Dow up 67 as stocks see relief from Thursday loss
The blue chips fall 1% for the week; tech stocks move higher. Financial stocks, led by JPMorgan Chase, rally after Moody's downgrade. Oil and gold are higher. Facebook jumps 10.1% on the week. Research In Motion falls under $10.
By Charley Blaine Jun 22, 2012 12:37PM
Updated: 6:29 p.m. ETPowered by a surprising surge in financial stocks, the stock market enjoyed a solid rally today that pushed technology stocks higher for the week and very nearly pulled the entire stock market into the black as well.
The rally was helped by leaders of Germany, France, Italy and Spain agreeing to put together a package of tools to promote growth in the European economy. There are differences enough among them, however, that a summit next week of all the eurozone countries could prove difficult.
Financial stocks moved higher after Moody's Investors Service downgraded its ratings of 15 of the world's largest banking companies. The group includes JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Morgan Stanley (MS) and Goldman Sachs (GS). Moody's had warned in February that the downgrades were coming, but they weren't as bad as expected. JPMorgan was the best performer of the U.S. members of the group, up 48 cents to $35.99. The stock was up 3.1% this week and is 8.9% higher for the month.
Meanwhile, stocks in Asia and Europe were lower, reflecting Thursday's U.S. losses. Crude oil (-CL) in New York and Brent crude in London were higher even the dollar rose against the euro. Gold (-GC) moved higher as well.
The Dow closed up 67 points to 12,641. The Standard & Poor's 500 Index ($INX) gained 10 points to 1,335, and the Nasdaq Composite Index ($COMPX) gained 33 points to 2,892. The Nasdaq-100 Index ($NDX), heavily influenced by Apple (AAPL), climbed 29 points to 2,586. Apple was up $4.43 to $582.01.
Article continues below.
For once, Europe helped the market.
Late in the day, Italy, France, Spain and Germany agreed to push European leaders at a key summit next week to sign off on a €130 billion ($163 billion) euro plan aimed at increasing growth in Europe's beleaguered economies.
The agreement, which came during a summit in Rome, is a victory for the leaders of Italy, France and Spain, The Wall Street Journal noted. For months, they've been trying to convince Germany, Europe's strongest economy, that the region needs a plan to boost growth and offset the wave of austerity measures countries are taking to fight the debt crisis.
Meanwhile, Research In Motion (RIMM) shares fell 21 cents to $9.86, their first close below $10 since December 2003. Credit Suisse analyst Kulbinder Garcha said the company may miss Street estimates when it reports fiscal-first-quarter earnings after Thursday's close.
| Markets for the week | ||||||||||||
| 6/22/2012 | 6/15/2012 | % chg. | YTD chg. | |||||||||
| Dow Industrials | 12,640.78 | 12,767.17 | -0.99% | 3.46% | ||||||||
| S&P 500 | 1,335.02 | 1,342.84 | -0.58% | 6.16% | ||||||||
| Nasdaq | 2,892.42 | 2,872.80 | 0.68% | 11.03% | ||||||||
| Russell 2000 | 775.16 | 771.32 | 0.50% | 4.62% | ||||||||
| Crude oil | $79.76 | $84.03 | -5.08% | -19.30% | ||||||||
| (per barrel) | 0.00 | 0.00 | 0.00% | 0.00% | ||||||||
| U.S. Dollar Index | 82.44 | 81.97 | 0.58% | 2.38% | ||||||||
| 10-yr. Treasury | 1.67% | 1.59% | 5.36% | -10.64% | ||||||||
| Gold | $1,566.90 | 1,628.10 | -3.76% | 0.01% | ||||||||
Crude oil and gold move higher
Crude oil in New York settled up $1.56 to $79.76 a barrel after falling to $78.20 in New York on Thursday. Brent crude was up $1.77 to $91 a barrel.
The national average price of unleaded gasoline was $3.454, down from Thursday's $3.472, according to AAA's Daily Fuel Gauge Report. For the week, the price is off 2%, and it's down 12.3% from its April high of $3.936 a gallon.
Gold settled up $1.40 to $1,566.90 an ounce. Silver (-SI) was off 17.8 cents to $26.661 an ounce, but copper (-HG) settled up slightly to $3.306 a pound. For the week, gold was down 3.8%, with silver down 7.2% and copper down 2.3%. Gold is even for the year, with copper down 3.8% and silver off 4.5%.
Interest rates were higher, with the 10-year Treasury yield rising to 1.672% to 1.618% on Thursday.
| Energy prices -- New York close | ||||||||||||
| Fri | Thur. | Month chg. | YTD chg. | |||||||||
| Crude oil (-CL) | $79.76 | $78.20 | -7.82% | -19.30% | ||||||||
| (per barrel) | ||||||||||||
| Heating oil (-HO) | $2.5320 | $2.5231 | -6.33% | -13.12% | ||||||||
| (per gallon) | ||||||||||||
| Natural gas (-NG) | $2.6250 | $2.5820 | 8.38% | -12.18% | ||||||||
| (per mil. BTU) | ||||||||||||
| Unleaded gasoline (-RB) | $2.4676 | $2.4520 | -9.37% | -7.14% | ||||||||
| (per gallon) | ||||||||||||
| Brent crude | $90.98 | $89.23 | -10.69% | -15.27% | ||||||||
| (per barrel) | ||||||||||||
| Retail gasoline | $3.4540 | $3.4720 | -4.59% | 5.43% | ||||||||
| (per gallon; AAA) | ||||||||||||
The Dow, S&P end week lower; Nasdaq to end with a gain
The market ended the week, well, mixed. The Dow was off 1% for the week, with gains for JPMorgan Chase, Merck (MRK) and Microsoft (MSFT) offset by losses in Hewlett-Packard (HPQ), Procter & Gamble (PG) and Chevron (CVX). (Microsoft publishes MSN Money.)
The S&P 500 finished with a 0.6% loss. Health care, financial and technology stocks were higher, but energy and utility shares are lower. Airline stocks were among the top-performing groups thanks to lower oil prices.
The Nasdaq and Nasdaq-100 finished up 0.7% and 0.6%, respectively. Not bad considering Thursday's smackdown. Vertex Pharmaceuticals (VRTX) and DirecTV (DTV) were the top Nasdaq-100 performers for the week, up 7.2% and 5.8%, respectively. Nvidia (NVDA), whose chips are key to the success of many tablet devices, was the third-best Nasdaq-100 performer, up 5.7%. The shares were up 16 cents today to $13.
Let us note that Facebook (FB), up $1.21 today to $33.05, gained 10.1% on the week. It is still down 13% from its $38 offering price when it went public in mid-May.
With a week to go, June is holding up as a winner for stocks. The Dow is up 2%, with the S&P 500 up 1.9% and the Nasdaq up 2.3%. The overall strength comes despite the two worst losses of the year: on June 1, when the Dow fell 275 points, and Thursday's dive.
For the year, the Dow is up 3.5%, with the S&P 500 up 6.2% and the Nasdaq up 11%.
The ratings themselves get lousy reviews
The prospect of downgrades had weighed on banks since Moody's said Feb. 15 it was reviewing 17 banks with capital-markets operations because of fragile confidence and tighter regulations that pinched revenue. Pressure mounted as Europe's sovereign-debt crisis intensified. The group didn't peak until the end of March, however.
JPMorgan Chase fell 33% between March 28 and June 1 -- and is up 16% since then. Much of the fall was related to the big trading loss that developed as it tried to hedge against a decline in European financial markets.
The Moody's ratings cuts are "a mea culpa from 2007 and 2008," James Leonard, a credit analyst at Morningstar, told Bloomberg News. "The banks have gotten so much better in the last few years in terms of capital, yet their ratings keep going down. What does that tell you? That the ratings were so wrong before."
Of the fifteen banking companies, the French banks were the best performers today, with Society Generale (SCGLY) up 15 cents to $4.47, BNP Paribas (BNPQY) up 49 cents to $18.55, and Credit Agricole (CRARY) up 8 cents to $2.09.
Leaders and laggards
Darden Restaurants (DRI), operator of the Olive Garden and Red Lobster chains, slid 35 cents to $50.04. Fiscal-fourth-quarter revenue trailed analysts’ estimates because of an unexpected decline in sales at the company’s older restaurants.
First Solar (FSLR) jumped $1.34 to $15.88, tops among S&P 500 stocks, The largest maker of thin-film solar panels received permission to continue construction on a $1.36 billion power project in Los Angeles County.
Monster Beverage (MNST) was down $1.13 to $73.61. The distributor of energy drinks and fruit juices will replace Sara Lee (SLE) in the S&P 500.
Ryder System (R), the U.S. truck leasing company, fell $5.31 to $35.44. The company cut its full-year earnings forecast because of lower demand for commercial rentals.
Twenty-six of the 30 Dow stocks were higher, led by Microsoft, Merck (MRK) and Bank of America. Wal-Mart Stores (WMT) and Kraft Foods (KFT) were the laggards.
Caterpillar (CAT), closely watched because of its exposure to economic forces overseas, was off two cents to $84.96 but fell 2.3% on the week and is off 20% this quarter.
First Solar, Tripadvisor (TRIP) and Southwestern Energy (SWN) were the S&P 500 leaders, with Ryder, Macy's (M) and cruise-line operator Carnival (CCL) the laggards. A total of 384 S&P 500 stocks were higher.
Life Technologies (LIFE) and Vertex were the Nasdaq-100 leaders; 95 stocks in the index were higher. The laggards were Research In Motion and Monster Beverage.
| Short hits from the markets -- New York close | ||||||||||||
| Fri | Thur. | Month chg. | YTD chg. | |||||||||
| Treasury yields | ||||||||||||
| 13-week Treasury bill | 0.0800% | 0.070% | 14.29% | 700.00% | ||||||||
| 5-year Treasury note | 0.751% | 0.725% | 11.92% | -9.52% | ||||||||
| 10-year Treasury note | 1.672% | 1.618% | 5.76% | -10.64% | ||||||||
| 30-year Treasury bond | 2.756% | 2.688% | 3.14% | -4.60% | ||||||||
| Currencies | ||||||||||||
| U.S. Dollar Index | 82.442 | 82.488 | -0.83% | 2.38% | ||||||||
| British pound | 1.5596 | 1.5603 | 1.19% | 0.37% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in pounds | £0.641 | £0.641 | -1.17% | -0.37% | ||||||||
| Euro in dollars | $1.26 | $1.26 | 1.71% | -2.97% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. $ in euros | € 0.795 | € 0.797 | -1.68% | 3.06% | ||||||||
| U.S. $ in yen | 80.65 | 80.22 | 2.66% | 4.60% | ||||||||
| U.S. $ in Chinese | 6.39 | 6.36 | 0.10% | 0.98% | ||||||||
| yuan | ||||||||||||
| Canada dollar | $0.977 | $0.973 | 0.83% | -0.46% | ||||||||
| (in U.S. $) | ||||||||||||
| U.S. dollar | $1.025 | $1.028 | -0.83% | 0.46% | ||||||||
| (in Canadian $) | ||||||||||||
| Commodities | ||||||||||||
| Gold (-GC) | $1,566.90 | $1,565.50 | 0.17% | 0.01% | ||||||||
| (per troy ounce) | ||||||||||||
| Copper (-HG) | $3.306 | $3.298 | -1.77% | -3.78% | ||||||||
| (per pound) | ||||||||||||
| Silver (-SI) | $26.6610 | $26.8390 | -3.95% | -4.49% | ||||||||
| (per troy ounce) | ||||||||||||
| Wheat (-ZW) | $6.7325 | $6.6175 | 4.58% | 3.14% | ||||||||
| (per bushel) | ||||||||||||
| Corn (-ZC) | $5.910 | $5.865 | 6.44% | -8.58% | ||||||||
| (per bushel) | ||||||||||||
| Cotton | $0.7417 | 0.7817 | 3.66% | -19.10% | ||||||||
| (per pound) | ||||||||||||
| Coffee | $1.5590 | 1.588 | -4.33% | -32.11% | ||||||||
| (per pound) | ||||||||||||
| Crude oil (-CL) | $79.76 | $78.20 | -7.82% | -19.30% | ||||||||
| (per barrel) | ||||||||||||
74Comments
Jun 22, 2012 7:42PM
Jun 22, 2012 7:40PM
Jun 22, 2012 7:00PM
Jun 22, 2012 6:50PM
>>>Allow insurance companies to trade across state lines making pricing more competitive, and you will see prices go down<<<
the down side is so many of these insurance companies are actually just one.
such as "blue cross of pick-your-state".
granted opening state lines should help, but medical insurance companies are really like the oil companies. count them on one or two hands.
STOPPING the practice of getting insurance under a job and having people buy direct themselves like auto insurance would have an even bigger affect on insurance rates.
Jun 22, 2012 6:45PM
Jun 22, 2012 6:25PM
Delta Airlines, buys Phillips 66 oil refinery to cut out the midde man and reduce costs of fuel. Now if Airlines understand the benefits of cutting out the middle man and reducing costs, then why do so many Americans insist on paying 1/3 rd more for medical coverage then we need to, lets cut out the middle man, it's just smart business sense.
Jun 22, 2012 6:16PM
Hey you GOP apocalyptic believers.
Yesterday it was apocalyptic economy. Today "stocks see relief".
If you did not see the end of the world when Lehman Bros collapsed and DOW about 7K? Why would you see apocalypse now?
If in 2008 the GOP stated that "The fundamentals of the economy are sound" and then came the collapse; doesn't that mean we thought the economy was good and hence we had no idea this was coming.
Now we scream apocalypse on alternate days when some "leading" indicator goes down, and scream it's not enough when another goes up.
After 2008 we monitor everything. Have we gotten more sensitive since 2008. Are we more vulnerable since 2001?. Are we less confident since China surpassed Japan and is now competing with us.
Are we perhaps cognisant if our own limitations and know now that perhaps the American dream is illusory to more people than it was during the Baby Boomers that perhaps the current generation will be the first to be worse off than the previous.
I am glad the news today is not so bad yet knowing that it is not so good and would like to
end this Friday work week on that note.
Monday we will return to the bickering and hate, and watch the gambling Halls of Wall Street determine our emotions and feelings about ourselves our families and our future.
Have a good WKND!
Jun 22, 2012 6:09PM
THE RIVER OF MONEY (Simplistic). Part 1. In parts because of the spam filters.
Water (money) is created in the mountains of the Fed and flows down in a river to it's people as a trading unit for work and services performed. The people used this water instead of barter to buy goods and services from each other. They watered their crops and harvested and sold any excess for more water.
As some become more successful, they built storage places to store the excess water to be used in the future for any mishap that could befall them. While others used all they had because they were less successful and were not good farmers because of the soil, or terrain.
Water was taken as taxes for the economic activity and was sent back to the Fed to be sent down the mountain again.
As taxes were reduced, and the Fed didn't want to drown the countryside, the river from the Fed became smaller and smaller.
Some people who became so successful that they were able to put up dams to hold all their excess water. After a long while, as those who were successful soon had huge dams of excess water. As the amount of the flow of water used in trade for goods and services became less and less from the stockpiling of water by the successful ones, the people had less and less of the water to go around.
Without water, their crops began to fail and those who were successful were able to pay less and less for the services and goods they received because the supply of water had became so tight.
The Fed, realizing the majority of people were hurting started making more water to send down the river to keep trade going so the people would not starve and trade would not be impeded.
The problem was not that there was not enough water, but rather the water was in storage, like during the oil crisis of the (70s) that was made worse by people keeping their gas tanks full all the time and using up the available supply. If those with the stored water used it as it was intended, rather than stored, the shortage would not have occurred. To much stored water in the hands of the successful is not good for the rest of the people.
The people who were able to store the water are not to blame. They were doing what was best for them. That's the way it should be. Taxes should have keep the stored surplus from becoming too big in the first place, like in Germany. We want the people of this country to be successful. We want them to work hard and receive compensation that will let them live long productive lives. We all benefit from the work and services we produce. That was the promise of this country. We also have a trade deficit of over 1/2 trillion dollars a year. Like a river of money flowing out of this country and along with it, jobs. Our trading partners should either buy more of our goods or services or we should buy less of theirs. Trade wars are not the answer, but something should be done to nudge them to be better trading partners.
Water (money) is created in the mountains of the Fed and flows down in a river to it's people as a trading unit for work and services performed. The people used this water instead of barter to buy goods and services from each other. They watered their crops and harvested and sold any excess for more water.
As some become more successful, they built storage places to store the excess water to be used in the future for any mishap that could befall them. While others used all they had because they were less successful and were not good farmers because of the soil, or terrain.
Water was taken as taxes for the economic activity and was sent back to the Fed to be sent down the mountain again.
As taxes were reduced, and the Fed didn't want to drown the countryside, the river from the Fed became smaller and smaller.
Some people who became so successful that they were able to put up dams to hold all their excess water. After a long while, as those who were successful soon had huge dams of excess water. As the amount of the flow of water used in trade for goods and services became less and less from the stockpiling of water by the successful ones, the people had less and less of the water to go around.
Without water, their crops began to fail and those who were successful were able to pay less and less for the services and goods they received because the supply of water had became so tight.
The Fed, realizing the majority of people were hurting started making more water to send down the river to keep trade going so the people would not starve and trade would not be impeded.
The problem was not that there was not enough water, but rather the water was in storage, like during the oil crisis of the (70s) that was made worse by people keeping their gas tanks full all the time and using up the available supply. If those with the stored water used it as it was intended, rather than stored, the shortage would not have occurred. To much stored water in the hands of the successful is not good for the rest of the people.
The people who were able to store the water are not to blame. They were doing what was best for them. That's the way it should be. Taxes should have keep the stored surplus from becoming too big in the first place, like in Germany. We want the people of this country to be successful. We want them to work hard and receive compensation that will let them live long productive lives. We all benefit from the work and services we produce. That was the promise of this country. We also have a trade deficit of over 1/2 trillion dollars a year. Like a river of money flowing out of this country and along with it, jobs. Our trading partners should either buy more of our goods or services or we should buy less of theirs. Trade wars are not the answer, but something should be done to nudge them to be better trading partners.
Jun 22, 2012 5:57PM
Jun 22, 2012 5:43PM
Jun 22, 2012 5:43PM
Just when you thought the Obama campaign couldn’t get any more desperate, they come up with this: the Obama Event Registry, asking supporters who are getting married, having a birthday, or celebrating an anniversary to direct gift-givers to Obama’s re-election website.
THIS IS TRULY PATHETIC
Jun 22, 2012 5:36PM
Jun 22, 2012 5:34PM
Jun 22, 2012 5:20PM
Jun 22, 2012 5:20PM
Jun 22, 2012 5:02PM
North Las Vegas declared a financial disaster. Fitch downgraded it's debt to BBB. I think you can see the Bellagio from there. Owned by the chief contributor to Romney's campaign. You can't buy better advertising. "Listen to my flip flop recovery words, don't look at what's happening just a few blocks from outrageous wealth and omnipotence. I will fix what's wrong." Not.
Jun 22, 2012 5:00PM
Spooker
That's not the point. Do you really think I believe that taking a device and scraping the Uterus of any viable potential human being is right? but I do believe that decision rests on the person that gives life, the woman. Not the State.
You guys believe the STATE should be less intrusive in the freedoms of the individuals yet being against abortion is an aberration to those same principles. Is it the freedom of man excluding that of women?
Amazingly enough in the name of "conservative principles" you agree with the religious right on going to war; the killing of humans? And when the STATE decides that you cannot abort the fetus and it grows to be a human being that commits a crime, you also believe that the STATE should then kill this human being.
This has perplexed me for so long.
Jun 22, 2012 4:56PM
"the stock market and the American banks just pretty much laugh it off"
I don't think so. I think they wept their way home. It's all banks in all countries. Somebody wanted us to stay in the 20th Century forever. Nothing lasts forever. Bankers didn't realize it when they agreed to this scam. They know it now and there is no place on Earth where they can hide. These are not our best or brightest, just our greediest and most unethical.
I don't think so. I think they wept their way home. It's all banks in all countries. Somebody wanted us to stay in the 20th Century forever. Nothing lasts forever. Bankers didn't realize it when they agreed to this scam. They know it now and there is no place on Earth where they can hide. These are not our best or brightest, just our greediest and most unethical.
Jun 22, 2012 4:45PM
Jun 22, 2012 4:36PM
How can these 15 largest banks be downgraded and the stockmarket and the american banks just pretty much laugh it off. This just does not make sense when you think about how much "money" is being pumped into the system to make all of us believe it is a healthy system. We all feel that something is not right but it's hard to pin down just one thing when so much is screwed up. Does no one see a problem with this. Everyone have a great day and never stop asking questions.
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