Energy, metals shares boost market; Dow rises 38

Crude oil tops $101, and gold and silver push higher. Netflix leads the Nasdaq. Rising costs hit shares of Polo Ralph Lauren and Costco. Whlle home prices fall, a government report says, Pittsburgh prices hold their own.

By Charley Blaine May 25, 2011 1:16PM

Charley BlaineUpdated: 8:15 p.m. ET

 

For a brief moment, stocks looked headed to a big late-day gain. But the buying flurry that pushed the Dow Jones industrials ($INDU) up as many as 84 points around 3 p.m. ET faded in the last hour, and the major indexes ended with modest gains in a rally set off by rising commodity prices and energy and natural-resource stocks.


Seven of the top 10 performers in the Standard & Poor's 500 Index ($INX) today are energy stocks, led by Cabot Oil & Gas (COG), up 7.1% to $57.25.

The S&P 500's laggards were consumer stocks, including Polo Ralph Lauren (RL), down 11.4% to $114.70.

The S&P 500 closed up 4 points to 1,320. It had been up 8 points just 15 minutes before the close. The Dow Jones industrials ($INDU) were up 38 points to 12,395. The blue chips had been up as many as 84 points at 3:20 p.m. The Nasdaq Composite Index ($COMPX) added 15 points to 2,761. 


Article continues below.

Netflix (NFLX), up 4.8% to $259.47, was a big contributor to the S&P 500 and the Nasdaq. Netflix was the third-best S&P 500 gainer and top gainer among Nasdaq-100 ($NDX.X) stocks after Facebook CEO Mark Zuckerberg said his company has been in discussions with Netflix on potential integration of social-networking tools.  The Nasdaq-100 was up 14 points to 2,318.


A flat open on Thursday?

Futures trading suggests that U.S. stocks face a flat open on Thursday. Economic reports include a new estimate on first-quarter gross domestic product and the weekly report on jobless claims. Earnings are due from H.J. Heinz (HNZ), Tiffany (TIF) and the Toronto Dominion Bank (TD)


It's not clear how the market will react to Freescale Semiconductor's initial public offering, which generated less cash than expected. The company had hoped to raise more than $1 billion to pay down debt. It sold about 43.5 million shares at $18 a share, or about $783 million. The company had originally hoped to sell the shares for $22 to $24 each. Trading starts Thursday.


Meanwhile, Spirit Airlines, the US discount airline also preparing for an IPO, cut the size of its offering by 37% to 15.6 million shares and reduced its price range from $14 to $16 to $12 to $13. Pricing was expected late today.

Rising energy prices boost energy stocks
Energy stocks were higher because energy prices are higher, part of a continuing payoff from Goldman Sachs' prediction Tuesday that oil prices are headed higher.

At the same time, fertilizer maker CF Industries (CF), up 3% to $150.99, was the 13th-best S&P performer. Eastman Chemical (EMN) and Freeport-McMoRan Copper & Gold (FCX) , up 2.6% to $102.81 and 2.4% to $49.98, respectively, were among the top 25 S&P gainers today.

Crude oil (-CL) in New York settled up $1.73 to $101.32 a barrel. Brent crude, which many traders pay more attention to, settled up $2.40 to $114.93 a barrel. Goldman's oil outlook says Brent will hit $120 by the end of this year and $130 in 2012.


Silver (-SI) settled up $1.514 an ounce to $37.642, a gain of more than 4%. Gold (-GC), meanwhile, settled up $3.40 to $1,526.70 an ounce, its fourth straight gain and highest close since May 3. Copper (-HG) settled up 9.4 cents to $4.107 a pound.

The commodity gains, which included gains of at least 1% for wheat, corn, cotton, coffee and sugar, came as the dollar was lower for much of the day.


The greenback finished down slightly against the British pound but higher against the euro and the Japanese yen. The U.S. Dollar Index, which measures the greenback against a basket of currencies, was flat at 76.03. A falling dollar has tended to lift commodities.


Goldman's argument for higher oil and other commodities prices is that the global economic recovery is still on, and that demand for energy and raw materials will continue to be strong.

But some traders were saying today's commodity gains were the result of inflation fears.

Inflation is bothering a number of companies. Polo Ralph Lauren and Costco Wholesale (COST) cited costs as a big concern.


Costco was off 1.3% to $80.32. While the company reported a 6% increase in third-quarter earnings and said sales rose 16% to $20.19 billion, it also took a $49 million accounting charge related to rising prices.

Home prices fall back

The Federal Housing Finance Agency said today that home prices that it tracks were off 5.5% in the first quarter from a year ago, the biggest decline since the fourth quarter of 2008. Prices fell in 43 states.

Among the 25 largest metro areas, Atlanta saw the biggest price declines over the last year, 13.5%. Pittsburgh held up the best, with prices up 0.2%. 


Energy prices -- New York close
 
  Wed.     Tues.     Month chg.     YTD chg.
Crude oil (-CL)

$101.32     $99.59     -11.07%     10.88%
(per barrel)

 

 

 

 
Heating oil (-HO)

$2.9803     $2.9097     -9.02%     17.16%
(per gallon)

 

 

 

 
Natural gas (-NG)

$4.379     $4.3450     -6.79%     -0.59%
(per mil. BTU)

 

 

 

 
Unleaded gasoline (-RB)

$3.0162

$2.9928

-12.95%

22.95%
(per gallon)

 

 

 

 
Brent crude 

$114.86     $112.53     -8.76%     21.22%
(per barrel)











Retail gasoline

$3.8140

$3.8430

-2.43%

24.15%
(per gallon; AAA)












Leaders and laggards
Apple (AAPL) was up 1.4% to $336.78 after Wedbush Securities analyst Scott Sutherland boosted his price target on the stock to $450 and boosted earnings estimates for fiscal 2011 and 2012. Sutherland sees $103.5 billion in revenue and earnings of $24.71 a share in fiscal 2011, which ends in August. That's up from a prior estimate of $102.9 billion and $24.30 per share. For 2012, he's looking for $124.6 billion in revenue and earnings of $28.50 a share.


Shares of American International Group (AIG) were off 4% to $28.28 after the insurance company and the U.S. Treasury priced an offering of 300 million of its common shares at $29 each, generating $8.7 billion in proceeds.

Shares of Applied Materials (AMAT) were up 1.1% to $13.86. The gain came even as the chip-equipment maker issued a disappointing outlook for the July quarter, guiding for a sequential decline of between 3% and 10% in sales.

Collective Brands (PSS) missed Wall Street’s estimates by a wide margin, sending shares down 16.7% to $15.31.

Shares of California Pizza Kitchen (CPKI) jumped 10.5% to $18.47 on a Wall Street Journal report that the casual-dining chain is selling itself to private equity firm Golden Gate Capital for roughly $470 million. The company has been looking for a buyer since early 2010.

Toll Brothers (TOL) shares were up 1.8% to $20.63 after the luxury homebuilder narrowed its loss in the fiscal second quarter to 12 cents a share. The company reported a 3% increase in sales to $319.7 million. Analysts had forecast a loss of 4 cents a share on sales of $320.5 million. CEO Doug Yearly told CNBC he believed the company's business will turn around in 2012.

Material from the Street.com was used in this report.


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

Month chg.

YTD chg.
Treasury yields




 





13-week Treasury bill

0.050%

0.050%

25.00%

-58.33%
5-year Treasury note 

1.766%

1.784%

-10.58%

-12.40%
10-year Treasury note

3.129%

3.123%

-5.07%

-5.33%
30-year Treasury bond

4.282%

4.259%

-2.81%

-1.83%
Currencies











U.S. Dollar Index

76.030

76.023

4.00%

-4.11%
British pound

$1.6273

$1.6189

-2.52%

4.28%
(in U.S. $)











U.S. $ in pounds

£0.615

£0.618

2.59%

-4.10%
Euro in dollars

$1.405

$1.411

-5.17%

5.00%
(in U.S. $)











U.S. $ in euros

€ 0.712

€ 0.709

5.45%

-4.76%
U.S. $ in yen 

82.237

81.990

0.99%

1.07%
U.S. $ in Chinese

6.517

6.495

0.08%

-1.48%
yuan











Canada dollar

$1.023

$1.025

-3.03%

1.99%
(in U.S. $)











U.S. dollar 

$0.978

$0.976

3.12%

-1.95%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,526.70

$1,523.30

-1.91%

7.41%
(per troy ounce)

 

 





Copper (-HG)

$4.107

$4.013

-1.72%

-7.65%
(per pound)











Silver (-SI)

$37.642

$36.128

-22.55%

21.67%
(per troy ounce)











Wheat (-ZW)

$7.9650

$7.7975

-0.59%

0.28%
(per bushel)











Corn (-ZC)

$7.4225

$7.3325

-1.56%

19.24%
(per bushel)











Cotton 

$1.5603     $1.5388     -1.26%     7.75%
(per pound)











Coffee 

$2.65     $2.61     -11.67%     0.1012474
(per pound)











Crude oil (-CL)

$101.32

$101.32

-11.07%

10.88%
(per barrel)











26Comments
May 25, 2011 3:19PM
avatar
What right does Goldman Sachs and other large banks have to make outlandish statements promoting higher oil prices. Libya's oil has been off the market for a long time and when oil was over $110 a barrel, Goldman Sachs did not say anything. Now that it went below $100, they come out with their BS predictions to raise prices. How come this is not considered manipulation of the oil market? Are they above the Law? They did this for one reason to raise prices and it worked as they are one of the many heavily vested in oil. Even though the demand is not there, it is close to $102 again thanks to these jackasses. The working man does not stand a chance in this country anymore thanks to Greed.
May 25, 2011 3:02PM
avatar
Here is what I think. Wall Street knows something about what is going to happen to the oil market. They are pumping up the market to make alot of money now before the whole thing tanks.
May 25, 2011 2:58PM
avatar

Our economy is directly tied to the price of oil. Knowing this, Why doesnt our government make a stand to do something about it? Better yet, Why do we as a nation stand for it? Its still "We the People" right?

May 25, 2011 2:46PM
avatar

amazing one of the stories yesterday was a couple of companies decided they are going to raise the costs of there products, the biggest was coffee, not even twenty four hours after they claim raising prices all the sudden presto market manipulation.

 

or its the other goldman sachs says and so it shall be done. after all they're the ones running the show, to bad its entirely in their favor

May 25, 2011 3:32PM
avatar
Well, well, well - Imagine that, stocks up again after the sell off, what a surprise.  After pumping it up, I bet they go down again on the next manipulated cycle.
May 25, 2011 6:21PM
avatar

As usual, paper stocks keep losing and commodities keep winning. High fuel and high food prices are great for the economy. Invest in commodities, the more expensive everything gets, the better. What's good for Wall Street, is good for Main Street! Let's all cheer and hope for $20.00 a gallon gas and a 100% mark up for all food items. Greed, selfishness, stupidity and destruction,.... it's the American way!

 

Let's hope housing prices go down another 50% too. It will be great for all Americans to buy cheap and affordable homes. What a deal!

 

Lastly, let's hope to see more jobs outsourced and more Americans homeless, then we'll know that unfettered and unregulated Capitalism is working just the way it was meant to work. All hail Wall Street, greed, banks, monopolies and corporate fascism! Bow to your masters!

May 25, 2011 3:19PM
avatar
It is a very sad day when one of the good guys dies.  There really are so few!  He will be missed.  Rest in Peace my friend.  We will always remember you.
May 25, 2011 2:59PM
avatar
Last hour of the day, we are still up a bit but do not take these scumbags for granted, we never ever do, things can change in a second....Be prepared for a volatile hour where manipulators will do their best to drop this market as much as they can get away with...We shall see...Once again, RIP Mark Haines.
May 25, 2011 9:10PM
avatar
A very successful businessman had a meeting with his new son-in-law. I welcome you into the family,” said the man. “To show you how much we care for you, I am making you a 50-50 partner in my business. All you have to do is go to the factory everyday and learn the operation.”
The son-in-law interrupted. “I hate factories. I can’t stand the noise.” “I see.” replied the father-in-law, “Well, then you’ll work in the office and take charge of some of the operations.” “I hate office work,” said the son-in-law. “I can’t stand being stuck behind a desk.” “Wait a minute,” said the father-in-law. “I just made you half owner of a money-making industry, but you don’t like factories, and won’t work in an office. What am I going to do with you?” “Easy,” said the son-in-law. “Buy me out.”
May 25, 2011 4:44PM
avatar
Yup, it was a very volatile last half hour; they called for a selloff and believe this, if the market closed at 1630 hrs as opposed to 1600 hrs, we would have closed in the red....Its unreal, manipulators have the numbers and the beat goes on...We are sure many people thought at 1530 hrs that it would be a very good day since we were up over 70 points and climbing. Oh well, truth is stranger than fiction down here people, that's why we try to warn about it. One more time, our deepest sympathies to Mark Haines' family,  you were one of the good guys and nobody recognized sucker's rallies better than you did...Rest in Peace Mark.
May 25, 2011 3:59PM
avatar

I don't know  hmmmm .....

 

Heck, the 'idiot' in office does not even know what year it is! 
let's remember to consider the source.  lep, would you mind providing us with a detailed vitae including education and experience in political office?  we would like to understand just how much cred you have on the streets cause many consider the 'bama to be shiznit ....
May 26, 2011 12:20AM
avatar

Sick  just looked up the board members for this "DEQ" Department of Environmental Quality in Michigan.  almost half high-paid lobbyists and industry management-types.

 

now we know where Detroit gets the fuel to start all of those fires every year - they just turn on their tap water and strike a match.

 

sad.

May 26, 2011 12:08AM
avatar

Surprised  so, who is this "DEQ" anyway ???????

 

Michigan sets new rules for
natural gas fracking

May 25, 2011 10:05 PM ET

By JOHN FLESHER

TRAVERSE CITY, Mich. (AP) - Environmental regulators in Michigan have approved new rules for energy companies that produce natural gas by cracking open underground rock formations.

The regulations announced Wednesday by the Michigan Department of Environmental Quality would require the companies to meet additional requirements for public disclosure and protecting water resources.

The new rules involve the gas extraction method known as hydraulic fracturing, or "fracking." It pumps sand, water and chemicals under high pressure into underground wells to open fissures in rock through which the gas can escape and be extracted.

The process has drawn criticism in Texas and other states, where opponents say it contaminates the soil and ground and surface waters.

The DEQ says the method has been used on nearly 12,000 wells around Michigan since the 1960s without damaging the environment.

May 25, 2011 4:23PM
avatar

Active, your politics on the wars is pretty close, but as usual your numbers a fuzzy.

 

Even with the last 2.4 years of Obama War spending and all of Gulf I tossed in the number does not get to 2 trillion.  Sorry.   So all the wars of Bush I & II and Mr. Obama combined have not come close to his deficit spending...  Hell, Iraq is cheaper than his Stimulus spending of 860 Billion... 

 

The wars contributed to the debt EXPLOSION, but  most of it belongs squarely on Mr. Obama's shoulders...  Afterall, in the face of falling revenues, he decided that massive spending was the answer.  If we survive this economic mess, it will take a full decade and elimination of this notion that keynesian government spending is good for America.   Nothing can be further from the truth...

May 25, 2011 8:58PM
avatar

Thinking   ok, ok, edited a bit due to liberal bias, BUT i stand by my post ..... trillions it is

 

The wars contributed to the debt EXPLOSION, but  most of it belongs squarely on Mr. Obama's shoulders... 

in the science of economics you have what are called "ripple effects" and "unintended causal effects."  the gulf wars caused ripple effects in the areas of the huge unfunded liabilities for caring for the thousands of military wounded both mentally, physically and spiritually as they will need healthcare, psychiatric care and substance abuse care/counseling for the rest of their lives.  these costs are huge.  even more major ripple effects were the world trade center and the costs of anti-terrorism measures world-wide for decades to come.

 

as for the causal effects, bush, Congress, and America in general took their eyes off the economic ball for eight years while bush pursued daddy's nemesis and oil, oil, oil and that allowed the economy to tank. so you have the cost of the wars, the ripple effects, and now the trillions spent by obama to try to save our bacon from the causal effects.  will these humans never learn?

 

you know, you are right.  my numbers were wrong.  these stupid wars actually cost us three or four trillion!!!

 

p.s. thanks for the support brothers - these wars were for the oil profiteers and should never have been waged.  God bless our military and keep them safe and please Lord, let the military come to their senses by putting all of the generals, colonels, majors, and captains on the front lines and on patrols, they will then have a few "moments of clarity" and our soldiers can all come home.  heck, give obama am m-16 and let him stand a post as well.

May 25, 2011 5:57PM
avatar

Active RIA,  I agree with you 100%..

May 25, 2011 11:36PM
avatar

Thinking and thus another American big corporation CEO gets his start by "working" his way up the ladder .......

                                                 AirplaneAutoMoneyIsland with a palm treeGift with a bowMoney

                                  Boy

                 Boy

Boy 

May 25, 2011 5:45PM
avatar
I'm not trying to be political or rip on anybody.  However, if it seems so obvious to some of you that so and so is manipulating the market, you must be making a fortune anticipating, reading and reacting to their actions.
May 25, 2011 4:13PM
avatar

JAWT -

 

Try adding some garlic. It's much better that way.

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