Dow jumps 278, has best month since October
Stocks soar -- as the blue chips enjoy their best June since 1999 -- after European leaders move to stabilize their banks. Apple and chip makers boost techs, but Research In Motion shares slump badly. Ford and Nike warn on European sales.
By Charley Blaine Jun 29, 2012 12:56PM
Updated: 6:30 p.m. ETStocks soared today, and the Dow Jones Industrial Average ($INDU) had its best monthly performance since October, after European leaders agreed to use the continent’s bailout funds to recapitalize struggling banks directly.
The goal of the decision is to prevent runs on banks in Spain, Italy and Greece that could destabilize Europe's fragile bank system. But the details still must be worked out, a process that may take weeks and could lead to more market volatility.
The Dow shot up 278 points, its best one-day gain since June 6. The Standard & Poor's 500 Index ($INX) had its best day since Dec. 20, and the Nasdaq Composite Index ($COMPX) finished with its biggest one-day performance since Nov. 30. Crude oil (-CL) jumped nearly to $85 a barrel, its biggest one-day jump in 16 months. The Dow finished up 3.93% in June.
The European news offset a University of Michigan report that consumers are gloomy about the economy, but the report of the Chicago Purchasing Managers suggested manufacturing is stabilizing. The market rally came despite steep losses in shares of Research In Motion (RIMM) and Nike (NKE) over earnings disappointments. Ford Motor (F) fell after warning that its European business would show a sizable loss for the second quarter.
The Dow's big gain took the blue-chip index to 12,880. The S&P 500 gained 33 points to 1,362, and the Nasdaq jumped 86 points to 2,935. The indexes had their highest closes since May 8.
Article continues below.
The Nasdaq-100 Index ($NDX) gained 79 points to 2,616, primarily due to strength in Apple (AAPL), Oracle (ORCL), Microsoft (MSFT), Intel (INTC) and Google (GOOG). (Microsoft publishes MSN Money.)
A whopping 89 stocks hit all-time highs today, including Costco Wholesale (COST), Walt Disney (DIS), Hershey Foods (HSY), Boston Beer (SAM) and WD-40 (WDFC).
In addition to the Dow's June performance, the S&P 500 climbed 4% in its best monthly performance since February. The Nasdaq's 3.8% gain was its best since March. The Nasdaq-100 had a up 3.6% gain, its best since March.
It was the best June for the Dow and S&P 500 since 1999 and the best for the Nasdaq since 2000.
Stocks, however, did end the second quarter lower. The Dow fell back 2.5%, with the S&P 500 down 3.3% and the Nasdaq and Nasdaq-100 both down 5.1%.
But the market for the year is still well in the black. The Dow is up 5.4% for 2012, with the S&P 500 up 8.3% and the Nasdaq up 12.7%. The Nasdaq-100 remains up 14.8%.
The week ahead is broken up by the July 4 holiday on Wednesday, when markets will be closed; they will close early on Tuesday. The big event of the week comes Friday with the June payroll and unemployment report.
Health stocks rise -- except health insurers
In the wake of the Supreme Court decision on the Affordable Health Care Act, 45 of the 52 stocks in the health care sector of the S&P 500 were higher.
The Health Care Select SPDR (XLV) exchange-traded fund, which tracks the sector, was up 78 cents to $38.01.
The one group that faltered: healh insurers. Wellpoint (WLP) was the hardest hit, down $2.11 to $63.79, followed by Aetna (AET), down $1.08 to $38.77.
The leaders were Cerner (CERN), which builds medical-information systems, up $4.63 to $82.66, and Agilent Technologies (A), which makes technical instruments, up $1.62 to $39.24.
| Markets for the week | ||||||||||||
| 6/29/2012 | 6/15/2012 | % chg. | YTD chg. | |||||||||
| Dow Industrials | 12,880.09 | 12,640.78 | 1.89% | 5.42% | ||||||||
| S&P 500 | 1,362.16 | 1,335.02 | 2.03% | 8.31% | ||||||||
| Nasdaq | 2,935.05 | 2,892.42 | 1.47% | 12.66% | ||||||||
| Russell 2000 | 798.49 | 775.16 | 3.01% | 7.77% | ||||||||
| Crude oil | $84.96 | $79.76 | 6.52% | -14.03% | ||||||||
| (per barrel) | 0.00 | 0.00 | 0.00% | 0.00% | ||||||||
| U.S. Dollar Index | 81.75 | 82.44 | -0.84% | 1.53% | ||||||||
| 10-yr. Treasury | 1.66% | 1.67% | -0.78% | -11.33% | ||||||||
| Gold | $1,597.70 | 1,566.90 | 2.38% | 2.39% | ||||||||
Crude oil and gold jump
Light sweet crude oil in New York settled up $7.27 to $84.96 a barrel. Brent crude had gained $6.44 to $97.80.
The national average price of gasoline fell to $3.353 a gallon from Thursday's $3.369, AAA's Daily Fuel Gauge Report said. The price is down 2.9% this week and 14.8% since peaking in early early. But the average price is still up 2.4% for the year.
Crude oil was up 6.5% for the week. Retail gasoline was off 2.9%.
Gold (-GC) rose $53.80 to $1,604.20 an ounce. Silver (-SI) for September delivery settled up $1.321 to $27.612 an ounce. Copper (-HG) for September delivery settled up 16.5 cents to $3.4965 a pound.
For the week, gold was up 2%, with silver up 3.6% and copper up 5.8%.
Interest rates were higher, with the 10-year Treasury yield at 1.659% from Thursday's 1.577%. The dollar was lower against major currencies, especially the euro.
| Energy prices -- New York close | ||||||||||||
| Fri. | Thur. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $84.96 | $77.69 | -1.81% | -14.03% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $2.7099 | $2.5472 | 0.25% | -7.01% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.824 | $2.722 | 16.60% | -5.52% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.6318 | $2.4773 | -3.34% | -0.96% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $97.80 | $91.36 | -4.00% | -8.92% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.3530 | $3.3690 | -7.38% | 2.35% | ||||||||
| (per gallon; AAA) | ||||||||||||
Europe moves to shore up its banks
The decision, by leaders of the 17-nation eurozone, would allow help to banks without adding directly to the sovereign debt of countries. That's been a problem for Spain and potentially for Italy. The deal also calls for a single regulator to watch over European banks.
Both countries have seen rates on their debt rise to levels that would be unsustainable in the long term, and the Italian and Spanish prime ministers, Mario Monti and Mariano Rajoy, pleaded for help with colleagues at the summit, held in Brussels.
The markets gave them some help. The yield on the Spanish 10-year bond fell to 6.329% after peaking at 7.26% on June 18. The Italian 10-year yield fell to 5.819%. It had peaked at 6.22% on June 13. Moreover, stocks in Europe rallied strongly on the news. Italian stocks were up more than 6%; Spanish stocks gained more than 5%.
There are lots and lots of questions about the aid plan and the plan for a single banking regulator for the continent. Presumably, it would include a standardized form of deposit insurance to prevent capital flight.
And there's always the chance that the deal will fall apart or investors will decide it's talk without substance.
Energy and financial stocks lead the market
Industrial and technology stocks led the market rally. United Technologies (UTX), up $2.93 to $75.53, and Boeing (BA), up $2.72 to $74.30, were the third- and fifth-best performers among the 30 Dow stocks after Bank of America (BAC), whose shares jumped 44 cents to $8.18 -- its first close above $8 since June 2.
Networking stocks were the strength in technology shares, with F5 Networks (FFIV) up $6.20 to $99.56. Cisco Systems (CSCO), up 69 cents to $17.17, was the second-best Dow performer.
Apple was up $14.95 to $584, adding nearly 12 points to the Nasdaq-100's gain by itself.
In addition, energy shares jumped on optimism for a rebound in Europe, and financial stocks rallied in hopes that the rescue effort in Europe would stabilize the global banking system.
Citigroup (C) was up $1.02 to $27.41, but JPMorgan Chase (JPM) was off 15 cents to $35.73 -- the only Dow stock with a loss.
Could Research In Motion fail?
Research In Motion shares were off $1.74 to $7.39, their lowest close since Dec. 16, 2003, after showing a larger-than-expected loss for the fiscal first quarter. The company also said it is delaying the introduction of its BlackBerry 10 device until next year and laying off 5,000 workers, about 30% of its workforce.
Analysts cut their price targets on the stock, and some predicted the company could run out of cash and possibly fail.
The stock is down 95% since peaking at $138.87 in May 2008.
Nike shares are slammed
Nike shares were down $9.11 to $87.78 after the company reported lower-than-expected earnings for the fourth quarter and cut guidance as well. The company blamed an economic slowdown in Europe, which represents about 25% of sales, and sees sales growth declining in China.
Higher costs for labor and marketing, especially in conjunction with the London Olympics, have pinched margins.
The stock is down 20.3% since peaking at $110.14 on May 3.
Ford sees weakening sales in Europe, Asia
Ford said late Thursday it expects a decline in second-quarter profit as a result of significant losses outside of North America.
Shares were down 50 cents to $9.59, their lowest level since Oct. 3.
Ford said second-quarter pretax losses in its Asian, South American and European regions could reach about $570 million, three times more than the $190 million it lost in those operations in its first quarter.
The company does expect to be profitable overall in the quarter thanks to strong results in North America and its Ford Credit lending business.
| Short hits from the markets -- New York close | ||||||||||||
| Fri. | Thur. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0800% | 0.080% | 14.29% | 700.00% | ||||||||
| 5-year Treasury note | 0.729% | 0.693% | 8.64% | -12.17% | ||||||||
| 10-year Treasury note | 1.659% | 1.577% | 4.93% | -11.33% | ||||||||
| 30-year Treasury bond | 2.763% | 2.666% | 3.41% | -4.36% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 81.753 | 83.007 | -1.66% | 1.53% | ||||||||
| British pound | 1.5716 | 1.5521 | 1.96% | 1.15% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.636 | £0.644 | -1.93% | -1.13% | ||||||||
| Euro in dollars | $1.27 | $1.24 | 2.50% | -2.22% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.789 | € 0.803 | -2.44% | 2.27% | ||||||||
| U.S. $ in yen | 80.00 | 79.42 | 1.84% | 3.76% | ||||||||
| U.S. $ in Chinese | 6.38 | 6.35 | -0.09% | 0.78% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.984 | $0.968 | 1.56% | 0.26% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.018 | $1.033 | -1.54% | -0.25% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,604.20 | $1,550.40 | 2.56% | 2.39% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.497 | $3.332 | 3.89% | 1.76% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $27.6120 | $26.2910 | -0.52% | -1.09% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $7.5725 | $7.4600 | 17.63% | 16.01% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $6.3475 | $6.323 | 14.32% | -1.82% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.7133 | $0.6951 | -0.31% | -22.20% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.7070 | 1.6305 | 4.76% | -25.67% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $84.96 | $77.69 | -1.81% | -14.03% | ||||||||
| (per barrel) | ||||||||||||
164Comments
Jun 29, 2012 5:08PM
longbeach -
what? are you four years old?
Obama is the best moderate republican president we have had since Reagan.
You have to stop being spoon fed news by FOX and MSNBC and start thinking for yourself.
You may need to use words bigger that 4 letters to get the job done, but then four letter words are all politics are capable of communicating.
Jun 29, 2012 5:08PM
Jun 29, 2012 5:07PM
Jun 29, 2012 5:05PM
Jun 29, 2012 5:04PM
We told you this morning the reason we were up today and fortunately it held till the close. Sooner or later people will realize that the biggest tax hikes in American history are coming and it will not be pretty on Wall Street....Oh well, if things go as hoped and President Romney takes over, be prepared for many more days like today. Several event next week, including the jobs report and as we all know, Obummer and his cronies are clueless about job creation. Have a great weekend all.
Jun 29, 2012 4:58PM
Jun 29, 2012 4:58PM
Jun 29, 2012 4:56PM
Jun 29, 2012 4:52PM
Jun 29, 2012 4:49PM
No surprises hear this move was meant to fake out, clobber and kill the shorts out of business and steel their money. The truth is the can is being kinked down the road on hopes with this move but this new announcement honeymoon will last for another 2 months. The Germans had to give in because the Germans see the coming "Recession" and if they did nothing every one would point the finger at them....and the Germans do not want to be the scapegoat .....but the underlying stability problems are all their and will not go away. Debts begets more debts..! Do not be fool..!!!
Jun 29, 2012 4:47PM
Obama was taken a vocabulary test when he was asked to find 2 positive words finishing by the four letters ican.........he asked Michelle and together they couldn't....so here are the words:
American...........ICAN
Republican.......ICAN
When asked what the word Democrat would signify, then again he wouldn't know, so here you go:
Democrats.......RATS
Don't forget that November is the rodent's removal month....go vote.
Jun 29, 2012 4:36PM
An Arab enters a taxi..........
Once he is seated he asks the cab driver to turn off the radio because he must not hear music,
as decreed by his religion and, in the time of the prophet, there was no music, especially
Western music which is music of the infidel's and certainly no radio ........
So the cab driver politely switches off the radio, stops the cab and opens the back door.
The Arab asks him: "What are you doing man?"
The cabby answers: "In the time of the prophet there were no taxis.
So get out and wait for a camel."
PRICELESS
Jun 29, 2012 4:35PM
Speculators jump the price of crude over 9%??? Crude was down 20% for the year, but retail gas is still up 3% for the year? I bet the price for a gallon jumps 20 cents a gallon in the net 3 days because of these BS speculators...we pay for their profit taking on pure speculation, nothing more.
What a joke!!!!!! The system needs to be fixed!
What a joke!!!!!! The system needs to be fixed!
Jun 29, 2012 4:27PM
Jun 29, 2012 4:21PM
Jun 29, 2012 4:17PM
On certain issues, we all have a "litmus test" that decides the issue for us. Here is mine on the health care act-the provision that a child can stay on their parents health insurance until they are 26. My son is 18 and will be going off to college in the Fall. I can pay the college extra and he would be on their "health plan". The college health plan is an on campus clinic open Monday thru Friday from 9-5. No hopital, no in depth health coverage. My son is the most important thing in the world to me. His health and well being are part of this. Instead of paying extra top be on some joke of a health plan, I can keep him on mine. It is not easy finding your first job out of college that includes health care so this also helps protect him until he is 26 and theoretically on his way with his career. I fully support the health care bill despite some of its flaws. Someone try to tell me, in my situation, why I should oppose it? Please dont say the if Romney is elected he will repeal and replace it with one that includes this provision. There is no guarentee of that...I will not take that chance. My son means too much to me. This is not only a litmus test for me on health care but also on who to vote for President...again, try to argue otherwise for soemone in my position...
Jun 29, 2012 4:11PM
Jun 29, 2012 4:08PM
Jun 29, 2012 4:06PM
Colleges and universities are going to have to create a new economic class called "Print Your Way To Prosperity". Traditional balance sheets, income statements etc. no longer matter in the "New World Order". I hear Africa has ordered 10 new money printing machines so they will be the next rich country. What a sham and our gov not only supports it.....it endorses it!!
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