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
Charley BlaineUpdated: 6:30 p.m. ET

Stocks 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)










 

158Comments
Jun 29, 2012 2:18PM
avatar

Spending will remain tight until the middle class has some disposable income. Obamacare isnt the answer either. Here is what Donald Trump said about it.

 

Let me get this straight . . . …
We’re going to be “gifted” with a health care Plan we are forced to purchase and fined if we don’t,
Which purportedly covers at least ten million more people,
without adding a single new doctor,
but provides for 16,000 new IRS agents,
written by a committee whose chairman says he doesn’t understand it,
passed by a Congress that didn’t read it but exempted themselves from it,
and signed by a President who smokes,
with funding administered by a treasury chief who didn’t pay his taxes,
for which we’ll be taxed for four years before any benefits take effect,
by a government which has already bankrupted Social Security and Medicare,
all to be overseen by a surgeon general who is obese,
and financed by a country that’s broke!!!!!
What the hell could possibly go wrong?

Jun 29, 2012 1:39PM
avatar

You remember the ole saying...If you put the federal government in charge of the Sahara Desert....within 3 years there will be a shortage of....SAND

 

What has the American government ever ran with any efficacy?

 

I can't think of much.

 

Than please, can an American...any American tell me....... why in the world would you want the federal government to run your health care......really....why?   Are you really that stupid?

 

Jun 29, 2012 2:28PM
avatar
This is SO STUPID..... Stocks were a disaster with Greece, Greece decide to stay with the Euro, Stocks go up... OH WAIT, Europe as a whole is STILL a mess, stocks go down, Europe decides that they have a plan, stocks go WAY up............BUT.......... WAIT FOR IT......... WAIT FOR IT..........  Yup just as the article stated, it's going to take WEEKS before anything is finalized as in, where is the money going to come from?, will it be paid back?, will it be considered a total loss? and WILL IT ACTUALLY WORK?.. you can save the banks all day but if the people are struggling and the people of Europe are still not able to make big purchases and no jobs than what is the point ? they are still going to be in the crapper........ OH and lets not mention how oil JUMPED 6 bucks a barrel today.... based on what???? strong demand??? WRONG demand is still weak, increase in Chinas economy and U.S. economy??? WRONG both economies are still weak..... so why the 6 dollar jump?
Jun 29, 2012 2:38PM
avatar

Can you tell me just why the f*** the price of oil goes up over $5 just on the news that banks in Europe are going to get bailed out?

 

Has the demand in China increased, no.  Has the demand in Europe increased, no.  Has the demand in North America increased, no.  Has the demand increased anywhere, no.  Have supplies dwindled to nothing worldwide, no.  The sluggish economies, the lower demand for products, the stagnant wages, the high unemployment, everything that brought the price of oil down is still there. 

 

Wait for it, $100 barrel of oil is now going to cost $6/gallon at the pumps.

Jun 29, 2012 2:29PM
avatar

200+ points on the last day of the quarter?  Please.  Yes Europe made it easier for its dregs to borrow more money but nothing was fixed.  It just became a "Banker Thing" now, the sovereigns don't have to be in the middle of the loans.  It makes me feel better to know that the bankers have it under control now. 

 

Today is just another computer driven run up using QE money.  The institutions get to finish the quarter up and maybe get a little something in their stocking.  It will all get dumped next week. It's easy to manipulate things when the players have gotten so big. 

 

It makes you think...if the market can go up 200 points just because the system didn't collapse,  think what would happen if something actually got fixed.  It sounds counterintuitive but I suspect you actually get more market upside with things the way they are right now....in fantasyland.  The market used to be about corporations raising capital to expand.  Now it's just speculation by institutions that can't fail. If I knew I couldn't fail I would be at the casino right now too.  

Jun 29, 2012 1:29PM
avatar
Europe and Americas debt crisis - either pay down the debt or bankruptcy. This political and economic maneuvering is just lying to ourselves.
Jun 29, 2012 3:50PM
avatar
It is so nice to see the oil speculators back to normal. Crude oil going up $7 a barrel is a joke. This is completely unjustified as there are no basic fundamentals to support it except Greed. This is Wall Street BS at it's best. If they keep pushing, maybe they can put us in a depression next time. These speculators are a big part of the problem why our economy is in such a bad current state. If oil futures trading is not addressed by Congress, this economy will not be going anywhere because Greed will once again control the game. Make these clowns take full physical delivery of all of the oil futures that they are buying ahead so they will have to pay storage fees, etc. and then see how many millions they buy ahead.
Jun 29, 2012 4:36PM
avatar

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 1:23PM
avatar

Quote

BRUSSELS (Reuters) - Under pressure to prevent a catastrophic breakup of their single currency, euro zone leaders agreed on Friday to let their rescue fund inject aid directly into stricken banks from next year and intervene on bond markets to support troubled member states.

End Quote

 

Read as the ECB is going to ignore it's own law that states it can not create monies out of thin air and start to print fake monies to give to the banks so the bank executives can steal it again and put it into their Swiss bank accounts and wait for the western economic system to totally collaspe.

 

Money for nothing folks get it while the ECB is printing it.

Jun 29, 2012 3:37PM
avatar

Let me see if I got this right.  Countries that can't pay their debts and haven't been able to pay them for years are now creating even greater amounts of debt that they won't be able to pay off has people investing in the market.

 

If it wasn't one of the most asinine things I've ever seen, it would be funny.

Jun 29, 2012 3:54PM
avatar

Oil shoots up on BOGUS BS as usual just in time for the Fourth of July holiday............GO FIGURE!!! Gas is sure to follow.

 

Why people seem to keep thinking that the AMERICAN government is for the AMERICAN people is beyond me........ but to each his own!!!!!

 

The fact of the matter is that there is no fact of the matter and this is not by accident!!

Jun 29, 2012 2:25PM
avatar

Good riddance Obama and democrats and good riddance to socialist Europe!

 

There is not a stock, bond or treasury note on this earth that is worth the paper it's written on!

Jun 29, 2012 3:06PM
avatar
Tomorrow....Stocks slide on beliefs that debt deal will not work.
Jun 29, 2012 2:47PM
avatar

So the EU tells Ireland, Portugal and Greece they will still have harsh Austerity and the Troika will constantly review their financial progress.

 

Spain and Italy are told their people will not receive harsh austerity for their bailout funds and there will be no Troika reviewing their economy.

 

Spain, Italy and France get together and decide Germany should cover all the bills. Yup, this is going to work out really well, problem solved.

 

Also, can someone tell me why a Russian word (Troika) is being used to define the EU and its members? Why not one of the many EU languages?

Jun 29, 2012 3:07PM
avatar
I sure with someone was there to recapitalize my bank account when I go off and make extremely bad decisions that wipe me out.  Sure seems like a good deal to me.
Jun 29, 2012 1:55PM
avatar

Come on , keep talken about everything else!!!!  this way they will forget the talk about insider trading!!!!!!!!! like who is involved an how much has been made by congress men an women on both sides!!!!!  neither one wants it talked about since they said it was against their princibles to take unfare advantage of the AMERICAN PUBLIC!!!!!!!!!!  DEMAND FUL DISCLOSER ON ALL ACCOUNTS HELD BY THEM an  FAMILY INCLUDED.

Jun 29, 2012 2:53PM
avatar
I don't think their is a person on this planet that really and truly understands the global economy. I think the "experts" see a big rise in the Dow and say...lets see what happened today...then they come up with something that may or may not have had anything to do with it. Everything is prefaced with "unexpected rise" or "unexpected fall". The "experts" are about as accurate as weather forecasts'!
Jun 29, 2012 4:35PM
avatar
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!

Jun 29, 2012 1:55PM
avatar
So where is Europe getting this money?
How will it be paid back,if ever,most likely kicked down the street economics learned from the good old U.S.A., and still kicking!

Jun 29, 2012 5:13PM
avatar
Oil up?  Isn't this price gouging?  Was there that many shares sold that would justify such a jump?  I think the SEC should look into this.
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