Dow up 69 as energy, financial stocks gain

Cliffs Natural Resources, Alcoa and Bank of America are among the leaders. Crude oil tops $97. A German court rules Wednesday on whether Germany can participate in a eurozone rescue fund. Luxury retailers take a hit.

By Charley Blaine Sep 11, 2012 12:36PM
Charley BlaineUpdated: 6:23 p.m. ET

Stocks finished higher today but were off their highs as weakness in technology stocks offset gains in energy and financial shares. The rally came in advance of a key German court ruling on the European debt crisis and a two-day meeting of the Federal Reserve.

A falling dollar helped the rally, pushing energy and metals prices higher. Coal-miner Alpha Natural Resources (ANR) and iron-ore producer Cliffs Natural Resources (CLF) were the second- and third-best performers in the Standard & Poor's 500 Index ($INX). Also higher: Caterpillar (CAT) and Chevron (CVX).

The dollar fell in part because Moody's warned it expects to cut the nation's debt rating from Aaa to Aa1 in 2013 without some progress on reining in the U.S. deficit. It also fell against the euro by the possibility the Fed will start a new stimulus program.

The market's overall gains came despite light trading and depressed prices in luxury retailer stocks after Britain's Burberry (BURBY) said sales were slowing and profits would be at the low end of expectations. Ralph Lauren (RL) was the second-weakest S&P 500 performer. Tiffany (TIF), Coach (COH), Nordstrom (JWN) and Michael Kors (KORS) were lower.

The Dow Jones industrials ($INDU) closed up 69 points to 13,323. The blue chips had briefly been up as many as 100 points. The S&P 500 added 4 points to 1,434. The closes were their best in nearly five years. The Nasdaq Composite Index ($COMPX) clawed its way to a 1-point gain at 3,105.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was down 3 points to 2,785. Apple (AAPL), the biggest influence on the index, was off $2.15 to $660.59 after rising to as high as $670.10. Apple is expected to unveil its new iPhone 5 at a Wednesday event in San Francisco.

The Dow's finish undid its 52-point loss on Monday and was its best since Dec. 28, 2007. The S&P 500 is just below Friday's close of 1,438, its best close since Jan. 3, 2008. The Nasdaq's Friday close of 3,136 was its best since November 2000.

Traders on exchanges in New York halted their activities for a moment of silence to commemorate the 11th anniversary of the Sept. 11, 2011, terror attacks.

Futures trading suggests a flat open for stocks on Wednesday.

Texas Instruments
(TXN) offered middling guidance for the third quarter. The company projected $3.27 billion to $3.42 billion in revenue. The company had earlier projected $3.47 billion in revenue. Earnings per share tightened to 38 cents to 42 cents from 34 cents to 42 cents.

A pretty good day for Facebook
Facebook (FB) shares were up 62 cents to $19.43. It was up an additional 64 cents after hours, hitting $20.07. If that price holds on Wednesday, it will be its first close above $20 since Aug. 20's $20.01.

CEO Mark Zuckerberg cheered investors at today's TechCrunch conference in San Francisco when he insisted the company is making a big push to make its mobile site work better and generate revenue and profits.

The shares have lost about half their value since the company went public in May, and Zuckerberg conceded, "The performance of the stock has obviously been disappointing."

But he insisted making mobile work financially is coming.

Bank of America, Alcoa, AMD have big days
Twenty-four of the 30 Dow stocks were higher, led by Bank of America (BAC), Alcoa (AA) and Hewlett-Packard (HPQ).

Meanwhile, 321 S&P 500 stocks were higher, led by Advanced Micro Devices (AMD), Alpha Natural Resources and Cliffs Natural Resources. The laggards were Sprint-Nextel (S), Ralph Lauren and Rockwell Automation (ROK).

Green Mountain Coffee Roasters (GMCR) was the Nasdaq-100 leader for the second day in a row, up $1.80 to $32.16. The stock is up 15.6% this week after climbing 14.5% last week.

Second was Research In Motion (RIMM). Dollar Tree (DLTR) and Whole Foods Market (WFM) were the laggards.

Morgan Stanley, Citigroup cut a deal
Morgan Stanley (MS) and Citigroup (C) shares were up 64 cents to $17.25  and 83 cents to $32.66, respectively. The two banking giants agreed on a price at which Morgan Stanley can buy Citigroup's 49% stake in the Smith Barney brokerage business: $13.5 billion, less than what Citigroup wanted and more than Morgan Stanley originally offered.

Citigroup will take a $2.9 billion noncash charge against earnings in the third quarter. Morgan Stanley will buy out Citi in two pieces. One purchase, coming now, will cut Citigroup's holdings to 35%. Morgan Stanley will buy that stake out  by June 1, 2015.

Smith Barney is the nation's largest brokerage.
 
McDonald's (MCD) shares were down 10 cents to $91.20. Same-store sales in August were up 3.7% from a year ago, with the strongest growth coming from its Asia Pacific-Middle East-Africa region.

Energy prices -- New York close (Updated)



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$97.17

$96.54

0.73%

-1.68%
(per barrel)











Heating oil (-HO)

$3.1857

$3.1668

0.17%

9.32%
(per gallon)











Natural gas (-NG)

$2.9920

$2.8120

6.90%

0.10%
(per mil. BTU)











Unleaded gasoline (-RB)

$3.0435

$3.0240

2.38%

14.53%
(per gallon)











Brent crude 

$115.10

$114.81

0.46%

7.19%
(per barrel)











Retail gasoline

$3.8430

$3.8280

0.37%

17.31%
(per gallon; AAA)












Crude and gold move higher
Light  sweet crude oil
(-CL) pushed as high as $97.31 a barrel today before settling at $97.17, up 63 cents. It was crude's first close above $97 since Aug. 22. Brent crude settled up 59 cents to $115.40 a barrel.

The national average price of gasoline hit $3.843 a gallon, according to according to AAA's Daily Fuel Gauge Report, up from $3.828 on Monday.

Gold (-GC) settled up $3.10 to $1,734.90 an ounce. Copper (-HG) was up 85 cents to $3.697 a pound.

But silver (-SI) was off 6.7 cents to $33.566 an ounce.

Moody's warns; bond markets mostly ignore
While the Moody's warning about a downgrade was getting a lot of attention, the practical effect was minimal. Yes, the dollar was lower, but the bond market was little changed.

The 10-year Treasury yield was up slightly to 1.695% from Monday's 1.683%. A $32 billion auction of three-year notes produced a low yield of 0.337%. The bid-to-cover ratio, a measure of investor demand, was 3.94, compared with a recent average of 3.51. That means there were $3.94 in bids for every dollar auctioned.

Moreover, Paul Dales, senior U.S. economist for Capital Economics, noted that the Moody's warning was about a situation that's hardly a secret. And besides, Standard & Poor's downgraded U.S. debt a year ago with only a short-term effect on markets.

Two big decisions are ahead
The rally comes a day before Germany’s Federal Constitutional Court rules on whether that nation can participate in the European Stability Mechanism, a 500-billion-euro fund ($640 million U.S.) designed to help out the finances of eurozone members.

Critics charge that the treaty behind the ESM robs Germany’s parliament of its constitutional authority over the country’s budget.

The court is expected to approve Germany's participation, but, Reuters reports, legal experts believe it will impose tough conditions limiting Berlin's flexibility on future rescues. A more stringent ruling could be seen as a negative by markets.

The ruling is expected at 10 a.m. German time, or 4 a.m. ET.

Meanwhile, the Federal Reserve's policy-making body will start a two-day meeting, and markets are betting that the Federal Open Market Committee will announce a new economic stimulus plan Thursday afternoon.

A touch more optimism from small business
The NFIB small business optimism index rose from 91.2 in July to 92.9 in August, higher than the 91.4 consensus. High Frequency Economics had forecast 92.5. The index averaged 93.5 in the first half of this year and 91.4 in 2011.

The rise included a 5-point jump in the net percentage of companies planning to increase employment, from 5% to 10%, a new high for the cycle. Also contributing were the share of companies with hard-to-fill job openings (up to 18% from 15%), relative improvement in the share expecting the economy to improve (to a net -2% from -8%), and the net share planning to increase capital spending (to 24% from 21%).

The latest data from the Institute for Supply Management and NFIB suggest momentum is more up than down, Jim O'Sullivan, High Frequency's chief economist, wrote clients today.

"Of course, slightly better does not mean good. The trend still looks weak enough to encourage the Fed to ease again this week."

Short hits from the markets -- New York close (Updated)



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.100%

11.11%

900.00%
5-year Treasury note 

0.663%

0.657%

11.24%

-20.12%
10-year Treasury note

1.695%

1.683%

8.51%

-9.41%
30-year Treasury bond

2.846%

2.842%

6.04%

-1.49%
Currencies











U.S. Dollar Index

79.836

80.343

-1.70%

-0.85%
British pound

1.6075

1.5992

1.17%

3.46%
(in U.S. $)

 








U.S. $ in pounds

£0.622

£0.625

-1.16%

-3.34%
Euro in dollars

$1.29

$1.28

2.11%

-0.73%
(in U.S. $)

 








U.S. $ in euros

€ 0.778

€ 0.784

-2.07%

0.74%
U.S. $ in yen 

77.88

78.27

-0.78%

1.01%
U.S. $ in Chinese

6.36

6.33

-0.11%

0.49%
yuan











Canada dollar

$1.028

$1.024

1.35%

4.78%
(in U.S. $)

 








U.S. dollar 

$0.974

$0.977

-1.33%

-4.57%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,734.90

$1,731.80

2.80%

10.73%
(per troy ounce)

 








Copper (-HG)

$3.697

$3.689

6.94%

7.60%
(per pound)

 








Silver (-SI)

$33.566

$33.6330

6.76%

20.24%
(per troy ounce)

 








Wheat (-ZW)

$8.8375

$8.8975

-0.65%

35.39%
(per bushel)

 








Corn (-ZC)

$7.7775

$7.833

-2.75%

20.30%
(per bushel)

 








Cotton 

$0.7493

0.7563

-3.02%

-18.27%
(per pound)

 








Coffee

$1.7755

1.7365

7.77%

-22.69%
(per pound)

 








Crude oil (-CL)

$97.17

$96.54

0.73%

-1.68%
(per barrel)










 

244Comments
Sep 11, 2012 1:55PM
avatar

Lost on Earth

 

Clinton & Congress passed the Banking Reform legislation that forced the banking industry to take the bad loans for poor people with almost no credit to get housing loans. This started the biggest

mortgage bubble in history.  George Bush tried to pass legislation to rein this in when it was apparent what was going to happen and the Congress killed the bill.

 

So don't cry about how Bush caused the financial mess the Democrats were at the front of the line on this.

Sep 11, 2012 12:58PM
avatar
The undercurrent of thought is glaring to anyone reading these daily comments: distrust, dissatisfaction, frustration, sometimes even hopelessness. If this represents any kind of random sampling of what's out there, and I think it does, they'd better beware.
Sep 11, 2012 12:53PM
avatar
Fraud Street with another rally waiting for Helicopter Ben to save the day ! This market does not represent the small American investors it only cares about itself and HFT at the top tranches and dark pools !  We have no Faith or Confidence in this market as it is Stealing us Blind !!
Sep 11, 2012 2:43PM
avatar

"The dollar fell after Moody's warned it expects to cut the nation's debt rating from Aaa to Aa1 in 2013 without some progress on reining in the U.S. deficit."

 

And yet our ENTIRE Congress screws around, pointing fingers, and exascerbating the problem with more spending. Yeah, our government *really* represents the American public. They should all be tried for treason!

Sep 11, 2012 1:06PM
avatar
If you read the headers, there is no good reason for Bernanke to agree to more QE. Even if he uses the excuse that it's "stimuli" he would be hard-pressed to explain exactly what he would be trying to stimulate. Economy? He has no way. Falsely pumped stocks-- he can try, but, where do you go once you've screwed the world? If he emerged and reset the Bank Rate at 12%, he'd be doing more good than harm because it topples fake platforms. If you know you need to cultivate job recovery... you mow the weeds and bring financial wrangling to it's knees.

Close the banks. End the Federal Reserve. Get rid of Wall Street. If we aren't 100% invested in job recovery, we won't be here by the New Year.

Sep 11, 2012 2:32PM
avatar

Couple of questions for you: if your favorite football team went to the superbowl, and the following  year went to last place; and during that year a new coach took over and for the next three years, the team progressively got worse and dropped to last place; by the fourth year, the team still in last place, would you want a new head coach?

 

If you were a stockholder in a large corporation and the corporation had four consecutive years of losses, would you want to replace the CEO?

 

Just asking.

Sep 11, 2012 2:24PM
avatar
Libtard hypocrisy of the day.


2007 - Bush is manipulating the oil prices to pay off his oil buddies.

2012 - The President cannot control oil prices.




Sep 11, 2012 2:20PM
avatar
2012 the Democraps promise a green card in every casa.
Sep 11, 2012 2:49PM
avatar
Washington Post - 2012

President Obama is touting his foreign policy experience on the campaign trail, but startling new statistics suggest that national security has not necessarily been the personal priority the president makes it out to be. It turns out that more than half the time, the commander in chief does not attend his daily intelligence meeting. 
Sep 11, 2012 2:51PM
avatar
LostonEarth, the name certainly fits.  Where were you the first four years of Bush?  Times were pretty damn good.  So, I really don't know what you are talking about and I don't think you know either.
Sep 11, 2012 4:20PM
avatar
PCD SAYS:re:this is what i think. the US GOVERMENT is not trying to raise the poor up to the middle class it is lowering the middle class down to the poor.
Sep 11, 2012 2:28PM
avatar
Here we are watching an electorate so bedazzled by entertainment TV, sedated by the veneer of civilized comforts, and seduced by promises physical and financial security from politicians, that they are willing to elect any candidate which keeps their version of this con and fraud going at the expense of INDIVIDUAL liberty.

Today, it is not necessary to fight grand wars for "freedom".  The new battlefront, which is upon us and will not be stopped, is the freedom fight at the local and individual level.  These include:
 -  The freedom not to be medically treated or forced to pay the same for someone else.  This will hasten death (we all will die someday).
 -  The freedom to live better or worse depending on our own actions and luck.  How dead in life and spirit are individuals and a society which lives under a predictable outcome regardless of what they do?  Supporting a guarantee or entitlement always results in an eventual corrective catastrophic collapse.
 -  The freedom to pursue judicial remedies of grievances.  The entire corporate (legal personage) concept has provided legal cover to corporate executives and their agents to effectively (sometimes consciously)  become economic psychopaths.  Government regulation has furthered the dominance of the mega-corporations since they alone have the resources to retain legal staff to morph, manipulate, and lobby this to their advantage.

So -- be aware of what you are choosing when you are fighting over which of two candidates are bringing you two versions of the same loss of liberty.  Why are these two presidential candidates, as desperately as drowning, putting so much into achieving that office?  The answer, which the electorate refuses to acknowledge due to a need to project their own world views, is POWER OVER YOU.

It doesn't matter what happens to you and many times their own families.  Anything else broadcast on media is orchestrated to distract from this fact of this power vector.

Those remaining who wish to truly be alive in life and spirit and are aware of this reality, have been preparing and learning what is required to fight and if necessary die to preserve some remnant of the unique freedom experiment the U.S. had represented.  Most of the rest are doomed to the old backward king - surf paradigm of human history.  There they can relax in the comfort of guaranty at the expense of their individual liberty.  

Sep 11, 2012 4:08PM
avatar
VL,
Yes I agree..we are talking about a different group and I am talking more about early education.......I don't have a college education....but started from scratch several successful  businesses over the years..Built them with good employees, most without college educations..... Survivors we were..... I have been very appreciative  of anyone who has worked for me....that gave me their all.   For that, ..I paid them well, gave them lots of time off for personal and  family, and we all prospered and had fun doing it........Two of my business, I let my employees buy me out and they are stilling going strong, one for over 20 years.....Mostly all with High School Educations..... 

There is nothing more UNCOMMON then COMMONSENSE.....
Sep 11, 2012 2:06PM
avatar
So what is the excuse today for oil prices going up?? It sure is not supply or demand.
Sep 11, 2012 1:10PM
avatar

I hear the train coming round the Wall Street curve, pump    &     dump,   pump  &  dump,  pump  &  dump, pump&dump

Sep 11, 2012 3:18PM
avatar
Yes we are choosing a European path in this country.

An easy example is the abortion debate.

What is the debate about?  Why is their a debate to begin with?

How much government do you want involved at the most personal level?  How far are you willing to go to save the life (form) within or support with others money the choice of the woman?   Do you fathom a day when additional centrally determined criteria are issued from some unelected panel?

Once the door is opened, the control chain is built link by link by pandering politicians and government; generation after generation as the preceding one forgets.  This is the proven course of all programs ever demanded of government.

This issue belongs at the social level.  There are plenty of voluntary (non-violent) pressures and choices their.

Sep 11, 2012 2:04PM
avatar
You can buy a lot of chickens and cars for 22 trillion dollars in lost property values STUPID!!!
Sep 11, 2012 4:04PM
avatar
Teddy Roosevelt was one of the greatest Presidents this nation ever had -
 (And he was a Republican)

On August 31, 1910, President Theodore Roosevelt visited Osawatomie, Kansas and laid out his vision for what he called a "new nationalism."

In the speech, he called for the end of special protections for businesses in government. He declared that anyone who worked hard should be able to provide for themselves and their family, and that no one person was more entitled to special privileges than another. He stood by fair play under the rules of the game ensuring the rules made opportunity available to everyone.



Sep 11, 2012 4:41PM
avatar
Ryan thinks States should be allowed to legalize marijuana.
Sep 11, 2012 9:11PM
avatar
How many billions more are we debt since this time yesterday? Another credit down grade coming and still no hint of a budget from Congress. In a few weeks they will be asking us to let them raise the debt limit again.

Time to cut the gov't down by 80% and let them get a real job.

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