Dow jumps 272, biggest gain in a month

The S&P 500 and Nasdaq also surge as banks rally on hopes for stability in Europe. Apple slips on a report it's cut back orders for iPad parts. Gold falls below $1,600. Berkshire Hathaway will buy back shares.

By Charley Blaine Sep 26, 2011 1:27PM

Charley BlaineUpdated: 8:25 p.m. ET


U.S. stocks surged to big gains today as hopes grew that regulators were building a plan to help stabilize troubled European banks.


The plan involves expanding a rescue fund through bond sales so that the banks can absorb losses expected when and if Greece defaults on its debt.


The Dow Jones industrials ($INDU) were up more than 270 points on the news, their best gain in a month and first close above 11,000 after three days. The one downside to the rally: Volume was quite light. JPMorgan Chase (JPM) was the top performer among the 30 Dow stocks, rising 7% to $31.65.


In addition, Boeing (BA) shares were up 4.2% to $62.01 as the aerospace giant made the first delivery of a 787 Dreamliner today to All Nippon Airways (ALNPY). The plane will fly to Japan on Tuesday and is expected to go into service in February.

Gold (-GC) settled below $1,600 an ounce for the first time since July 21 after the CME Group raised margin requirements on the metal by 21% and 16% on silver (-SI) and a similar amount for copper (-HG).

The Dow closed up 272 points, or 2.5%, to 11,044. The Standard & Poor's 500 Index ($INX) had risen 27 points, or 2.3% to 1,163. The Nasdaq Composite Index ($COMPX) was up 33 points, or 1.4%, to 2,517.


Article continues below.

The market largely shrugged off a report showing new-home sales fell 2.3% from July to a seasonally adjusted 295,000 units in August. The sales rate was the lowest since February but was up 6.1% from a year ago. The inventory was unchanged at 6.6 months. 


On Tuesday, the market faces the S&P/Case-Shiller Home Price Index report for July and the Conference Board's September Consumer Confidence Index. Walgreen (WAG) and Jabil Circuit (JBL) are the key earnings reports.


Futures trading suggests that the market will open flat on Tuesday. An issue, raised by Toronto money manager Terry Bedford: Apple, Wynn Resorts (WYNN) and Baidu (BIDU), three of the top momentum plays, were lower in a big rally. That's not a good sign. 


Apple drops on iPad concerns, hits Nasdaq

The Nasdaq was held in check for much of the day by weakness in Apple (AAPL), down 0.3% to $403.17, after JPMorgan Securities issued a report saying Apple had cut back orders of parts for iPad tablet devices by some 25%.

The shares had been down as much as 3.2%.


Apple's decline trimmed 1 point off the Nasdaq-100 Index ($NDX). The index, which tracks the largest Nasdaq stocks, was up 27 points, or 1.2% to 2,234.

It was the first time Apple has trimmed orders for iPads, Bloomberg News said, and the immediate market reaction was along the lines of "If Apple is cutting iPad production, business must really be in trouble."

But the stock rebounded from a low of $391.30 after several analysts told The Wall Street Journal they didn't believe the report or thought it was only working with a partial set of data. Plus, Deutsche Bank upgraded the stock, projecting big sales from the iPhone 5.


Amazon.com (AMZN) is expected to enter the tablet wars when it introduces a tablet version of its Kindle e-reader on Wednesday.

Amazon shares were up 2.8% to $229.85 after the company said today its online streaming service will offer Fox movies and television shows under a new content deal, as the Internet retailer continues to bolster its presence in Internet video.


Energy prices -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$80.24

$79.85

-9.65%

-12.19%
(per barrel)











Heating oil (-HO)

$2.8030

$2.8059

-9.11%

10.19%
(per gallon)











Natural gas (-NG)

$3.7820

$3.7010

-6.71%

-14.14%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.5284

$2.5244

-12.10%

3.07%
(per gallon)











Brent crude 

$103.94

$103.97

-9.50%

9.70%
(per barrel)











Retail gasoline

$3.4930

$3.5050

-3.43%

13.70%
(per gallon; AAA)












Gold continues to struggle
Gold had dropped to as low as $1,535 an ounce in overnight trading but settled in New York at $1,594.80, down $45. Gold is down 13.9% on the month but up 12.2% for the year.


Silver settled down 12.5 cents to $29.98 an ounce. It's down about 28% this month and 3.1% for the year. Copper had recovered its early losses and settled up slightly to $3.283 a pound. It's down 22% this month alone and 26.2% for the year.


The SPDR Gold Shares (GLD) exchange-traded fund was down 1.4% to $156.58. The iShares Silver Trust (SLV) ETF was off 0.7% to $29.77. The ETFs are down 11.3% and 26.4% this month, respectively. The gold ETF is still up 13.6% for 2011; the silver ETF is off 1.4%.

Light sweet crude oil, meanwhile, settled up 39 cents to $80.24 a barrel in New York. It's down 9.7% this month and 12.2% this year. Brent crude was up 90 cents to $104.87.


Retail gasoline was at $3.493 a gallon, according to AAA's Daily Fuel Gauge Report, down 1.2 cents from Sunday. The price is up 13.7% this year but down 12.4% from its May 5 peak of $3.985 a gallon.


The dollar was down slightly against the euro. The 10-year Treasury yield rose to 1.904% from Friday's 1.808%.

Berkshire Hathaway will buy back shares
Berkshire Hathaway (BRK.B) was the second-best S&P 500 performer, up 8.6% to $72.09. The company led by Warren Buffett said it will repurchase shares for as much as 110% of their book value, saying the stock is undervalued after falling 17%.

The shares began the day down about 17% on the year.

The other question about the buyback was this: Given Berkshire's size ($382.7 billion in assets as of June 30), is it running out of deals that can add much to earnings? 


The top S&P 500 performer was CONSOL Energy (CNX), up 9% to $37.17. The company said it has sold its royalty interests in a stake in the Marcellus Shale in Pennsylvania and West Virginia to Antero Resources Appalachian Corp. of Denver for $193 million in cash.


Clorox (CLX) declined 4.3% to $66.44 and was the biggest decliner in the S&P 500. Carl Icahn, the bleach maker’s largest investor, withdrew his director slate for the company after concluding that shareholders wouldn’t support the move.

Why the banks are higher
Banks were higher amid speculation that the European Central Bank may restart bond purchases next week and cut interest rates next month.

Deutsche Bank (DB) jumped 12.2% in New York to $35.15. France's Societe Generale (SCGLY) jumped 9.5% to $4.84. Morgan Stanley (MS) climbed 6.5% to $14.61. Goldman Sachs (GS) rose 4.2% to $99.14. Bank of America (BAC) climbed 4.6% to $6.60.

European policymakers are considering expanding a rescue fund known as the European Financial Stability Facility. The move would require approval from Germany, which is a large contributor to the fund. Some officials have proposed that the fund consider buying sovereign debt.

Germany is set to vote Thursday on increasing the EFSF's lending capacity to 440 billion euros ($592 billion U.S.) as well as giving it added powers. German officials and the European Central Bank have been reluctant to let the fund buy debt. Discussions over how best to address Europe's problems could drag on through a meeting among leaders in the Group of 20 in early November.

China, seen as a possible buyer of European debt, sent strong messages in a weekend meeting with the International Monetary Fund that it has a limited risk appetite for additional debt and that it would not bail out Europe.


Short hits from the markets -- New York close



Mon.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.000%

0.00%

-91.67%
5-year Treasury note 

0.906%

0.849%

-4.83%

-55.06%
10-year Treasury note

1.904%

1.808%

-14.16%

-42.39%
30-year Treasury bond

3.002%

2.871%

-16.43%

-31.18%
Currencies











U.S. Dollar Index

79.063

79.228

6.59%

-0.28%
British pound

1.5540

1.5489

-4.38%

-0.42%
(in U.S. $)











U.S. $ in pounds

£0.643

£0.646

4.58%

0.42%
Euro in dollars

$1.35

$1.35

-6.12%

0.89%
(in U.S. $)











U.S. $ in euros

€ 0.741

€ 0.740

6.51%

-0.88%
U.S. $ in yen 

76.63

76.58

-0.15%

-5.82%
U.S. $ in Chinese

6.42

6.38

0.30%

-2.95%
yuan











Canada dollar

$0.971

$0.973

-5.01%

-3.25%
(in U.S. $)











U.S. dollar 

$1.031

$1.028

5.27%

3.36%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,594.80

$1,639.80

-12.93%

12.20%
(per troy ounce)











Copper (-HG)

$3.283

$3.280

-21.92%

-26.17%
(per pound)











Silver (-SI)

$29.9760

$30.1010

-28.23%

-3.11%
(per troy ounce)











Wheat (-ZW)

$6.4825

$6.4075

-18.10%

-18.38%
(per bushel)











Corn (-ZC)

$6.4800

6.385

-15.93%

4.10%
(per bushel)











Cotton 

$0.9843

1.0124

-6.97%

-32.03%
(per pound)











Coffee

$2.3595

2.3145

-18.14%

-1.89%
(per pound)











Crude oil (-CL)

$80.24

$79.85

-9.65%

-12.19%
(per barrel)










 
99Comments
Sep 26, 2011 3:34PM
avatar
My computer does not happen to have difficulties and just posted a negative and gave reasons.  Buffett is doing his buffet thing.  It is Rich Man Poor Man and this 'ol geezer needs to stop manipulation of the market in conjuction with the same 'ol,  He is the ultimate 'raider' in every sense and just needs to go way.  He is worse than Madoff if that is possible....only difference is he does it "legally'. Cough!
Sep 26, 2011 3:29PM
avatar
Rich man poor man.  Nothing could be more obvious with the buffet Buffett.  This is entirely sick for the economy and this ol geezer needs to go down the road.  When and why in the heck does not someone stop this balogna?  Yeah, you know why...the same bedfellows.  It more than sickening.
Sep 26, 2011 3:19PM
avatar
What is the problem if Greece goes belly up?  By the way, yes, they will.  Simple...Spain is shortly behind them, at least based on what I heard and saw a couple of years ago and then Italy would be next. 
Sep 26, 2011 3:15PM
avatar
Anybody want to bet one crisp new dollar bill that the stock market will make it to 11000 today? It will only cost the taxpayer millions and millions to get there..
Sep 26, 2011 3:09PM
avatar

The trouble with Obama is that will never learn anything new. He will continue to repeat the same tired old line that has failed

Sep 26, 2011 2:57PM
avatar

TOTAL MARKET MANIPULATION TODAY...DON'T BE A SUCKER AND GET LURED IN TO BUY BECAUSE THESE GAINS WILL BE DUMPED IN THE NEXT FEW DAYS.

 

Market makes no sense whatsoever today....DOW up 170, but NASDAQ in RED.

 

Don't whine if you get fleeced because you THOUGHT you saw bargains...in the last two months bargains have turned into losses!

Sep 26, 2011 2:52PM
avatar

According to a report on CNN,

The financial problem in Greece cause by years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck.

 

What have they done?

Hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations.

 

Seems interesting?

avatar
Told you guys a couple of weeks ago China was not going to bail out Europe why should they with Europe gone their path to world domination is half way done. The US is self destructing for them also. 

China, seen as a possible buyer of European debt, sent strong messages in a weekend meeting with the International Monetary Fund that it has a limited risk appetite for additional debt and that it would not bail out Europe.
Sep 26, 2011 2:48PM
avatar
I'm an independent too hedonist---what the Republican leadership doesn't seem to get, is by dismissing Cain's win as some sort of fluke,...they're alienating a large block of their own voters . Which is not a wise thing to do in these troubled times.
avatar
It's official -- Euro zone to print more fake monies to get itself out of trouble.

ROFL this is the reason they are in trouble now. Their banks printed 100 times their deposits and now the central bank is going to get in on the leverage action.

Euro zone is bankrupt folks.

(Reuters) - Euro zone officials are working on ways to magnify the financial firepower of the euro zone's rescue fund to fight a sovereign debt crisis more effectively, a senior European Central Bank policymaker said on Monday.

ECB executive board member Lorenzo Bini Smaghi said in New York that European policymakers had already begun discussing the next steps to quell a crisis that threatens to derail a fragile world economic recovery.

The 440 billion euro rescue fund's assets could be used as collateral to borrow from the ECB, making more money available to stop the crisis spreading, but it was up to European Union governments to decide how to do this, Bini Smaghi said.

"I know that people are thinking about these things. They may not be willing to admit it in the public, but they are thinking about these things," he said, citing U.S. programs used to rescue banks in the 2008-9 financial crisis.

"Initially the TARP was used to buy assets and then it was used to recapitalize the banks and it was used to pay TALF, so I think we are now discussing how to do this, how to leverage the money out of the EFSF in a more innovative and efficient way," he told a conference organized by Medley Advisors.

Sep 26, 2011 2:25PM
avatar
The magic number is 11000 and if it cost taxpayer last dime the PPT will spend it all to get back there. The market is manipulated or will be manipulated until the heavy's get rid of there stocks. Then watch the cards come falling down....
Sep 26, 2011 2:20PM
avatar
To Republicans: This is the best you have to offer??! 
Typical Republican Party. Bitch, complain but offer us nothing in candidates. I really don't think
they know what the public is looking for!
Romney looks good compared to the rest of the crowd of no names/no performance. Perry scares the hell out of many.  
He believes in preemptive strikes so I guess we get more debt producing wars that take our young stud military warriors.  
Texas ranks near the bottom in education and health care. 
Perry's performance in job creation is abysmal. Only his oil sector is creating jobs. All other industry sectors are doing badly...so Perry's record on job creation is no better than Obama.


Sep 26, 2011 2:17PM
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Our CIA, is probably behind the military take over in Greece,...whoops, I let it out of the bag, they're probably watching me now.
Sep 26, 2011 2:13PM
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"China...has a limited risk appetite for additional debt and that it would not bail out Europe."
Oh thanks China, BAN CHINESE IMPORTS!
Sep 26, 2011 2:00PM
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Greece may face a total collapse,...does anyone still get sarcasm?,..."Ahww,..that's too bad, I feel so bad for the Greeks."
Sep 26, 2011 1:57PM
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With Cain winning the straw poll in Florida,...this is not liberals that can't stand the traditional republican candidates,...this is Republicans that can't stand them LOLOL, and the leaders of the Repubs,...are still trying to deny what their own members want,..let alone the majority of the american people,---too funny!!!
Sep 26, 2011 1:56PM
avatar
We'll just have to send troops in to quell any uprising.  What else would the world's police force do??
avatar
Didn't happen. In fact, stocks are higher today -- although off their earlier highs -- after tumbling dismally last week. Financial stocks are leading the market higher on hopes Europe can expand the rescue fund for its banks. 

Might as well believe in the tooth fairy or the easter bunny. Greece is headed towards a military dictatorship folks. There is no rescue for Greece in the cards.  The CIA has spoken and so shall it be done.

avatar
May Day May Day -- Greece government to collapse and military to take over. CIA warns.

Considering it's the CIA that sets these military takeovers up it's pretty much a done deal that Greece will become a military dictatorship.

Pretty much this is the road the rest of Europe is headed down along with the US.

The Greek economy may face total collapse, with banks closed and the government unable to pay for basic public services. This is likely to cause massive civil unrest and a collapse of the government. Greece has already seen rioting and the takeover of government offices. The CIA has warned of a possible military coup.
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[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.

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