion results dismay Street
Research In Motion shares tumbled 11.8% to $56.51 after hours as its guidance for the fiscal first quarter came in lower than expected. The company cited lower average selling prices for its BlackBerry devices and higher research and development and market costs for its new PlayBook tablet and operating platforms.

The company earned $1.78 a share on revenue of $5.56 billion. The earnings beat Street estimates of $1.76 a share but were slightly lower than the revenue estimate of $5.64 billion. Earnings were up 40% from a year ago; revenue was up 36%.

Oracle said it had earned 54 cents a share in the fiscal third quarter on revenue of $8.76 billion. Both beat Street estimates of 50 cents and $8.67 billion. The company also boosted its dividend 20% to 6 cents a share.

Oracle was up 2.3% to $32.14 in regular trading and had risen to $32.86 after hours.

Energy prices -- New York close
 
  Thur.     Wed.     Month chg.     YTD chg.
Crude oil 

$105.60     $105.75     8.90%     15.56%
(per barrel)

 

 

 

 
Heating oil

$3.0620     $3.0550     4.00%     20.38%
(per gallon)

 

 

 

 
Natural gas 

$4.2440     $4.3350     4.84%     -3.65%
(per mil. BTU)

 

 

 

 
Unleaded gasoline

$3.0448

$3.0213

4.84%

-3.65%
(per gallon)

 

 

 

 
Brent crude

$115.72     $115.55     3.51%     22.11%
(per barrel)











Retail gasoline

$3.5510

$3.5480

5.43%

15.59%
(per gallon; AAA)












Gold and silver push up, then drop back
Gold had reached $1,446.90 an ounce but fell back to settle at $1434.90 an ounce, down $3.10 from Wednesday. Silver climbed to as high as $38.045 an ounce before falling back and settling at $37.36. That's still a gain of nearly 18 cents. One reason silver fell back was that the CME Group boosted margin requirements by 5% to keep a lid on speculation.

Crude oil topped $106 before selling hit the market. Crude settled at $105.60 a barrel, down 15 cents. It was trading electronically at $105.18, down 57 cents from Wednesday, at 3:30 p.m. ET.

Interest rates were higher, with the 10-year Treasury yield reaching 3.404%, up from Wednesday's 3.348%. The dollar was lower against major currencies.

There was modestly good news on the jobs front. New jobless claims fell by 5,000 to 382,000 in the week ended March 19, Labor Department figures showed. The total number of people receiving benefits dropped to the lowest level in almost three years.

On the other hand, a Commerce Department report showed that orders for long-lasting goods unexpectedly fell 0.9% in February, reflecting declines in demand for capital goods and military aircraft. The decline came after a 3.9% gain in January.

A big day for techs
Technology stocks -- especially big tech stocks -- ruled today's market. The Nasdaq-100 Index ($NDX.X), which tracks the largest Nasdaq shares, was up 42 points, or 1.8%, to 2,312.

Micron, the biggest U.S. producer of computer-memory chips, rose 8.4% to $11.50, tops among Nasdaq-100  stocks, and Linux-software maker Red Hat surged 18.2% to $47.26 after earnings beat analysts’ estimates.

GameStop (GME) jumped 2.9% to $21.73. The video-game retailer forecast profit that topped analysts' projections.

Amazon.com (AMZN) gained 3.5% to $171.10 after William Blair & Co. analyst Mark Miller raised his rating for the online retailer to "outperform." He downgraded Wal-Mart Stores (WMT) and Target (TGT) to "market perform." Wal-Mart, nonetheless, was up 1.8% to $52.59. Target rose 0.7% to $50.61.

Nvidia (NVDA) was up 8% to $19.23, second-best among Nasdaq-100 stocks after Micron. Gains for Apple (AAPL), Qualcomm (QCOM), Amazon.com, Oracle and Teva Pharmaceutical (TEVA) contributed more than 15 points of the Nasdaq-100's gain.

Drugstore.com (DSCM) jumped 113% to $3.82. The online pharmacy business agreed to be bought by Walgreen for $3.80 a share, or $409 million, in cash. The acquisition will help Walgreen expand its online business. Walgreen rose 0.3% to $39.95.

Shares of Best Buy (BBY), meanwhile, were down 5.4% to $30.13 despite beating estimates on fiscal earnings for the fourth quarter. But the electronics retailer said a slack economy would trim earnings in the 2011-12 fiscal year. The company forecast earnings of $3.30 to $3.55 a share. The consensus Street estimate has been $3.55. Best Buy also said it plans to trim its offerings at its stores.

Earthquake may trim global auto production
Parts shortages caused by Japan’s record earthquake may reduce global automobile production by about 30%, research firm IHS Automotive said today.

If parts plants affected by the quake don’t return to operation within six weeks, global auto output may drop as much as 100,000 vehicles a day, said analyst Michael Robinet. The industry produces 280,000 to 300,000 vehicles daily, he said.

"Most vehicle manufacturers will be affected by this," Robinet told Bloomberg News. "It will be very difficult for any major automaker to escape this disaster."

About 13% of global auto industry production is down and production of about 320,000 vehicles has been lost, mostly in Japan, Robinet said.

General Motors (GM) has been forced to trim production at plants at Shreveport, La., and Lockport, N.Y., because of parts shortages.

Toyota (TM) told its U.S. employees to expect production cutbacks. However, the company expects to resume production of its Prius hybrids next week.

Honda (HMC), however, won't resume production of cars in Japan until April 3.

Global stocks see some gains
Global stocks traded mostly higher despite continued worries about Japan's efforts to contain its nuclear crisis. Stores in Tokyo have started to ration bottled water and other items after hazardous levels of radiation were detected in Japanese tap water, milk and vegetables.

 

In Libya, allied forces continued to pound troops loyal to the country’s embattled dictator, Moammar Gadhafi. 


Portugal’s Parliament rejected the government’s austerity plan on Wednesday, prompting the resignation of its prime minister, Jose Socrates, and increasing the likelihood that the country will seek a rescue package similar to those granted to Greece and Ireland.

 

European Union leaders were meeting in Brussels today and Friday to discuss improvements to economic policy for the 17 countries that use the euro.


Japan shares move lower

Japanese shares slipped today, with a sell-off in Tokyo Electric Power and financial firms weighing on the market as radiation leaks from a quake-stricken nuclear plant stifled any optimism on the global economy.

Analysts told Reuters that the problems at the troubled Fukushima Dai Ichi power station  remain the key focus for investors.


Japan's Nikkei 225 Index ($JP:N225) fell 14 points to 9,435. Futures trading suggests a flat open when the Japanese stock market opens on Friday.

Short hits from the markets -- New York close
 
  Thur.     Wed.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.080%

0.090%

-42.86%

-33.33%
5-year Treasury note 

2.113%

2.046%

-1.12%

4.81%
10-year Treasury note

3.404%

3.348%

-0.29%

3.00%
30-year Treasury bond

4.470%

4.448%

-0.45%

2.48%
Currencies











U.S. Dollar Index

75.888

76.046

-1.34%

-4.29%
British pound

$1.6119

$1.6250

-1.00%

3.29%
(in U.S. $)











U.S. $ in pounds

£0.620

£0.615

1.01%

-3.18%
Euro in dollars

$1.419

$1.410

2.63%

6.06%
(in U.S. $)











U.S. $ in euros

€ 0.705

€ 0.709

-2.56%

-5.71%
U.S. $ in yen 

81.103

80.920

-1.22%

-0.32%
U.S. $ in Chinese

6.584

6.554

-0.13%

-0.47%
yuan











Canada dollar

$1.025

$1.020

-0.50%

2.12%
(in U.S. $)











U.S. dollar 

$0.977

$0.981

0.51%

-2.07%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,434.90

$1,438.00

1.46%

0.95%
(per troy ounce)

 

 





Copper

$4.425

$4.429

-1.02%

-0.51%
(per pound)











Silver

$37.375

$37.198

10.14%

20.81%
(per troy ounce)











Wheat 

$7.3950

$7.1425

-9.76%

-6.89%
(per bushel)











Corn

$7.0250

$6.8100

-3.90%

12.85%
(per bushel)











Cotton 

$2.0882     $2.0187     1.79%     44.20%
(per pound)











Crude oil 

$105.60

$105.75

8.90%

15.56%
(per barrel)












9Comments
Mar 24, 2011 3:33PM
avatar

Japan had a huge earthquake last week and our market has recouped all of it's losses.

What power doth Bernacke and Goldman Sachs possess they they can match Mother Nature

 

And the new job losses were only 382,000, holy cow......all is well.

Time to end QE2 easing,

 

And on a day with durable goods orders going bad, oil over $106 barrel, what power doth Bernacke and Goldman Sachs again possess that they can overcome the forces of logic and reason.

 

Next, Bernacke and Goldman Sachs will hopefully overcome the very power of gravity and fly off to another universe  

Mar 24, 2011 4:44PM
avatar

Inflation in food, gas, commodities, health care, transportation, and higher education.

 

Deflation in home values and salaries.

 

If these trends continue, there won't be much of a middle class in a few years.

Mar 24, 2011 3:49PM
avatar

One week ago, Japan had a giant earthquake that devastated their land.  But with divine power, Bernacke and Goldman Sachs were able to put the US stock market right back to where it was before the earthquake.

 

Fighting in Libya has set oil prices to over $106 a barrel, causing hardship on many lower income workers who commute to work, and threatened the economy.  But with ominous power,  Bernacke and Goldman Sachs were able to put the US stock market right back to when gas prices were less than $90 per barrel

 

We can only hope that Bernacke and Goldman Sachs will be able to conquer the forces of physics and gravity, allowing them to float off our planet into another solar system.  We will then be able to watch thru our giant telescopes as Bernacke prints money to pump up the economy on his new planet in a solar system hopefully far far away.  Will there be bail-outs for bankers on this new planet?  Keep looking up at the sky to a planet far far away with hyper-inflation.    

Mar 24, 2011 2:13PM
avatar
Hurry hurry step right up to the Feds "shell game" plenty of seats left for all the suckers, I mean people to put all their money into the game so they can lose it once more...hurry hurry....
Mar 24, 2011 5:11PM
avatar
Can lead article back up the absurd claim that theres hiring because jobless claims fall how about people booted off after exhausting benefits or not qualifying because your part time or several part times that dried up. The suckers are still pouring their life into markets and will cry w/cra**** a house of cards. The markets value is by money buying stock not increase of stock value in product and productivity more like a ponzi.
Mar 24, 2011 4:35PM
avatar
All is well on Wall Street until it's bubble blows just like the housing market did. Another stock market crash like in 1929 is on the way, only this one will be much worse. The worst part is that everyone can clearly see this but prefer to pretend it won't ever happen to them in their fantasy worlds. Greed trumps all! Sick
Mar 25, 2011 1:49AM
avatar

so when is wall street and helicopter ben going to use portugal for their mistakes(QE4,5 & 6) or will the market friday finally give in to it??

 

Updated 5 hours ago

On the day that EU leaders presented what they hoped was the final version of their plan to solve the region's debt troubles, their summit in Brussels was overwhelmed by debate over Portugal's political crisis. The meeting, which concluded early Friday ...http://www.msnbc.msn.com/id/42253188

Updated 5 hours ago

Portugal's economic future look increasingly bleak as political paralysis, a grinding debt burden and a double-dip recession pushed it one step away from becoming the third eurozone country to take a bailout. The country's woes quickly piled up on Thursday ...http://www.msnbc.msn.com/id/42243506

Mar 25, 2011 12:06AM
avatar
Never gamble more than you can afford to lose. The market is running on emotion and a desire to act like all is well and we are still making money. The sad thing is the treasury is making money and the markets value reflects the perceived loss of value of a dollar. It's a game of musical chairs and when the music stops, will your seat be gone?
Mar 25, 2011 10:12AM
avatar
Another great day in the U.S.A.  I bet this is a disaster for all you Doom and Gloomers. Japan is getting their situation under control, Middle East is crying for Democracy, and a beautiful new war has begun which is pushing up the prices of the commodities I have invested in. My pockets are getting fatter with every shot fired in the Middle East. Great to be me sucks to be you. Gotta love this Neo American way. 
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