Dow up 55 as holiday rally continues

The blue chips top 11,500 for the first time since 2008. Nike shares sell off despite strong earnings. Jabil Circuit and Adobe shares jump.

By Charley Blaine Dec 21, 2010 3:01PM
Charley BlaineUpdated: 7:08 p.m. ET

They were singing our song today: "Have yourself a merry little rally."

The major averages ended higher. The dollar moved. Oil and gold were both higher.

Part of the cheer was holiday-related, to be sure. Some of the cheer is a global sigh of relief that, for today anyway, the potential of a big Korean shootout was lower. North Korea told unofficial envoy Bill Richardson that it was willing to let United Nations inspectors monitor its nuclear program again.

Part of the cheer had to do with the second big deal involving a Canadian bank in a week: Toronto-Dominion Bank (TD) is buying Chrysler Financial from buyout giant Cerberus  Capital for $6.3 billion. Last week, Bank of Montreal (BMO) agreed to buy Marshall & Ilsley (MI), a big Midwestern banking company, for $4.1 billion.

Two tech companies -- Jabil Circuit (JBL) and Adobe Systems (ADBE) -- reported big earnings gains and were the top two performers among Standard & Poor's 500 ($INX) stocks.

The Dow Jones industrials ($INDU) closed up 55 points to 11,533, its best finish since Aug. 29, 2008, before investment bank Lehman Bros. failed and set off the global financial crisis. The S&P 500 was up 7 points to 1,255, also a 27-month high. And the Nasdaq Composite Index ($COMPX) added 18 points to 2,668, its best close since Dec. 28, 2007.

The Nasdaq-100 Index ($NDX.X) rose 11 points to 2,235, its best close since its all-time closing high of 2,238.38 on Oct. 31, 2007. 

Wednesday's market will cope with some important economic reports, including a final estimate on third-quarter Gross Domestic Product, corporate profits, existing-home sales for November and the Federal Housing Finance Agency's October home-price index.

Futures trading suggests a modestly lower open for stocks.

Nike shares tumble
After the close, shares of Nike (NKE) were off more than 5% despite reporting fiscal-second-quarter earnings that beat analyst estimates and revenue that was in line with estimates.

The shares were at $87.35, down from a regular close of $92.30, an all-time high. Revenue was up 11% to $4.8 billion. Earnings per shares were up 24% to 94 cents.

Future orders -- to be delivered through April -- were up 11% from a year ago, with North American orders up 16%. But inventories were also up 8% from a year ago.

It may be that the sell-off was simply due to profit-taking.

Windows for tablet PCs?
Microsoft (MSFT) shares were up 0.5% to $28.21 after hours on a Wall Street Journal report that the software giant will discuss a new version of its widely used Windows operating system. (Microsoft is the publisher of MSN Money.)

The new product would target low-power devices such as tablet devices like Apple's (AAPL) iPad.

The software, expected to be demonstrated at the Consumer Electronics Show in early January, will be adapted to run on microprocessors sold Arm Holdings (ARMH), a British semiconductor company, as well as the technology popularized by Intel (INTC), sources told The Journal.

ARM shares were up 3.3% after hours to $20.43 in New York, after jumping 6.6% to $19.78 in regular trading. Intel was off 1% to $20.90 after hours, on top of a 0.6% decline to $21.10.
The software isn't expected to be available for two or more years, The Journal said.

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Commodities move higher
Crude oil settled up 45 cents to $89.82 a barrel. It peaked at $89.97.

Gold was up $2.70 to $1,388.80. Interest rates were mixed.

Cotton jumped 3.2% to $1.5912 a pound, up 120% since February. Sugar finished up a penny at 39 cents a pound. That's up 56% since a low in May.

The 10-year Treasury yield was 3.326%, down from 3.349% on Monday. The 5-year yield was at 1.962%, up from 1.953% on Monday.

The dollar was higher against major currencies, with the U.S. Dollar Index up 9.7 cents to $81.069. The index measures the dollar against a basket of currencies.

Toronto-Dominion's big deal

Toronto-Dominion's deal to buy auto-finance operator Chrysler Financial from Cerberus Capital Management is its second-largest acquisition. Toronto-Dominion Bank

The purchase includes $5.9 billion in assets and about $400 million in goodwill.  Toronto-Dominion doesn’t intend to issue stock or bonds to finance the acquisition.

Canadian lenders, ranked the soundest by the World Economic Forum, are using their excess capital to expand abroad after asset values plunged following the financial crisis. 

Wall Street likes this deal. Toronto-Dominion shares were up 3.5% to $71.95.

Financials lead the market
The rally was broad, with eight of 10 S&P 500 sectors showing gains. Financials were the market's overall leader, and you can see that in the Dow.

The top three performers were all financial companies: Bank of America (BAC), up 2.9% to $12.98; JPMorgan Chase (JPM), up 2.6% to $41; and American Express (AXP), up 1.7% to $43.23.

Even Deutsche Bank (DB) was higher, up 0.5% to $52.05 in New York. The German banking giant agreed to pay $553.6 million and admit criminal wrongdoing in a long-running probe over tax shelters that prosecutors claim generated billions in false tax losses.

Twenty of the 30 Dow stocks were higher. The laggard was 3M (MMM), down 0.9% to $86.53.

In addition, 66 Nasdaq-100 stocks were higher, led by Adobe and flash-memory maker SanDisk (SNDK), up 4.9% to $51.64. SanDisk was also third among S&P 500 stocks.

Adobe shares rose 6% to $30.93 after the company said late Monday that its profit grew 38% to $285.7 million, or 56 cents per share, beating the 52-cent average estimate of analysts. Adobe Systems

Jabil Circuit shares jumped 10.7% to $19.55. Its fiscal-first-quarter earnings nearly doubled to $132 million or 61 cents per share, exceeding expectations for 54 cents.

But Darden Restaurants (DRI) shares tumbled 5.7% to $47.54 after the operator of the Olive Garden and Red Lobster chains offered a weak same-store sales forecast for 2011.

Shares of used-car dealer CarMax (KMX) plunged 7.6% to $33.17, despite reporting third-quarter results that beat expectations. The problem: Gross profit per car was $2,103. Analysts had expected a profit of about $2,190. CarMax

Global equities rallied after Chinese Vice Premier Wang Qishan said the nation would back measures aimed at stabilizing European countries struggling with debt. He made the comments at the European Union-China High Level Economic and Trade Dialogue.

Moody's warned that it may cut Portugal's debt rating by as much as two notches. Last week, the rating company said it may downgrade Spain's debt.

Short hits from the markets -- New York close
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Dec 21, 2010 6:02PM
Well I am glad some one is having a merry little Christmas, gas is above $3.00 a gallon and heading for $4.00.  My commute is costing me $250 a month instead of $180, my grocery bill is going up but my wages are the same.  Our health insurance plan is changing and will cost more next year, utilities are going up because of natural gas and oil prices are spiking.  Merry Christmas to all in the Middle Class and get ready to become the new Lower Class.
Dec 22, 2010 6:36PM

For the nasdaq all-time high you need to go back to February 2000 for $4700. How quickly we forget.

Dec 22, 2010 10:50AM

Over sold, over sea's fear. I believe they are about to short this baby again. Any one else have any input on this.


The way it appears to me all relate to currency devaluation and asset inflation, including stock markets. As an aside, I've been notified of price increases of at least 5% by the majority of my business's vendors. The Feds can take that core inflation # and stick it right up thier dissembling fat azzes.

Dec 22, 2010 8:41AM
ps, 144 here

144... hmmm, IQ is beginning to look preciptously overbought on this blog...

Dec 22, 2010 12:45AM
We don't need to declare war or bankruptcy or hyperinflate our currency.  We just need to grow.  Do the math.
WWII and the banks were 'LENDING' for the growth to happen; no lending no growth! A+ right??Open-mouthed
Dec 22, 2010 12:35AM

Let me get this right. For last month all the market people were saying we need to reach 1250 on S&P for market to move higher. Now that were there we are over sold. Pull back is coming. Like I said before welcome to the casino. 5 times this year we up 7% to 12% and pulled back.  It'S got nothing to do with earnings or market conditions. They hype and push us higher than start fear crap. Over sold, over sea's fear. I believe they are about to short this baby again. Any one else have any input on this.

Dec 21, 2010 10:29PM
Dec 21, 2010 10:25PM

Thinking  umm jones, welcome to the new normal dude.  did you think it really was possible for us as a country to live beyond our means and pile on the debt forever?


our standard of living is simply reverting to the mean where the rest of the world lives. not everyone can have a brick house, two cars, 2.5 kids, pets, big screens, cell phones, ipads/pod/touches/phones, i-****ola of all types.  this is finally getting back to financial reality where we were before bush took us from $5 trillion in debt to $10 trillion to enrich the elites. time to Coffee cup

Dec 21, 2010 10:11PM
Thumbs up  lmao bosco, tell us what you really think!!!  you must be one o' them weimar dudes!
Dec 21, 2010 10:07PM

Surprised  tumble, open your eyes and your horizon.  there are many other fiscal and monetary policy measures available to the US government and fed other than printing money/inflation or bankruptcy.  why not go study this area before ranting?


other basic solutions include continuing to rein in spending (the latest earmark-laden budget crashed and burned), fiscal conservancy/austerity measures (as recently proposed, and some adopted, measures from the national debt reduction commission - 11 out of 18 bi-partisan members in agreement), and restoring a normal income tax rate on the wealthy and ultra-wealthy (saves $800 billion over ten years).  these are only a few of the measures that will be taken.  of course the biggest of all is simple economic recovery which boosts federal revenue collection.


google on the su****ect, see wikipedia, and by all means inhale deeply Coffee cup 

Dec 21, 2010 9:32PM
Who cares who got all the gold on wall street today! Tomorrow it will be a crisis as consumers didnt spend enough on x-mas. Myself, am outta work and my car died & had to junk it yesterday. Meanwhile the traders are still selling us out to china, tiwan..... U think i care? I cant wait till it crashes an all them pigs jump outta the top floor windows!
Dec 21, 2010 7:43PM

Got you beat Tumbleweed,.. by a nose. My IQ is 142, but we're close enough. Wink I'm so smart, that no one wants to hire me. Tongue out No wait,... I'm a crazy Christian. So be it!


One point that I'd like to make is that on paper, every American might owe $100,000, but in reality, some people owe much much more (due to their "CREDIT" brain washings). I am one of the lucky few,.. or should I say,.. the smart few, that was taught and raised by my parents that "CREDIT" was "EVIL" and the wrong way to live. I for one, don't owe a single cent on anything nor to anyone. I have always saved and paid cash for everything my whole life. Sincerely, The crazy Christian

Dec 21, 2010 7:05PM

 Perception- 50% of the game- I'm happy.

Dec 21, 2010 6:36PM
People on here complaining about $3 gas, its nearly $3.50 here and diesel is $3.80 give me a break. $400 dollar heating bills, $300 light bills and food going through the roof. Wall street has to make their money back somehow and its again on the working man.
Dec 21, 2010 5:44PM
Bosco, to truly grow, we need to harvest more, pump more out of the ground, mine more. All anti - Democratic Ideals.
Dec 21, 2010 5:18PM
Tumble, You really think the true upper class has real, unbacked, Debt?
Dec 21, 2010 5:16PM
Spread the Christmas Cheer and show some compassion. Hug a Banker. Maybe one from bank of A or another from the blessed too big to fail crowd.
Dec 21, 2010 5:13PM
Jack' the DOW has been above 11500, but has never closed the day that high since 08. No conspiracy no deceit just facts.
Dec 21, 2010 4:57PM
God Bless Ben Bernake he is our Savior along with his companions in the Banking Cartels! Happy New Year get ready for 2011 !
Dec 21, 2010 4:55PM
Seems to me that the DOW was above 11,500 in the past several weeks. A little of the hell choice going on here maybe, in the form of deceit.
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[BRIEFING.COM] The stock market finished the Tuesday session on an upbeat note with small caps pacing the rally. The Russell 2000 advanced 0.8%, while the S&P 500 added 0.5% with eight sectors ending in the green.

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