Stocks see their best finish in 6 months

The S&P 500 closes above 1,300 for the first time since July on gains in tech, bank and housing stocks. Goldman Sachs rises on an earnings beat. The Keystone XL pipeline route appears doomed. EBay, F5 Networks results impress.

By Charley Blaine Jan 18, 2012 2:33PM
Charley BlaineUpdated: 9:44 p.m. ET

Stocks finished at their best levels since late July today as energy,  technology, bank and homebuilding stocks put in solid gains.

The Standard & Poor's 500 Index ($INX) closed above 1,300, a key technical level, for the first time since July 28. The index has been flirting with 1,300 since late last week, and there's the potential for gains to 1,320.  The Dow Jones industrials ($INDU) were briefly up 100 points before finishing with a gain of 97 points at 12,579.

Technology shares were boosted by a sizable rally in semiconductor stocks, led by Linear Technology (LLTC), up $3.45 to $33.32 on bullish guidance. Apple (AAPL) hit an all-time high of $429.27 before finishing at $429.11 up $4.41. Financial stocks rose after Goldman Sachs (GS) beat Street estimates. And homebuilders moved higher on a survey showing rising builder confidence.

Energy shares were mostly higher, although TransCanada (TRP) fell 33 cents to $41.41 after reports surfaced that the Obama administration had rejected the company's application for the Keystone XL pipeline from western Canada to the U.S. Gulf Coast. However, the stock has come back from a 4.8% decline on news the administration reportedly will allow TransCanada to reapply after it develops an alternate route through the sensitive habitat of Nebraska’s Sand Hills.

The Dow's 97-point gain took the blue chips to their best close since July 25. The S&P 500's close, gaining 14 points to 1,308, was its best since July 26. The Nasdaq Composite Index ($COMPX) closed up  42 points to 2,770, also its best close since July 26. 

Article continues below.
The Nasdaq-100 Index ($NDX) was up 33 points to 2,426, thanks to that strength in semiconductor stocks and in big-caps like Apple, Oracle (ORCL), Amazon.com (AMZN) and Cisco Systems (CSCO).

Also helping the market: The euro moved higher against the dollar on continuing news reports that Greece may cut a deal with private investors on restructuring its debt by the end of the week.

The rally pushes the January gain for the Dow to above 3%, with the S&P 500 up 4% and the Nasdaq up 6.3%. The Dow has risen in seven of 11 trading days this month. The S&P 500 and Nasdaq have seen gains on nine of 11 days.

Since the market's intraday low on Oct. 3, the Dow is up 20.9%; the S&P 500 is up 21.7%, with the Nasdaq up 20.5%.

The Dow is now within 2 percentage points of its 2011 high of 12,810, set on April 29. The S&P 500 is down 4.1% from its close of 1,364 on April 29, with the Nasdaq off 3.6% from its April 29 close of 2,874.

Futures trading suggests a modestly higher open on Thursday. There will be lots for investors to think about: the weekly reports on jobless claims and natural gas inventories, housing starts and the Consumer Price Index.

Bank of America (BAC), Morgan Stanley (MS)and American Express (AXP) are among financial companies reporting results. Google (GOOG), Intel (INTC), IBM (IBM) and Microsoft also report.
EBay, F5 earnings cheer investors
After the close, eBay (EBAY) shares moved 1.4% higher to $30.75 after earnings beat Street estimates. But the company warned that first-quarter results would be lower than expected.

EBay earned $1.98 billion, or $1.51, up from $559 million, or 42 cents a share a year ago. Revenue grew 35% to $3.38 billion. Much of the profit gain was due to eBay's sale of Skype to Microsoft (MSFT). (Microsoft is the publisher of MSN Money.) Adjusted for that gain, the company earned 60 cents a share, ahead of the Street estimate of 57 cents.

EBay expects to earn 50 to 51 cents a share in the first quarter, with revenue at $3.05 billion to $3.15 billion.

Separately, F5 Networks (FFIV) shares were up nearly 7% to $115.97 after fiscal-first-quarter adjusted earnings came in at $1.03 a share; analysts had expected $101 a share. Revenue jumped 19.9% to $322.4 million. The company guided higher for the fiscal-second quarter.

Crude oil moves lower; gold moves up
Crude oil (-CL) in New York settled down down 12 cents to $100.59 a barrel after rising to as high as $102.

Gold
(-GC) settled at $1,659.90 an ounce, up $4.30. Gold had hit a high of $1,662.90. Silver (-SI) added 40.8 cents to $30.54 an ounce, while copper (-HG) rose 2.3 cents to $3.7525 a pound.

Despite the dollar's decline against the euro, interest rates were little changed. The 10-year Treasury yield was at 1.897%, up from Tuesday's 1.85%.

A big gain in homebuilding shares
Homebuilding stocks were higher today after the National Association of Home Builders said builder confidence was up for the fourth month in a row and was now at its highest level since May 2007.

The index hit 25, which is actually 65% below its 2005 peak and about half of its long-term average since the survey was started in 1985. But the index has been steadily moving higher, especially since October, reflecting a sense that buyers are out looking and feeling better about buying.

The Philadelphia Housing Sector Index ($HGX) climbed nearly 3 points to 117. The index is up 14.2% this year after rising 8% in all of 2011. PulteGroup (PHM) jumped 44 cents to $7.94. Ryland (RYL) added 97 cents to $18.49. Toll Bros. (TOL) rose $1.07 to $23.49.

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$100.59

$100.71

1.78%

1.78%
(per barrel)











Heating oil (-HO)

$3.0134

$3.0372

3.40%

3.40%
(per gallon)











Natural gas (-NG)

$2.4720

$2.4880

-17.30%

-17.30%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.8254

$2.7713

6.32%

6.32%
(per gallon)











Brent crude 

$110.66

$111.53

3.05%

3.05%
(per barrel)











Retail gasoline

$3.3780

$3.3810

3.33%

3.33%
(per gallon; AAA)












Apple gains a spot in GE
Apple shares moved higher after a Wall Street Journal report that more than 1,000 employees at General Electric (GE) have opted to use Macintosh notebook or desktop computers.

GE has started a pilot program to let employees choose what computers they want. And, the Journal said, GE expects more employees to choose Macs.

Still, more than 330,000 GE employees use computers operating with Microsoft's Windows operating system.

GE hasn't trumpeted the Apple option for computers and laptops internally. So, employee awareness is limited. But staffers across GE businesses are eligible as long as there aren't security clearance issues, such as devices for defense work, or big compatibility problems with needed software.


Microsoft was off 2 cents to $28.23.


Apple shares have risen nearly $60, or 16%, since closing at $369.80 on Oct. 7. The company reports fiscal-first-quarter earnings after Tuesday's close.


Goldman Sachs gives financials a boost
Goldman Sachs reported fourth-quarter earnings of $1.84 per share, topping the $1.24 Street estimate. Revenue, however, of $6.05 billion was less than expectations for $6.54 billion.

The shares surged $6.63 to $104.31 on the report and helped other big banking companies to move higher, including Bank of America, Morgan Stanley and JPMorgan Chase (JPM).

US Bancorp (USB) shares were up 31 cents to $29.08; the bank had a 39% increase in lending and a reduction of its loan-loss reserve. The reduction flows to the bottom line as profit.

Bank of New York Mellon (BK) and Northern Trust (NTRS) were lower on weaker-than-expected results. Northern Trust is cutting 700 jobs out of 14,000 worldwide. The company had said cuts were coming as early as September. At issue: Low global interest rates are eating into profit.

Leaders and laggards

Linear Technology pushed higher after the maker of integrated circuits said third-quarter revenue was as much as $317.8 million, compared with the average analyst estimate of $302.5 million.

Majesco Entertainment (COOL) plunged 81 cents to $2.17. The video game publisher said earnings in 2012 will be no more than 35 cents a share excluding some items, compared with the average of two analyst estimates of 46 cents.

MGM Resorts International (MGM) climbed 48 cents to $12.73. The casino company was raised to "neutral" from "underperform" at Credit Suisse, which cited improving trends in Las Vegas.

Industrial production gains; inflation is nonexistent
December industrial production rose 0.4%, a tenth below expectations, but capacity use was in line, rising to 78.1% from 77.8%.

The details were much better than the headline, which was depressed by a 2.7% plunge in utility output, thanks to the exceptional, unseasonably warm weather across much of the country.

Manufacturing, by contrast, jumped 0.9%, and for once the gain was not concentrated in autos, up only 0.6%.

The Bureau of Labor Statistics said producer prices, the amount wholesalers charge buyers, dipped 0.1% in December, keeping inflation fears at bay. Analysts expected prices to rise 0.1%, according to Zacks.com.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0300%  0.030%

200.00%  200.00%
5-year Treasury note 

0.804%  0.778%

-3.13%  -3.13%
10-year Treasury note

1.897%  1.850%

1.39%  1.39%
30-year Treasury bond

2.954%  2.891%

2.25%  2.25%
Currencies











U.S. Dollar Index

80.822  81.429  0.37%  0.37%
British pound

1.5411  1.5342  -0.82%  -0.82%
(in U.S. $)

          
U.S. $ in pounds

£0.649  £0.652  0.82%  0.82%
Euro in dollars

$1.28  $1.27  -0.98%  -0.98%
(in U.S. $)

          
U.S. $ in euros

€ 0.779  € 0.785  0.98%  0.98%
U.S. $ in yen 

76.98  76.83  -0.15%   -0.15%
U.S. $ in Chinese

6.34  6.31  0.15%  0.15%
yuan

            
Canada dollar

$0.000  $0.000  -100.00%  -100.00%
(in U.S. $)

          
U.S. dollar 

$1.016  $1.015  -0.45%  -0.45%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,659.90

$1,655.60

5.94%

5.94%
(per troy ounce)











Copper (-HG)

$3.753

$3.730

9.21%

9.21%
(per pound)











Silver (-SI)

$30.5430

$30.1350

9.41%

9.41%
(per troy ounce)











Wheat (-ZW)

$5.9225

$6.0475

-9.27%

-9.27%
(per bushel)











Corn (-ZC)

$5.9350

$6.040

-8.20%

-8.20%
(per bushel)











Cotton 

$0.9730

0.9771

6.13%

6.13%
(per pound)











Coffee

$2.2785

2.281

-0.78%

-0.78%
(per pound)











Crude oil (-CL)

$100.59

$100.71

1.78%

1.78%
(per barrel)










 

60Comments
Jan 18, 2012 2:43PM
avatar
Oh yeah....Obama set to reject pipeline today... That should really help the economy NOT!!!
Jan 18, 2012 4:58PM
avatar

The problem with america is the number people who work for a living are out numbered by those who vote for a living.

Jan 18, 2012 4:55PM
avatar

Our dear leader has done it again!

Markets up, unemployement down and the housing market is up!

Happy days are here again!!

Aren't we lucky to have such leadership?

 

if you believe all this hype and BS coming from the Obama controlled media, I have a bridge to sell you!

 

 

 

Jan 18, 2012 3:33PM
avatar
Yep, Obama to reject the pipeline.  Democrats are the party of special intersts and screw the American people.  Irrational environmentalists are one special interest.  There are 50 pipelines crossing Nebraska and somehow this one will be a disaster?  Rabib and irrational and yet the Democrats will screw 20,000 to 50,000 Americans out of job and the associated wealth creation!  That is your party.  Heck it works best for the Democrats if they distroy the economy and force everyone to beg for hand-out which the Democrats are all too happy to grant while they vacation in Hawaii for three weeks, eat lobster, etc.  Wake up people.
Jan 18, 2012 5:14PM
avatar

Hmmm...  I hope there is an investigation into who leaked the no pipeline deal...look at all those March contracts...   Someone sure made a lot of huge bets on oil and gasoline increasing in price come summer the last couple days...  

 

Someone please wake up the Reguglators at the SEC...  Tell them to stop watching porn and follow the money.  Someone at the White House had to have leaked this or traded on it...

Jan 18, 2012 4:34PM
avatar
With real Unemployment at 22.4 percent (shadow stats) everything is great; I talk to real people on the street and they don't have a job and the people that do are broke with inflation hitting over 10 percent can't put food on the table and our welfare president putting more people on food stamps he is out playing golf...times are good people!
Jan 18, 2012 3:11PM
avatar
Another rally based on "Hype, Hope and Manipulation".  Believe it if you want but I'm not buying it. 
Jan 18, 2012 6:28PM
avatar

Much of the oil that remains in the US is on US government lands.  To me that means we the people own it and US means us.  To truly benefit our country by using our commonly owned oil reserves, it would be prudent for the US government, when extending oil leases to private companies to have a caveat:  If you extract oil from public lands it cannot be sold abroad until the gas price at the pump and energy prices for industry are at a low, stipulated price (say $2 a gallon).  Until then, all oil and natural gas in OUR common possession should be used for our good first.  That would quickly mean we would have NO dependence on Foreign oil at all.  Some of the big companies would balk at such a lease agreement, but I know several mid sized companies that would jump at the chance.  Of course our corrupt Congressional relationship to the big oil companies will never allow this unless we the people make a very great deal of noise.

 

Once we are afloat in oil and natural gas profits, we will be more like a certain European country which has such a good economy from mineral uses that they can provide all kinds of services because of the wealth brought in from oil--unemployment zilch--without a deficit--in fact with a surplus. 

Jan 18, 2012 5:10PM
avatar

TruthseekerinVT...

 

Illinois is far worse than the deficit indicates.  They have a huge pension shortfall as well...  Within 2 years they will have ZERO pension money in the kitty to pay out and the checks will stop.   It remains to be seen how the Federal Pension insurance will bail out states that default.   And Illinois just doubled their income tax...  As well as their corporate tax as well.  The game the big companies play in Illinois is 'Threaten to leave'.... Sears, The CBOE, Abott Labs, Motorola, etc have had the tax recinded.  Only small business will wind up paying the new rate, if they don't flee first...   Check out Texas...ZERO corporate income tax v. Illinois 7%...Thats a 7% jump in PROFITS by leaving....  Run bfore they tax you some more...

Jan 18, 2012 4:35PM
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"Operation Perfect Hedge" .. so far the FBI has arrested 60 people on hedge fund insider trading, with some big corporate names and faces.  money manipulators
Jan 18, 2012 4:30PM
avatar

BOOMERS- Don't pass this up, sell now, and invest in a local credit union, or local bank. This is not your market anymore.

Jan 18, 2012 5:41PM
avatar

Didn't the economy start to pick up a little in Sept/Oct when gas prices started going down a good bit?  Hmm...

 

Now they're going back up.

Jan 18, 2012 4:17PM
avatar

That's just great....Obumkin is going to reject the pipeline.  Once again this Administration has gone out of its way to hurt the economy by the "non-creation" of jobs related to the pipeline (line workers, engineers, etc.) as well as all the local economies that would benefit from these pipeline employees going to restaurants, stores, buying a house, etc..  In addition we send a message overseas that we are ready to go with our own "Oil" & cutting them down or out of the picture with dependency on them.  But noooo....we don't want to do that because Wall Street & our crooked politicians are making too much money on the "manipulating" & "insiders info"  that is currently going on.  Like Obumkin said to all of us in 2008..."CHANGE" is what we need.  I could not agree more as 4 more years of him will put the USA out of business.  CHANGE is a must in November's election!!!

By the way...go thru parts of Texas or the Gulf of Mexico & there are pipelines & refineries all over the place  so why is one more going to hurt!!

Jan 18, 2012 4:50PM
avatar
I will never get burned again by these fake rallies.....sell, sell, sell!!!
Jan 18, 2012 5:05PM
avatar

What refineries in the midwest?   Who you crapping?

 

 

As to the laughter  you hear, thats the Republicans laughing at the Unions that support Mr. Obama...  So much for needing any union help! 

 

Looks like your man just sold you out!

Jan 18, 2012 5:03PM
avatar

The following are the top 10 states and their budget shortfalls for 2011:

 

IL: 13.5 Billion

NH:10.7 Billion

NC: 5.8 Billion

CT: 5.1 Billion

WA: 4.6 Billion

AZ: 3.3 Billion

NV: 1.8 Billion

ME: 940 Million

NH: 365 Million

VT: 338 Million

 

Total: 46.5 Billion!!!  Don't worry though because according to all the "experts" things are looking brighter, housing is up, consumer confidence is up etc. etc.  Who cares if these states or our government can pay their bills or not...it really doesn't matter does it??  Also..as long as China and Europe are OK then all is well in the world so let's not worry about a 46.5 billion deficit just as long as Wall St keeps humming along!!!!

Jan 18, 2012 6:11PM
avatar
Island with a palm treeMirage, you foolishly ask the question what mid  west refineries, these are just a few expanding at this moment to handle the glut of oil from Canada and Dakota- Montana fields, BP Whiting IND, Concoco Phillips wood river ILL, Marothon Robinson ILL, Husky Lima Ohio, BP Toledo Ohio, Marothon ST Park Mich, Marothon Detroit Mich.,Murphy Superior Wis. By expanding these and dozens of others we are creating thousands of new jobs in the United States. I don't think though I may be wrong that we'll be sending refined gas to Europe from the Gulf coast, but the oil will go straight to tankers and only the Big Oil Tycoons will profit not the American Heart Land.Broken heart
Jan 18, 2012 5:35PM
avatar

Chilly Doug,

 

We need more perfect operations. 

 

Former Goldman Sachs board member Rajat Gupta, right, is one of two dozen people charged
Too bad these bastards, will only get a slap on the wrist or at worst a relatively short time at some country club "jail" that was built with our tax dollars.  They should have that SOB sweeping the streets to earn his room and board.  Then, what do you expect when the congress bets on insider trading all the time.  Must be why there is such a fight to get elected and sit on that lily hey?
Jan 18, 2012 4:12PM
avatar
Can some one tell me what happened with the little euro game that was being played the last 6 mo.? Market up 200 points one day .Down 400 points two days later. Seems that game was milked to death.
Jan 18, 2012 4:58PM
avatar
Open-mouthedObama saves American jobs again, by not running a oil pipe line to the gulf so Big Oil can maximize profits selling to Europe, we can expand the dozens of mid west refineries from Minnesota to Oklahoma and keep the oil here which will reduce prices and make the United States more self sufficient. By cutting gas prices here we can put billions back in American pockets and create a economic boom for us and not just the Oil Tycoons.Party
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