Dow up 107 as rally continues

The blue chips see their best 2-day gains since September after a report on pending home sales surprises. Retailers report decent November sales. Gold briefly nears $1,400. Krispy Kreme shares soar.

By Charley Blaine Dec 2, 2010 2:44PM
Charley BlaineUpdated: 8:38 p.m ET

One of the biggest questions after Wednesday's big rally was if it had enough strength to continue.

It had plenty of strength today, thanks to a stronger-than-expected report on pending home sales and decent reports on retailers' November sales. The report was another bit of evidence that the economic recovery is gaining strength. Another signal of strength: Crude oil hit a 2-year high.

Today's rally also built on gains in Europe as the European Central Bank extended an emergency loan program. Stocks rose sharply in Britain, Germany and Spain. The dollar fell, and gold came very close to reaching $1,400 an ounce.
The Dow Jones industrials ($INDU) closed up 107 points, or 1%, to 11,362. The Standard & Poor's 500 Index ($INX) jumped 15 points, or 1.3%, to 1,222, and the Nasdaq Composite Index ($COMPX) added 30 points, or 1.2%, to 2,579.

The Dow's two-day gain of about 356 points was its best two-day performance since a 382-point gain over Aug. 31 and Sept. 1. The streak looks like it will be tested on Friday. Futures trading suggests stocks will open slightly lower.

The market's gain also pushed commodity prices higher, and bond yields rose as stocks pulled money away from bonds.

Gold for February delivery settled up $1 to $1,389.30 an ounce, after rising to as much as $1,399.70.

Crude oil settled at $88 a barrel, up $1.25 from Wednesday and its highest close since Oct. 8, 2008. Crude is up nearly 10% since the end of September and nearly 11% on the year.

The 10-year Treasury ended the day at 3%, its first close at 3% or higher since July.

The dollar was lower against the euro, the Japanese yen and the Canadian dollar.

The market was led by financial stocks after Goldman Sachs raised its rating on them to "overweight" and predicted a 20% rally in the S&P 500 by the end of next year as the economy improves.

JPMorgan Chase (JPM), Citigroup (C) and Bank of America (BAC) were listed among Goldman's "top ideas," Bloomberg News said. JPMorgan was up 3% to $39.31. Bank of America added 3.5% to $11.68, and Citigroup rose 2.8% to $4.42. Wells Fargo (WFC) added 4.5% to $28.78.

Also stronger were homebuilding, steel and commodity stocks.

Home Depot (HD)  was the Dow leader, up 5.5% to $33.36, followed by Bank of America. Freeport-McMoRan Copper & Gold (FCX) added 2% to $107.64, thanks to higher gold and copper prices.Krispy Kreme Donuts

And remember Krispy Kreme (KKD), once one of the hottest stocks around? Shares were up 20.8% to $7.44 today -- after hitting a 52-week high of $7.47. The company reported an 8% revenue gain to $90.2 million. Analysts had expected $88.6 million. Earnings were $2.4 million, or 3 cents a share; analysts had expected a loss of a penny a share.

Energy prices -- New York close
 

Thur.

Wed.

Month chg.

YTD chg.
Crude oil 

$88.00

$86.75

4.62%

10.89%
(per barrel)











Heating oil

$2.4546

$2.4056

5.94%

16.02%
(per gallon)











Natural gas 

$4.3430

$4.2690

3.90%

-22.06%
(per mil. BTU)











Unleaded gasoline

$2.3553

$2.3004

3.98%

14.73%
(per gallon)











Retail gasoline

$2.8790

$2.8640

0.88%

9.09%
(per gallon; AAA)












Pending home sales surprise
Pending sales of U.S. existing houses unexpectedly jumped by a record 10% in October, indicating the industry at the center of the last recession is stabilizing as the job market improves.

The increase in the number of Americans signing contracts to buy previously owned homes followed a 1.8% drop in September, the National Association of Realtors said today.

Combined with figures showing chain-store sales topped estimates last month, the reports added to evidence the world’s largest economy is strengthening. Ryland

Cheaper borrowing costs, lower prices and more jobs may entice homebuyers in coming months, helping the real-estate market regain its footing after the end of a tax credit caused demand to slump.

The report pushed homebuilding shares higher. Pultegroup (PHM) was up 3.2% to $6.75. Ryland (RYL) added 5.1% to $15.81. The Philadelphia Housing Sector Index ($HGX) was up 2.7% to 102.

Retailers see sales gains in November
In another bit of evidence that the recovery is looking stronger, retailers generally reported sales gains in November that beat Street estimates. Abercrombie & Fitch

The gains didn't necessarily boost stock prices, except in one spectacular case. Abercrombie & Fitch (ANF) sales were up 22%, compared with consensus estimate of a 6.4% gain. The stock was up 11.1% to $56.02, tops among S&P 500 stocks.

Companies also beating Street estimates included Limited Brands (LTD), a 10% sales gain; Target (TGT), up 5.5%; Macy's (M), up 6.1%; and Nordstrom (JWN), up 5.1%.

Surprisingly, Macy's shares were off 1% to $25.54. Nordstrom was off 3% to $42.14.

Short hits from the markets -- New York close
 
  Tues.

Mon.

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.150%

0.160%

-6.25%

200.00%
5-year Treasury note 

1.675%

1.622%

14.41%

-37.64%
10-year Treasury note

3.000%

2.964%

7.26%

-21.94%
30-year Treasury bond

4.266%

4.237%

4.00%

-8.08%
Currencies











U.S. Dollar Index

80.336

80.762

-1.15%

2.71%
British pound

$1.5615

$1.5618

0.30%

-3.47%
(in U.S. $)











U.S. $ in pounds

£0.640

£0.640

-0.30%

3.59%
Euro in dollars

$1.323

$1.313

1.83%

-7.70%
(in U.S. $)











U.S. $ in euros

€ 0.756

€ 0.762

-1.79%

8.34%
U.S. $ in yen 

84.034

84.150

0.25%

-9.64%
U.S. $ in Chinese

6.688

6.659

-0.10%

-2.03%
yuan











Canada dollar

$1.00

$0.98

2.17%

4.80%
(in U.S. $)











U.S. dollar 

$1.00

$1.02

-2.13%

-4.59%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,389.30

$1,388.30

0.31%

26.74%
(per troy ounce)











Copper

$3.98

$3.95

4.08%

18.90%
(per pound)











Silver

$28.57

$28.41

1.37%

69.62%
(per troy ounce)











Wheat 

$7.07

$6.98

8.61%

30.47%
(per bushel)











Corn

$5.41

$5.52

2.03%

30.46%
(per bushel)











Crude oil 

$88.00

$86.75

4.62%

10.89%
(per barrel)












31Comments
Dec 2, 2010 3:28PM
avatar
So glad the rally continues, especially at the gas pump. Paying $3.21 a gallon for gas already and these Wall Street idiots are pushing it higher. Should really help us people out who are just barely making ends meet. Things just keep getting better for us thanks to the oil traders and speculators. Cannot wait to see these people brought down when their world crumbles some day.
Dec 2, 2010 4:11PM
avatar
There is a conspiracy to make the market go up.  The powers that be want the market higher so that people "feel" wealthier thus stimulating the economy.  But in the end it is just smoke & mirrors.  The market is being manipulated - watch out when the money is pulled out - we're right back where we started, maybe worse.
Dec 2, 2010 4:09PM
avatar
as I keep saying, OIL HIGH ,WE WILL NEVER RECOVER!!!
Dec 2, 2010 5:35PM
avatar
Charley, I want to know who is telling you to write this crap? Yesterday all the new jobs that were created, today home sales stronger than expected! I hope you people aren't believing this garbage! Look around, record numbers of people, numbers higher than any time in this country's history are losing or have lost their homes, jobs, and credit card and other debt through the roof! In fact Charley, I will tell you that EVERYONE that reads this knows someone who has either lost or is in the process of losing their home, or has lost their job, or is in some kind of debt either from credit cards or other loans! People if I can give you any advice, don't believe everything you read or see on TV, be your own person and listen to your own gut! Most of the time if you get that gut feeling, it's for a reason! Things aren't always as they seem! Thank you for taking the time to read this, & Have a Great Day!
Dec 2, 2010 7:58PM
avatar

Lets see- the Fed announces "quantitative easing" which is Fed speak for inflation , the same slight of hand trick that was used  in 2009 to inflate stock prices. Your stocks have not gone up in value, it just takes more increasingly worthless dollars to buy the same stock.  Allow me to give a simple example so even folks with limited mental capacity like USA ONE can understand this. Say for instance that in 1965 you

purchased a 1000 sq. ft. home for $35,000 and sold it

in 2000 for $200,000. Your home did not go up in value during that time, the value stayed the same.

It took an additional $165,000 to buy it because the purchasing power of the dollar fell by that amount during that time frame. Those same dynamics are what is driving equity prices up now.

 The economy if anything is worse than most people believe. The stock market is only one segment of the economy, and a couple of consecutive up days hardly constitutes a recovery.

Dec 2, 2010 6:35PM
avatar

Check out trends on Dow over last year. AngryAt least 5 times this year market has gone up 5 to 10% only to retreat each time. DevilThese guys on wall street continue to use fear to short shares. Mobile PhoneThan they buy back your shares and mine. They continue short than buy back after taking market down 5% to 10% each time. Doing a little math here, they get returns between 25% and 50% this year alone.Nerd What happen to investing in companies for long term. The stock market is a casino for rich who continue to pray on working people. With fed bailout of 600 billion this year, they know the stocks have to continue to go up. But when markets get up between 5 and 10% bad news and fear start all over again. They will continue to de-value the dollar making every thing we buy higher. I be willing bet that at 11,750 to 11,800 we will have another 5% to 10% pull back again. Where is SEC on this. Market needs some to over see this crap. In last 20 years 401 accounts were setup to help workers so they could retire. ClockInstead these casino players have figure out how to take your hard earned money. At same time blaming us for not saving enough. Black Sheep

Dec 2, 2010 6:31PM
avatar
I'm glad some of you think the economy is better. Still looking for a job and bills keep going up, now gas is going up again too. The economy is better for the rich cause they have figured out they can get the same production from fewer employees, thus make more profits. I think I will go find a mountainside someplace and just be Grizzly Adams.
Dec 2, 2010 4:08PM
avatar

It is so geat that the marketis up and that the GOP league are back making money...that is what this materialistic society is all about....The GOP got rid of extended unemployment....now if they can get the minimum wage down to 10 cents an hour, the wealthy can help create jobs.

Hope everybody enjoys the higher gas pump prices, wait till you get your heating bills.

Go Fox news......let the poor eat cake

Dec 2, 2010 3:56PM
avatar
STOP! STOP! STOP!  The fabrication on wall street. The only investment that controls the markets would be the stimulas. Its true, so stop lying about it. Also please report the truth on who actually paid for the last election results. The washington post did on and it ended up being large corporations(rich) that dont want campaign reform, health reform, insurance, and ect. Now do you get the picture? Keep thinking your vote counts when you have to contend with big money buying candidates. Hello America, are you awake now?
Dec 3, 2010 10:26AM
avatar
I'm glad to see oil is at $88 a barrel. Good for the speculators that have started driving up the price again even though this is illegal. When I pay more at the gas pump I buy less groceries, and clothes and other retail items. But I'd much rather help the oil interests than put the unemployed, like myself, back to work. I see unemployment jumped back up to 9.6%. You mean that 93,000 jobs in Nov. was smoke and mirrors. I'm so glad the market went up 350 points the last two days based on NOTHING.
Dec 3, 2010 8:22AM
avatar
 

Can any of the pro-illegal-immigran​t crowd please explain how this is acceptable in America? Innocent children being trafficked! Innocent children being used as tools for extortion! Innocent children being placed in a dangerous situation because their parents choose to hire unscrupulous people to bring their children into America Illegally!

What kind of America are we creating when we consider reuniting the most vulnerable in any society with family that will place their own in such dangerous and criminal hands in an attempt to break laws putting their babies at risk?

All involved, from those who paid the traffickers to the traffickers themselves should be charged with felony criminal offenses and the children should be returned to their home country officials to be raised with some sort of reasonable care.

President Caldaron, President Funes and President Santos....Are you ready to make your houses a little bigger to include children who have been tossed aside by your own people?

” Discuss: Phoenix cops: 11 smuggled kids found at house

Suspects allegedly tried to extort money from some parents, threatening sexual assault

Phoenix cops: 11 smuggled kids found at house

 

the moral of the story is: you can not keep giving aid to criminals as criminals will rule your day! starting early uh huhMartini glassTongue outMartini glass

Dec 2, 2010 9:57PM
avatar

I see what you are saying.

Well, then don't get a job that you wait on rich people. Salvation Army needs bell ringers right now.

I read yesterday that there are 2.7 million people in the US with over $1 million in assets. I thought "wow" 2.7 million people are middle class.

Dec 2, 2010 9:55PM
avatar
@someone(silver saver) Using your logic, if you'd bought silver in 1965 for $5/ounce and today it sell's for $27/ounce it isn't worth more it just takes $22 more to buy it.  In fact the price of silver peaked in 1477 when it was $806/ounce and it bottomed in 1992 at about $4/ounce.  That's why the US abandoned the silver standard in 1893 and the price of silver mines crashed.  Unless you spend it, $$$ are only a way of keeping score of who's winning and who's losing.  You should cheer for the winners. Smile
Dec 2, 2010 9:37PM
avatar
someone (silversaver)

 

i tried reporting you with the 'report' tab but it has nothing there for people who actually get it and still get nothing; sorry!!Martini glassThumbs up

Dec 2, 2010 9:33PM
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Why no one is bothered about oil price now? $88 in Dec ?? Why?? Earlier it was projected by Dems that White house had oil connections. So what happened now? Did they also find link to oil ;-P   :(
Dec 2, 2010 9:31PM
avatar

msn money for DUMMIES: tomorrow is friday and what bad news will they write about to spout off why the market just lost everything it gained the past two day's!

 

sure hope iraq doesn't see the piece on rangel as that just goes to prove what kind of a democracy they paid a huge price for.....MHO 'what an 'F'ing joke that f can't be big enough to say what joke it truely really is!!

 

that just gives me another reason for downing a few of these Martini glassI don't knowMartini glass

Dec 2, 2010 9:26PM
avatar

Then just sit on welfare/unemployment​. Wait for the end of the world. It's only two years away anyway. Maybe unemployment will last that long.

Collect your food stamps. Sit on your a$$ and watch the ball game.

Then maybe you will be contributing to society.

Dec 2, 2010 8:19PM
avatar

Moneywise,

 

Could not disagree with you more. The market is made up of millions of people making their choices all the time. You really believe this is manipulated?

 

How bout a thought that this is a random walk, and we can't predict the future?

 

Still buying GLD and SLV.

Dec 2, 2010 7:55PM
Dec 2, 2010 7:51PM
avatar
Mutual funds don't allow you to day trade every couple days as market moves up and down. Most funds you have to pay a penalty. Again investing should be long term. Yes i did buy on dips. That's not the point. Market should not be a casino. Investing in our future a one time made country great. Greed, is not the answer. Lets get rid of all 401 plans stop stealing from those who have less.
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