A December to remember for stocks?

The Dow climbs 26 as the big holiday rally rolls on. Topping $90, oil hits a 2-year high. Walgreen and Bed Bath & Beyond earnings impress. Existing-home sales beat estimates.

By Charley Blaine Dec 22, 2010 3:08PM
Charley BlaineUpdated: 7:15 p.m. ET

Stocks managed modest gains today, but the market's December performance is shaping up as the best in at least a decade.

Boosting the market were gains in bank, utility and energy shares -- and hopes for a decent economy in 2011. Real-estate and homebuilding shares were higher after a better-than-expected report on existing-home sales for November.

At the same time, crude oil settled above $90 a barrel for the first time since October 2008. That pushed airline shares lower. Tech shares were weaker, too.

The Dow Jones industrials ($INDU) closed up 26 points to 11,559, their best finish since Aug. Aug. 28, 2008. The Standard & Poor's 500 Index ($INX) added 4 points to 1,259, its best finish since Sept. 3, 2008. The Nasdaq Composite Index ($COMPX) was up 4 points to 2,671, its best finish since Dec. 28, 2007.

The Dow and Nasdaq are up 5% and 6.9%,  respectively, for the month and are looking at their best December performances since 1999. The S&P 500, up 6.5%, is seeing its best December since 1991.

There will be a full day of trading on Thursday, with markets closed Friday for Christmas.

Reports are due on initial jobless claims, personal income and spending, durable-goods orders, new-home sales and consumer confidence.

While there are no major earnings reports on Thursday,  results from Bed Bath & Beyond (BBBY) and Micron Technology (MU) may affect stocks.

Bed Bath & Beyond shares were up 5.5% to $50.30 after hours after earnings beat Street estimates and the company announced a $2 billion share buyback program. Shares had risen 0.3% to $47.67 in regular trading.
 
Micron shares were off 3.5% after hours to $7.99 after revenue and earnings both missed Street estimates. Shares had risen 1.7% to $8.28 in regular trading.

Futures trading suggests a flat open for stocks.

Stocks making moves
  • ARM Holdings (ARMH), up 3.3% to $20.43. Microsoft (MSFT) is set to unveil a version of its Windows computer operating system that runs on the British company’s technology for the first time. Microsoft added 0.4% to $28.19. (Microsoft is the publisher of MSN Money.)
  • Carnival (CCL), up 3.1% to $46.59. The cruise-line operator was raised to "buy" from "hold" at Standard & Poor's.
  • Jacobs Engineering Group (JEC), up 4.9% to $46.32. The engineering company will expand its metals and mining businesses after agreeing to buy some operations from Norwegian company Aker Solutions (AKKVF) for about $675 million. Aker's American Depositary Units were up 8.1% to $17.04.
  • Krispy Kreme Doughnuts (KKD), down 5.6% to $7.57. The doughnut chain was cut to "sell" from "hold" at BGB Research.
  • Red Hat (RHT), down 2.5% to $46.70. Fiscal-third-quarter results disappointed investors.
  • Xilinx (XLNX), up 0.9% to $28.63. Shares dropped as much as 6.3% after the open after the chip maker said December quarter sales will be down 7% to 9% from the previous quarter. Earlier estimates saw revenue flat to down 4%.
Energy prices -- New York close
 

Wed.

Tues.

Month chg.

YTD chg.
Crude oil 

$90.48

$89.82

7.57%

14.01%
(per barrel)











Heating oil

$2.5285

$2.5164

9.13%

19.52%
(per gallon)











Natural gas 

$4.1520

$4.0590

-0.67%

-25.48%
(per mil. BTU)











Unleaded gasoline

$2.4245

$2.3985

7.03%

18.10%
(per gallon)











Retail gasoline

$2.9970

$2.9830

5.01%

13.57%
(per gallon; AAA)












Crude hits a 2-year high; airline shares fall
Crude oil settled at $90.48 a barrel, up 66 cents from Tuesday. Crude has risen 7.6% this month and 14% for the year. The national average price of gasoline hit $2.997 a gallon today, AAA's Daily Fuel Gauge Report said. That's up 5% for the month and 13.6% for the year. AMR Corp.

Airline shares were falling as oil moved up. American Airlines parent AMR (AMR) dropped 1.2% to $7.95 and is down 7.1% this month. United Continental Holdings (UAL), parent of United and Continental airlines, finished up 0.4% to $24.41. Shares are off 6.5% this week alone and 11.5% for the month.

Gold, meanwhile, was off $1.40 to $1,387.40 an ounce.

Profit-taking hit many non-energy commodities, with silver, copper, cotton and sugar futures all lower.

The 10-year Treasury yield was at 3.346%, up from 3.326% on Tuesday.  The dollar was higher against major currencies. There was more concern that the European debt crisis was worsening.

A big bet on 2011
The rally reflects what appears to be enormous confidence that 2011 will be a much better year for the economy and for stocks. Investor sentiment surveys indicate growing bullishness, and volatility indexes, which offer a look at investor fear, are at their lowest levels since April.

The confidence is coming from evidence of stronger manufacturing, a stabilizing banking system and some growth in consumer spending. That has to be offset by the nation's high unemployment levels.

One sort-of downside to today's cheery news came from the latest estimate on third-quarter growth. 

The Commerce Department said gross domestic product grew at an annualized 2.6% in the quarter; its prior growth estimate had been 2.5%.

The rub was that economists had expected a 2.7% growth rate.

Existing-home sales rose 5.6% in November from October to a better-than-expected annual rate of 4.68 million units, the National Association of Realtors said. Economists had expected a 4.65-million annualized growth rate.

That was the good news. The bad news is that existing sales were down 27.9% compared with a year ago. Inventories were up 5.4% from a year ago.

Thirty-two percent of buyers were first-time buyers. An additional 19% of buyers were investors. All-cash sales represented 31% of sales.

Broad gains in bank stocks
Bank of America (BAC) and JPMorgan Chase (JPM) were the top Dow performers, up 3.1% to $13.38 and 2.8% to $42.16, respectively. They were responsible for about nearly half the Dow's gain.

Their gains, along with gains for Wells Fargo (WFC), US Bancorp (USB) and Northern Trust (NTRS), were part of that continuing rally in financial stocks that has seen the KBW Bank Index ($BKX) rise 4.4% this week and 16.8% in December.

Some of the rally was due to bank stocks' basic cheapess after the 2008 financial crash. Plus, investors are growing more confident about the economy. Takeover speculation is also at work. Whitney

Hancock Holding (HBHC) of Gulfport, Miss., is acquiring Whitney Holding (WTNY) of New Orleans in a $1.4 billion stock swap. The deal values Whitney at $15.48 a share, a 42% premium over Tuesday's close. Whitney shares were up 28.8% to $14. Hancock was off 6.6% to $34.58.

Whitney, long known for its conservatism, had been hit hard by soured real-estate loans in Florida.

Regions Financial (RF) was the top S&P 500 performer, up 7.1% to $6.91, a reflection of takeover speculation after the Whitney-Hancock deal.

Last week, Bank of Montreal (BMO) agreed to buy Milwaukee's Marshall & Ilsley (MI) for $4.1 billion. Toronto-Dominion Bank (TD) will buy Chrysler Financial from Cerberus Capital for $6.3 billion.

Twenty-two of the 30 Dow stocks were higher on the day. The third- and fourth-best performers were General Electric (GE), up 1.7% to $18.06, and Alcoa (AA), also up 1.7% to $15.14.Walgreen

Fifty-one Nasdaq-100 ($NDX.X) stocks were higher, led by News Corp. (NWSA), up 3.2% to $14.95. The index added 1 point to 2,236.

Walgreen (WAG) was the second-best S&P 500 stock, up 5.5% to $38.85. Strict cost controls helped produce strong fiscal-third-quarter profits. Nike (NKE) was the laggard, down 5.8% to $86.95. New orders were slightly lower than expected in its latest quarterly report. Rival

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

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.130%

0.130%

-18.75%

160.00%
5-year Treasury note 

2.001%

1.962%

36.68%

-25.50%
10-year Treasury note

3.346%

3.326%

19.63%

-12.93%
30-year Treasury bond

4.446%

4.431%

8.39%

-4.20%
Currencies











U.S. Dollar Index

81.073

81.069

-0.24%

3.65%
British pound

$1.5394

$1.5477

-1.12%

-4.83%
(in U.S. $)











U.S. $ in pounds

£0.650

£0.646

1.14%

5.08%
Euro in dollars

$1.310

$1.310

0.86%

-8.57%
(in U.S. $)











U.S. $ in euros

€ 0.763

€ 0.763

-0.86%

9.37%
U.S. $ in yen 

83.752

83.720

-0.08%

-9.94%
U.S. $ in Chinese

6.671

6.658

-0.35%

-2.27%
yuan











Canada dollar

$0.987

$0.983

1.19%

3.80%
(in U.S. $)











U.S. dollar 

$1.014

$1.017

-1.18%

-3.66%
(in Canadian $)











Commodities

 

 

 

 
Gold

$1,387.40

$1,388.80

0.17%

26.56%
(per troy ounce)











Copper

$4.28

$4.28

11.82%

27.75%
(per pound)











Silver

$29.39

$29.39

4.26%

74.44%
(per troy ounce)











Wheat 

$7.835

$7.6500

20.45%

44.69%
(per bushel)











Corn

$6.090

$6.0225

14.91%

46.92%
(per bushel)











Crude oil 

$90.48

$89.82

7.57%

14.01%
(per barrel)












18Comments
Dec 22, 2010 8:45PM
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When I lost every thing and had to start life over, I never gave up.  I pick up 150 year run down home on auction. Do to very poor condition of the house was able pick it up and pay it off in 3 years. Worked pay check to pay check fixing it up. Drive 10 year old cars have no debt. I don't live in a new home but it's paid in full.  I dug under house put in foundation and all new floors walls window's. Also insulation put in whole house. Never thought i will be able to do the things I did in this house. Didn't even know what i was doing at times. It all worked out. I know God was there to give me a helping hand.  Started at age 53 now 57 almost done. At same time market crashed in 2008 my 401 was all in market funds on side line. In January of 2009 I put all my 401 into market stocks as it was still crashing. As of today I have more than double from bottom. My free time I study everything about this market. With QE and earnings being close to all time highs no place to go but up. Hard work and faith got me here. This market will climb another 30% in 2011. Earnings and QE will continue for least another year. Looks like companies will start adding employee's early in the next Quarter. For all gloom and doom just keep sitting on side lines. We all have to work hard and never give up. Life is never easy.  Have a Merry Christmas, next year will be great.

avatar

bp oil spill ? get with it people we are paying for it

Dec 23, 2010 12:46AM
avatar
bobc14171.  Good on you.  I have found that helping out, especially without a price tag, can be one of the most rewarding things we can do.  So much can be achieved if we learn to share, and offer our selves to those in need. 

Be safe, snowy roofs are a hazard, you hate to hurt yourself, doing a good deed.  You''ll give those older folks a heart attack.  Take care.
Dec 22, 2010 11:07PM
avatar

Gas is more than twice as high over sea's. Ask you self why is bigger always better. 20 years back the SUV's we drive today was a small school bus back than. Now we have 2 or 3 in every family. If we were worried about gas, why do these cars get bigger every year. We use excuse that bigger cars protect us. If they were all smaller you wouldn't have to worry about that. No one is worried about kids driving and texting at same time for them or us. Maybe next generation we will all be driving tractor trailers. We cry about every thing and do nothing to change it. This is still the me generation. Try helping some one out some time. It might change your world. Last week spent one day removing snow off roof for 80+ couple. Contractor wanted $600 to remove snow. I did it for nothing. Made me feel good helping someone. I am not a young man. Just knew it was right thing to do. Funny thing was couldn't sleep after removing snow from my own roof. Kept thinking about this older couple needed help. I didn't even know until after I removed snow off there roof that they tried getting contractor to do it. She told me she prayed to God for help. Guess that's why I couldn't sleep. Point is Glad I did it, never felt better. They keep e-mailing me thanking me. We all need to help ourselves first, than give a little back. It doesn't always take money. We all have some free time. Again this is Christmas. What a time to give a little. God Bless everyone on this board!!!Smile

Dec 22, 2010 10:08PM
avatar

the market is going up with increased confidence for 2011.  Well, we just had a $150 billion dollar federal deficit for November that works out to about $1,000 per working stiff, and for just one month.  So tell me what economy would look like if we subtracted $1000 from every working person's income for November.  Oil is hitting $90 and all is good on Wall Street.  God bless Goldman Sachs.

   

Dec 22, 2010 10:02PM
avatar

Glad,

You must be the real life of the party.

Do you wear a lot of lampshades?

Dec 22, 2010 9:43PM
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Glad/mfwic.  How can we forget (the market) when you keep reminding us how we are focusing on it?  It's just a game.  Sometimes costly?  Sometimes ridiculously easy?  But always in fluctuation.  Certainly not a easy venue.  And obviously not for you.  Why waste so much of your time on this su****ect?
Dec 22, 2010 9:34PM
avatar
bobc14171.  Nice to hear the success stories.  Keep em coming.  This board needs more of that. 

I have also had two tremendous years in this "shell game."  I am cautiously optimistic moving forward.  But like many of you, remain nimble and sharp, spending a lot time researching, and being on top of my portfolio.

Happy Holidays.  And congratulations for being someone who tames fear.

Dec 22, 2010 8:58PM
avatar
Thanks buzzybucks. NY's pension funds do not have same problems as other states. Yes seen 60 minutes Sunday. First they need to get employees to pay more into there pension. Second they need to get rid of final 3 average bumping up there pensions. Last pension should be based on highest 35 years like social security. Not on overtime in last couple years. Right now most employee's pay 3% should be 6%. These reforms will fix the problem.
Dec 22, 2010 8:22PM
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info1722,

 

Oil hasn't gone up at all, the fed is destroying the purchasing power of the U.S. dollar.

 

bobc14171,

 

The sky is not falling, beware the municipal and state defaults that are looming ahead. How can we have a double dip when we haven't gotten out of the first dip yet? I've been making a ton, but when the music stops make sure you have a chair.

 

One final thought for the year... God bless you, God bless you every one 

 

 

Dec 22, 2010 6:19PM
avatar
Where did all the double dip / naysayers go?  They were sooooo sure the end was near....  

We just needed a little more time to climb back out of the deep deep hole the last outfit dug...  Good times ahead...
Dec 22, 2010 5:44PM
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Maybe someone can explain this! It is always the republicans that scream about double dip. About market falling, sky is falling and fear. Yet these are the same people with all the money and more to lose. Could it be there own beliefs and fear have kept them out of the market. Now most pissed off, because there own fears may have caused them to stay on sidelines again. They need a pull back to get in. Hope it doesn't happen.  If were lucky some of them can join working class and fell what rest of us have been going through. What do rest of you think?
Dec 22, 2010 5:15PM
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Oil at $90 + per barrel? Must be BP's way of recouping their billions
Dec 22, 2010 5:00PM
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If we are cutting back on gas...how come the oil prices keep going up??????  How about you buyer explain this to me....or is this under the table politics????
Dec 22, 2010 4:54PM
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cant believe i bought that hewlett packard stock rated 10 you recommended what a turd you should have not recommended
Dec 22, 2010 4:45PM
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Money, money, money! ... Is there nothing more to life than money? Crying For some there isn't, and that's sick! Sick
Dec 22, 2010 4:23PM
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f the banks they should all kill themselfs boa chase what they try to do to the poor working slobs like me suck the life out of us ,so we no longer have self respect .OH great news ! crude oil hit 90 dollars a barrel now us home owners who pay for oil to heat our homes ,and need our cars to go to work every day get there pockets lighter and lighter they got us over the barrel.Here is a idea help us the tax payer who cant find a job instead of helping other countrys do i sound pissed off? because i am  bunch of mutts!keep raping us some more
Dec 22, 2010 9:21PM
avatar

The market will do what the market has done.

So many whiners in this world.

We will collapse just from all the cry babies.

 

If your not on the right side of the market moves, get there. Quit complaining to us. I don't care!! Sit down and study the market, read books, read commentaries and take everything with a grain of salt. Because the market won't do what the "experts" say it will do.

 

Yea!!! Oil is at $90 a gallon. Didn't hear much complaining when Gold went up. Maybe gas will hit $5 or $10 a gallon. Maybe that is what it will take to get us off the pump! Sure will make hybrids and electric cars more attractive. My bicycle still works so I'm set!!

 

And to all a Merry Christmas !!!

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[BRIEFING.COM] The stock market finished the Thursday session on a higher note with the S&P 500 climbing 0.5%. The benchmark index registered an early high within the first 90 minutes and inched to a new session best during the final hour of the action.

Equities rallied out of the gate with the financial sector (+1.1%) providing noteworthy support for the second day in a row. The growth-oriented sector extended its September gain to 1.9% versus a more modest uptick of 0.4% for the ... More


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