Dow jumps 337 on housing data, Europe

November housing starts are up 9% from October. Energy and metals stocks lead the market higher. Nike earnings cheer investors; Oracle disappoints. AT&T moves up after T-Mobile breakup.

By Charley Blaine Dec 20, 2011 1:32PM
Charley BlaineUpdated: 11:55 p.m. ET

A big holiday rally erupted today, thanks to a stronger-than-expected report on housing starts and building permits, with stocks seeing their best gains since the end of November.

The Dow Jones industrials ($INDU) rose 337 points and closed above 12,000 for the first time since Dec. 12. The Standard & Poor's 500 ($INX), which looked headed below 1,200 on Monday, hit 1,241. Gold (-GC) moved above $1,600 an ounce, and crude oil (-CL) was trading above $97 a barrel.

The rally came with two big caveats. First, much of the day's impetus was short-covering. The Dow fell 100 points on Monday and had fallen in five of the prior six sessions. Second, volume was light, with New York Stock Exchange volume reaching 932 million shares. That can turn what would otherwise be smallish moves into something much bigger.

It's a sign of the market's wariness that trader Terry Bedford quipped in the midmorning, "If only the market could close in the next 10 minutes."

The Dow closed up 337 points, or 2.9%, to 12,104. The S&P 500 jumped 36 points, or 3%, to 1,241. The Nasdaq Composite Index ($COMPX) added 81 points, or 3.2%, to 2,604. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, jumped 67 points, or 3%, to 2,282.

Article continues below.
Oracle earnings disappoint; Nike cheers
Oracle (ORCL) disappointed investors after the close with earnings after one-time charges of 54 cents a share; Wall Street was looking for 57 cents. Revenue of $8.8 billion was up 2% from a year ago but lower than the expected $9.23 billion.

Moreover, revenue in its Europe, Middle East & Africa region grew to $2.76 billion, up just 0.66% in the quarter and 1.9% from the first quarter. Growth in this Americas region was up 1.8%. Asian revenue was up 8.1%. Asia represents less than 20% of revenue.

While revenue from new licenses was up 2%, revenue from its hardware business -- basically what was Sun Microsystems -- fell 14%.

Revenue overall was up 2%; Oracle had earlier forecast a revenue gain of 5% to 9%. Profit was up 17% overall. 

Shares were off 9.8% after hours to $26.24.

Nike
(NKE) reported $1 a share in earnings in its second fiscal quarter, on revenue of $5.7 billion. That was better than the Street estimate of 97 cents and revenue of $5.6 billion and up from 94 cents and revenue of $4.84 billion a year ago.

Shares rose 3% to $96.31 after hours.

Reporting on Wednesday are Bed Bath & Beyond (BBBY), Carmax (KMX), Herman Miller (MLHR), Steelcase (SCS) and Walgreen (WAG).

The big economic report for Wednesday is the National Association of Realtors' November existing-home sales report, due at 10 a.m. ET. The report will reflect major revisions that are expected to cut reported sales since 2007 by 10% to 15%.

Futures trading suggests a strong open for U.S. stocks on Wednesday. The euro was rising against the dollar as hopes grew that Europe was stabilizing. Fueling the hope: The European Central Bank was preparing to give euro-region banks unlimited three-year loans.

Dow is positive for December
The finish meant that the Dow ended the day up 0.5% for December. The S&P 500 is off 0.5% for the month; the Nasdaq and Nasdaq-100 are down 0.6%.

The market took its cue from Europe, where an auction of Spanish short-term notes went well, and yields fell. Italian bonds gained as the European Central Bank prepares to offer  unlimited three-year loans to the region’s banks, boosting demand for higher-yielding assets.

European stocks were higher.

Crude oil, gold move higher
Crude oil settled up $3.34 to $97.24 a barrel. Brent crude settled up $3.09 to $106.73 a barrel.

Gold settled up $20.90 to $1,617.60 an ounce, with silver (-SI) up 66.2 cents to $29.54 an ounce. Copper (-HG) rose 6.1 cents to $3.3695 a pound.

Interest rates were higher, with the 10-year Treasury yield at 1.925%, up from 1.813% on Monday. The dollar was lower against major currencies.

Apple (AAPL), up $13.74 to $395.95, was a big fuel for the Nasdaq-100, thanks to a patent victory against HTC and Google's (GOOG) Android platform. Apple's gain added nearly 11 points to the Nasdaq-100.

Google was up $8.54 to $630.37 because many analysts don't see Apple's win as much more than an inconvenience.

Energy prices -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Crude oil (-CL)

$97.24

$93.88

-3.11%

6.41%
(per barrel)











Heating oil (-HO)

$2.8494

$2.7804

-5.81%

12.02%
(per gallon)











Natural gas (-NG)

$3.1280

$3.0960

-11.89%

-28.99%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.5787

$2.4891

0.79%

5.12%
(per gallon)











Brent crude 

$106.73

$103.64

-3.43%

12.64%
(per barrel)











Retail gasoline

$3.2130

$3.2210

-2.49%

4.59%
(per gallon; AAA)












Housing is the day's star
The big catalyst appears to have been housing starts, which were up 9.3% in November from October to a seasonally adjusted annual rate of 685,000. Building permits, a better measure of future activity, were up 5.7% to a seasonally adjusted 681,000 units.

Most of the gain for starts and permits came in multifamily construction, up 32.2% from October and up 181% from November 2010. The reason is that many people are choosing to rent either because they don't want the risk of homeownership or can't qualify for a mortgage.

The new data follow a report saying homebuilder sentiment rose for the third consecutive month in December. The National Association of Home Builders said Monday its housing market index rose 2 points to 21, from a revised 19, in November.

But don't get too excited. Housing starts may end the year at about 610,000 units. That will be the third-worst performance since the government started collecting starts data in 1959.

Nonetheless, homebuilder shares are nicely higher. The Philadelphia Housing Sector Index ($HGX) was up 5 points to nearly 100 and is up 31% since bottoming in October. Pultegroup (PHM) rose 58 cents to $6.17. Ryland (RYL) added $1.10 to $15.30. D.R. Horton (DHI) jumped 67 cents to $12.43.

The winners (for today) from the AT&T/T-Mobile breakup
First, there's Sprint Nextel (S), although many analysts believe it will ultimately  be a loser. One reason is that Sprint has made a huge investment in obtaining the iPhone from Apple that will take years to pay off. Nonetheless, Sprint was up 20 cents to $2.36.

Next: Leap Wireless (LEAP), up 58 cents to $8.33, MetroPCS (PCS), up 34 cents to $8.29, and CenturyLink (CTL), up 98 cents to $35.91. All offer cellphone service around the country. CenturyLink took over Qwest last year.

Last:Cellphone tower operators.These are winners because the pace of consolidation will slow, and companies can improve service by adding towers, not just new technology. Crown Castle International (CCI) rose $1.58 to $44. American Tower (AMT) added $2.62 to $59.80.

A very broad rally
The rally was quite broad. All 44 domestic indexes that Market Dispatches tracks were up 1% or more, led by indexes tracking networking, steel, oil services stocks, housing and semiconductor stocks.
 
All 30 Dow stocks were higher, including AT&T (T), which scrapped a $39 billion acquisition of T-Mobile USA on Monday. AT&T was up 38 cents to $29.12.

Caterpillar (CAT), Chevron (CVX), IBM (IBM), United Technologies (UTX) and 3M (MMM) contributed about 136 points to the Dow's gain. Caterpillar, JPMorgan Chase (JPM) and Home Depot (HD) were the biggest percentage gainers.

But it was a sign of the market's strength that the weakest member of the Dow today was Procter & Gamble (PG), which finished up 84 cents to $65.79.

Meanwhile, some 490 S&P stocks were higher, along with 98 Nasdaq-100 stocks.

Pultegroup and Juniper Networks (JNPR) were the top S&P 500 stocks. Red Hat (RHT), Electronic Arts (ERTS) and General Mills (GIS) were the laggards.

Red Hat, General Mills and cruise-ship operator Carnival (CCL) reported disappointing results.

First Solar (FSLR), up $2.38 to $32.88, and Nuance Communications (NUAN), up $1.67 to $25.63, were the top Nasdaq-100 stocks. Research In Motion (RIMM), down 37 cents to $12.52, and Green Mountain Coffee Roasters (GMCR), down 28 cents to $45.69, were the laggards.

Trucking manufacturer Navistar International (NAV) jumped $2.37 to $38.91 on better-than-expected earnings.

Financial stocks rallied. Bank of America (BAC), which closed below $5 on Monday for the first time since 2009, was up 18 cents to $5.17.

Short hits from the markets -- New York close



Tues.

Mon.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0100%

0.110%

0.00%

-91.67%
5-year Treasury note 

0.859%

0.806%

-9.77%

-57.39%
10-year Treasury note

1.927%

1.813%

-6.82%

-41.69%
30-year Treasury bond

2.932%

2.801%

-4.25%

-32.78%
Currencies











U.S. Dollar Index

80.273

80.807

2.27%

1.24%
British pound

1.5588

1.5649

-0.61%

-0.11%
(in U.S. $)











U.S. $ in pounds

£0.642

£0.639

0.61%

0.11%
Euro in dollars

$1.30

$1.30

-2.96%

-2.52%
(in U.S. $)











U.S. $ in euros

€ 0.759

€ 0.748

1.98%

1.52%
U.S. $ in yen 

78.06

77.63

0.31%

-4.06%
U.S. $ in Chinese

6.38

6.36

-0.10%

-3.51%
yuan











Canada dollar

$0.974

$0.000

-0.75%

-2.95%
(in U.S. $)











U.S. dollar 

$1.027

$1.020

0.73%

3.02%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,617.60

$1,596.70

-7.58%

13.80%
(per troy ounce)











Copper (-HG)

$3.370

$3.309

-5.76%

-24.23%
(per pound)











Silver (-SI)

$29.5360

$28.8740

-9.96%

-4.53%
(per troy ounce)











Wheat (-ZW)

$6.0775

$5.9975

-1.02%

-23.48%
(per bushel)











Corn (-ZC)

$6.0700

$6.01

-0.16%

-2.49%
(per bushel)











Cotton 

$0.8664

0.8672

-4.70%

-40.17%
(per pound)











Coffee

$2.2280

2.1945

-5.95%

-7.36%
(per pound)











Crude oil (-CL)

$97.24

$93.88

-3.11%

6.41%
(per barrel)










 

178Comments
Dec 20, 2011 3:10PM
avatar

Wow...so today all is good on Wall Street... I guess they needed to "pad their bonuses" a bit more with manipulated information.  After the Holidays watch the Market tumble quicker than a roller coaster at Great Adventure.  Since they like manipulating OIL so much they should add some to their eggnog!!!!  Happy Holidays you bunch of thieves on Wall Street!!!

Dec 20, 2011 3:06PM
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So new HOMES are being built....Whoopee doo

 

I'm still waiting for the 5 foreclosure homes in my neighborhood to sell?

Dec 20, 2011 2:19PM
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Red lipsThe Fix is in the Mix-Everyone complains about Big Money control of our government, we now have the legislation in the works to change this forever. The Saving American Democracy Amendment, purposed by Sen. Bernie Sanders earlier this month. The Amendment states that Corporations are not persons with constitutional rights equal to real people, Corporations are subject to regulation by the people, Corporations may not make campaign contributions, Congress and States have the power to regulate campaign finances. This Amendment is our chance to take back our government from the Corporate Aristocracy Rule and give common Americans a voice in Washington. Go to the web site and sign the petition and lets get a vote on the floor of congress.Clock
Dec 20, 2011 1:49PM
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Can't ya'll see what's going on here?  This is the LAST chance for the "Santa Rally" so that's the ONLY reason why stocks are up so high.  It won't matter after Christmas, it'll be too late for "Santa" to show up.  At this rate, I would NOT be surprised if the stocks went up another 100 points to finish around 390 points to get back all the gains that were lost not too long ago.

 

Edit:  As of 1:10pm, 334 points and rising.  Did I not call the prediction? 

 

avatar
Good news All the politicians who invest in oil , crude is up . Ohh sorry little people this always translates to higher gas and fuel oil prices .
Dec 20, 2011 3:22PM
avatar
All of this elation, and the fundamentals haven't changed a bit.

No new houses are being built, except for apartment buildings.  Without people getting into their own homes, the housing market won't recover, and if there is no recovery, then the spending that comes from homeowners won't be there to stimulate the economy.  Housing is about 1/4 to 1/3 of what drives spending, and the spending won't be there until banks start lending, but, they're afraid of doing so, because, they could get burned again, by unqualified "buyers" and more government intervention, like what happened with the Community Reinvestment Act, and Freddie Mac and Fannie Mae.  Nope!  The stock market is fundamentally disconnected from the reality of a bad economy. 

People are still getting laid off, and others are collecting unemployment for 2 years, and once those 2 years are up, they'll join the countless millions who have given up looking for work, because, the jobs aren't being created or are being lost because of business closings.  The government unemployment rate is "officially" 8.6%, and the underemployment rate is around 18.7%, and if one takes into consideration those that have given up on finding a job, the total unemployment rate is closer to 22-25%, which is depression era unemployment.  In fact, if the Bureau of Labor Statistics (BLS) were to be keeping track of unemployment using the same methods for calculating that were done during the great depression, we'd have an "official" unemployment rate of around 25%, which is depression era type numbers.  

Then there are those who keep hoping that a miracle will happen in Europe, but economically, the European theater is a disaster, and no amount of hoping and no amount of government intervention and no amount of rescue packages are going to change the fact that, nothing but a complete makeover of the economic systems will have any effect.

We can continue to be in denial, in the U.S. and in Europe, or we can declare that, what's been done in the past, and what's being done now, cannot continue, and we need to start over.  If we don't start over soon, then we'll have to start over anyway, because, we won't have any choices, because, those once great economies will have collapsed.

Dec 20, 2011 2:10PM
avatar
I'm not buying it. Whoever believe this bs deserves to lose their money.
Dec 20, 2011 3:07PM
avatar
Just because their building them don't mean their selling them.
Dec 20, 2011 3:05PM
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and on all that news crude oil makes a big jump in price!!!! give us some credit here guys we are not that stupid... you are going to have to come up with a new act for your dog and pony show
Dec 20, 2011 2:02PM
avatar

let's see- housing starts went up for multi family units because people can not afford single family homes and also people bought more bad debt in Spain but at a higher interest---SO the market goes up.

Nothing has fundamentally changed for the last several days. Interest rates are still manipulated by the governments. Debt is still terrible in countries. None of the market movement is due to any companies results.

 No wonder people have lost faith in the market. It;s been a giant crapshoot for the last 10 years and we still hear- invest in the market because of the long term results. What is failed to be mentioned is that the circumstances of the world economy are different then any time in the past so the future is even more unpredictable. However people with jobs in the market will not mention that.

Dec 20, 2011 3:13PM
avatar
Well the stocks go up and actually have stayed up yet  too many people have no jobs,are losing their homes,and need help just to buy food.It doesnt take a rocket scientist to figure out where the jobs have gone,and how corporations are getting rich.America:give corporations huge tax loopholes so they can afford to hire workers in China and India,which will make it possible for these corporations to make huge profits so they can continue to lobby congress which keeps the republicans pockets lined.And it goes round and round.We have a system of government that promotes corruption.

Dec 20, 2011 5:28PM
avatar
Now they can all go on vacation.

Nothing has changed to make any of this positive news happen in real terms.

Look around you and tell me your friends ,business partners, are doing better.
What projects and new work is coming there way in 2012?
Dec 20, 2011 3:21PM
avatar

"and then magically at the end of the year we are told housing is booming"

 

 

you said it all in this sentence....WE ARE TOLD...as in whatever LIES the financial industry and media can come up with to spark rallys.

 

We are not fooled....Stock market a TOTAL JOKE! 

Dec 20, 2011 1:59PM
avatar

Good news for the stock market.  Bad news the next time you go to purchase gas for your car. 

I hope everyone realizes who controls these market swings and where the information comes from that makes it happen. 

Dec 20, 2011 3:02PM
avatar
the only houses I see being built in my area are those built by low paid ILLEGALS and those are far and few in between all the empty and forclosed homes WHY ? because THE GREAT DEPRESSION continues ,THATS WHY
Dec 20, 2011 2:55PM
avatar

What a bunch of Horse Hockey!  The market will stay high just long enough for the small investor to get sucked in by the hype, then the big sell off and profit taking. Screwing the little guy.

 

Why the market is taking such big jumps on such feeble news is beyond me ----  unless it's being manipulated, which we all know it is.

Dec 20, 2011 2:43PM
avatar
Embarrassed New houses aren't being built but new apartments are for those being evicted.
Dec 20, 2011 5:28PM
avatar

These news commentators must believe the slogan "see no evil, hear no evil"....  Yep, convince people to be "optomistic" while ignoring the testimony of their own senses.  That makes a lot of sense....  And so if people buy into this BS, and try buying a house, or a mortgage, they can scarcely afford, and with the job market as dismal as it is, and wages as flat as they are; we all know where that will go.

 

As PT Barnum once said, a sucker is born every minute...  Along with something perhaps more investors aught to keep in mind, caveat emptor, or let the buyer beware....  Now would be a good time to be paying down those credit card balances; not running up more debt on the MERE HOPE that things won't be as bad as they appear.....

Dec 20, 2011 5:10PM
avatar
UNEMPLOYMENT DOWN ,FORCLOSURES DOWN , HOME CONSTUCTION UP , WAGES UP , IF YOU BELIEVE THIS BS JUST LOOK AROUND 5 YEARS IN A RECESSION NOW A GREAT DEPRESSION  WHICH IS ONLY GOING TO GET WORSE THE NEXT 5 YEARS
Dec 20, 2011 2:17PM
avatar
same old bull sh-- , another day in wonderland  SOMEDAY  people will wise up an see wall street for what it is ??  CONGRESS INACTION !! LOL see even they get in on the jokes we put in office.
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