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.

Energy prices -- New York close
 

Tues.

Mon.

Month chg.

YTD chg.
Crude oil 

$89.82

$89.37

6.79%

13.18%
(per barrel)











Heating oil

$2.5164

$2.4737

8.61%

18.94%
(per gallon)











Natural gas 

$4.0590

$4.2370

-2.89%

-27.15%
(per mil. BTU)











Unleaded gasoline

$2.3985

$2.3778

5.88%

16.83%
(per gallon)











Retail gasoline

$2.9830

$2.9810

4.52%

13.04%
(per gallon; AAA)












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
 
  Mon.     Fri.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.130%

0.100%

-18.75%

160.00%
5-year Treasury note 

1.962%

1.953%

34.02%

-26.95%
10-year Treasury note

3.326%

3.349%

18.91%

-13.45%
30-year Treasury bond

4.431%

4.462%

8.02%

-4.52%
Currencies











U.S. Dollar Index

81.069

80.972

-0.25%

3.64%
British pound

$1.5470

$1.5513

-0.63%

-4.36%
(in U.S. $)











U.S. $ in pounds

£0.646

£0.645

0.64%

4.56%
Euro in dollars

$1.310

$1.313

0.84%

-8.59%
(in U.S. $)











U.S. $ in euros

€ 0.763

€ 0.762

-0.83%

9.40%
U.S. $ in yen 

83.963

83.760

0.17%

-9.72%
U.S. $ in Chinese

6.685

6.671

-0.13%

-2.06%
yuan











Canada dollar

$0.983

$0.983

0.83%

3.42%
(in U.S. $)











U.S. dollar 

$1.018

$1.018

-0.81%

-3.31%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,388.80

$1,386.10

0.27%

26.69%
(per troy ounce)











Copper

$4.28

$4.21

11.85%

27.78%
(per pound)











Silver

$29.39

$29.36

4.29%

74.50%
(per troy ounce)











Wheat 

$7.6500

$7.6950

17.60%

41.27%
(per bushel)











Corn

$6.0225

$5.9950

13.63%

45.30%
(per bushel)











Crude oil 

$89.82

$89.37

6.79%

13.18%
(per barrel)












19Comments
Dec 21, 2010 6:02PM
avatar
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
avatar

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
avatar

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
avatar
ps, 144 here

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

Dec 22, 2010 12:45AM
avatar
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
avatar

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 9:32PM
avatar
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
avatar

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
avatar

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

Dec 21, 2010 6:36PM
avatar
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
avatar
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
avatar
Tumble, You really think the true upper class has real, unbacked, Debt?
Dec 21, 2010 5:16PM
avatar
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
avatar
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
avatar
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
avatar
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.
Dec 21, 2010 4:43PM
avatar

A) Faith, hope, righteousness, morals and values = HEAVEN

 

B) Greed, lies, deception, secular humanism and political correctness = HELL

 

The choice is yours! Make it the right one, while you still can. GOD bless all!

Dec 21, 2010 4:36PM
avatar

Glad to see that I'm not alone when it comes to my Christian beliefs. "You can take our jobs, you can take our lives, but you can never take our souls, for those we promised GOD long, long ago". Thumbs up 

 

The crazy Christian, Lost on Earth

 

 

Dear Robert,

We're on the front lines right now, standing up for religious freedom, in a clear case of blatant religious discrimination.

Here's the disturbing situation:

Dr. C. Martin Gaskell is a world-class astronomer who also happens to be a Christian. Despite his reputation, his degrees, and accolades from the science community, that one point ... his faith ... cost him a prestigious job at the University of Kentucky.

So the ACLJ is gearing up to go to trial in federal court - to protect his ... and ultimately your ... constitutional and religious freedom.

Join us in this important fight. Right now, you can double your donation to help us reach our online goal of $750,000, through the December Life and Justice Online Matching Challenge. Every contribution to this important cause is doubled - $100 is matched to become $200 - when you give today.

Through your support, we're representing Dr. Gaskell, a leading astronomer. In 2007, he was in the running for a job with the University of Kentucky - the most qualified candidate for the job as head of their new observatory.

Until the chairman of the physics and astronomy department researched Dr. Gaskell's religious beliefs online ... and turned up ''evidence'' of his evangelical Christian faith.

According to Dr. Gaskell, the chairman said Dr. Gaskell's religious beliefs and his ''expression of them would be a matter of concern'' to the dean.

A university staff member wrote that she did an Internet search on Dr. Gaskell and found links to his notes for a lecture that explores - among other topics - how the Bible could relate to contemporary astronomy.

''Clearly this man is complex and likely fascinating to talk with,'' the staff member wrote, ''but potentially evangelical. If we hire him, we should expect similar content to be posted on or directly linked from the department Web site.''

The University of Kentucky proceeded to hire someone else. And Dr. Gaskell sued the institution.

Make no mistake, federal law prohibits discrimination on the basis of religion, so the ACLJ is fighting back - for the sake of constitutional and religious freedom.

Recently, a federal judge in Kentucky ruled that the case could go forward, and a trial is scheduled for February.

This is such a critical time for us. We need to hear from you now. This case is in federal court and we have a chance for a real victory, made possible by your generous support.

Your online tax-deductible gift will be matched dollar for dollar before the year's end.

Our goal is to raise $750,000 online in the month of December.

Thank you for standing with us.

Sincerely,

Jay Sekulow
ACLJ Chief Counsel

Dec 21, 2010 4:19PM
avatar

Maybe the fact that Bernanke just finished buying ANOTHER $10B of our own debt today to make a the largest holders of US debt... at over $1T!!!

 

Search: "System Open Market Account Holdings" on the Fed site, and "Fed Treasury Holdings: $1,000,341,000,000"

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