Dow jumps 92 on new housing bullishness
The major averages rise for the second straight day on guidance from Lennar and a strong pending-home-sales report. Facebook slips on mixed analyst ratings. Arena Pharmaceuticals soars after its new weight-loss drug wins an FDA OK.
Surprising growth in pending home sales and durable-goods orders has helped stocks to their second gain in a row -- their first two-day winning streak in about two weeks.
The pending-home-sales report was accompanied by strong second-quarter results from homebuilder Lennar (LEN), which reported a 40% gain in new orders over a year ago. Shares were up $1.31 to $28.70.
Also, the market overall was higher on gains in energy stocks as crude oil (-CL) in New York moved above $80, and natural gas futures (-NG) briefly topped $2.90 per million British thermal units for the first time since early January.
Health care stocks were largely higher a day before the Supreme Court is expected to issue its ruling on the constitutionality of the federal health care reform act. And shares of Arena Pharmaceuticals (ARNA) jumped $2.54 to $11.39 after the Food and Drug Administration approved its lorcaserin weight-loss drug. To be sold under the brand name Belviq, it is the first drug of its kind to be approved in 13 years and will hit pharmacies following a scheduling review by the Drug Enforcement Administration.
The Dow Jones industrials ($INDU) were up 92 points to 12,627 after climbing as many as 106 points. The Standard & Poor's 500 Index ($INX) had gained 12 points to 1,332, and the Nasdaq Composite Index ($COMPX) were up 21 points to 2,875.
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After the close, The Wall Street Journal reported that News Corp.'s (NWSA) board has approved a plan to split the company in two, separating the entertainment operations from the publishing business. The news is expected to be formally announced Thursday morning.
News Corp. shares were up 55 cents to $22.31 and rose slightly after hours.
Stocks still ahead for June
With just two trading days left in June -- and for the second quarter -- the Dow is up 1.9%, with the S&P 500 up 1.6% and the Nasdaq up 1.7%. That's an improvement over May when major averages were down 6.2%, 6.3% and 7.2%, respectively.
For the quarter, the Dow is down 4.4%, with the S&P 500 off 5.4% and the Nasdaq down 7%. 2012, however, remains a pretty good year: The Dow is up 3.4%, with the S&P 500 up 5.9% and the Nasdaq up 10.4%.first
Tomorrow is a monster day. The Supreme Court is expected to announce its health care decision. Typically, the court starts reading opinions at 10 a.m. ET.
The government offers its weekly report on jobless claims before the market open and a last look at first-quarter economic growth.
The European Union starts its big two-day summit, and earnings are due from Family Dollar (FDO), Nike (NKE) and Research In Motion (RIMM).
Futures trading suggests a flat open.
Google shares rise on new tablet introduction
Google (GOOG) shares were up $4.62 to $569.30 after the company introduced a new 7-inch tablet device called the Nexus 7.
Shipping is expected in late July, with the device expected to retail at $199. The device joins Apple's iPad and other devices. Microsoft (MSFT), which publishes MSN Money, recently introduced its Surface tablet device.
Microsoft was up 15 cents to $30.17.
|Energy prices -- New York close|
|Wed.||Tues.||Month chg.||YTD chg.|
|Crude oil (-CL)||$80.21||$79.36||-7.30%||-18.84%|
|Heating oil (-HO)||$2.5902||$2.5732||-4.18%||-11.12%|
|Natural gas (-NG)||$2.7980||$2.8070||15.52%||-6.39%|
|(per mil. BTU)|
|Unleaded gasoline (-RB)||$2.4989||$2.5229||-8.22%||-5.96%|
|(per gallon; AAA)|
Facebook slips; so does Zynga
Facebook (FB) shares were off 87 cents to $32.23 after underwriters to its controversial initial public offering kicked off coverage of the stock with notably mixed views. The lead underwriters -- Morgan Stanley, Goldman Sachs and JP Morgan Securities -- gave the stock "buy" ratings.
Analyst Daniel Salmon of BMO Capital Markets set an "underperform" rating with a $25 price target, questioning the company's appeal to key advertisers.
The price targets for analysts who provided them Wednesday ranged from $25 to $45, with the average $37.71, The Wall Street Journal noted.
That was slightly lower than the consensus for analysts at firms uninvolved in the offering who had previously began covering the company. It was also shy of the $38 price at which underwriting banks initially sold Facebook shares.
Facebook fell nearly 33% to as low as $25.52 after its IPO. It was up 29.7% from that low after Tuesday's close.
Shares of game-maker Zynga (ZNGA) were down 13 cents to $5.63. Shares tumbled nearly 5% on Tuesday. Investors were unimpressed by the company's announcement of new games and a new social network at its "Unleashed" event.
The stock is down more than 40% from $10, its IPO price in December.
Health care shares move up ahead of Supreme Court ruling
Forty-seven of the 52 stocks in the health care sector of the S&P 500 were higher today, led by Forest Laboratories (FRX) and Varian Medical Systems (VAR), whose products help treat cancer.
Forest Labs shares were up 14.4% for the year before the Supreme Court held three days of oral arguments in March about the health care bill. They're fallen 2% since. Varian was up 3% ahead of the oral arguments. The shares have fallen 13.1% since.
The Health Care Select SPDR (XLV) exchange-traded fund, which tracks the S&P 500 heath care sector, was up 40 cents to $37.52. The ETF is up 8% for the year but is little changed since March 28 when the oral arguments ended. Short positions in the ETF are at a two-year low, Barron's noted today.
Crude oil and gold move higher
Crude oil in New York settled up 85 cents to $80.21 a barrel. Brent crude had risen 53 cents to $93.55 a barrel.
The national average price of regular gasoline fell to $3.383 a gallon from Tuesday's $3.397. That's up $3.3% for the year but down 14.1% from the $3.936 -a-gallon peak in early April.
Energy shares moved higher with the prices and led the market overall. Chevron (CVX) closed up $1.62 to $102.57. Chesapeake Energy (CHK) jumped 88 cents to $17.93. Schlumberger (SLB) added $1.80 to $61.47.
Gold (-GC) settled up $3.50 to $1,578.50 an ounce. The metal had traded as low as $1,563.10 an ounce.
Silver (-SI) was down 9.6 cents to $26.94 an ounce. But copper (-HG), whose prices tend to reflect how traders view economic trends, was up 3.4 cents to $3.347 a pound.
The December contract for corn (-ZC) settled up $6.34 a bushel, up 10 cents from Tuesday and up 15% this week because of drought worries in the nation's Corn Belt. Wheat (-ZW) jumped 4.25 cents to $7.5125 a bushel. It's up 11.6% in three days of trading.
Interest rates were lower, with the 10-year Treasury yield dipping to 1.621%, down from Tuesday's 1.628%.
Financial shares are higher -- even Barclay's
Financial stocks were the second strongest market sector after energy. JPMorgan Chase (JPM) and Bank of America (BAC) were the top performers among the 30 Dow stocks.
Citigroup (C) was up 37 cents to $27.10. Wells Fargo (WFC) added 40 cents to $32.73.
British banking giant Barclay's (BCS) added 16 cents to $12.33. The gain despite agreeing to pay £290 million, or $453.6 million, to settle a long-running investigation by U.S. and British regulators into allegations that traders at the bank manipulated interbank lending rates.
Barclay's is the first major financial institution to settle with regulators following a interest-rate probe in North America, Europe and Asia that has led to a score of individuals being fired or suspended by major U.S. and European banks and leading brokers.
No banks or individuals have been charged with wrongdoing.
Barclays settled with the U.K.'s Financial Services Authority, the U.S. Commodity Futures Trading Commission and the Justice Department's fraud section. It also said Chief Executive Robert Diamond and three other top executives -- Chris Lucas, Jerry del Missier and Rich Ricci -- will forgo annual bonuses for 2012.
Don't get your hopes up about the EU summit
European stocks were higher in hopes that a solution to help Spain and Italy can be achieved. European Union leaders will hold a summit Thursday and Friday in hopes of working out solutions to Europe's debt crisis.
European stocks were higher in advance of the summit, with French, German and British stocks up 1.5%.
A downside even before the European summit begins: German Chancellor Angela Merkel shut the door to joint eurozone bonds to help cut Spain’s borrowing costs, saying they are the "wrong way" to achieve the greater European integration needed to stem the debt crisis.
New York University economist Nouriel Roubini said the European Union may be disintegrating at a time when strong unity is critical.
The euro was lower against the dollar, falling to $1.2464 from $1.2495 on Tuesday. The euro is off 0.9% against the dollar this week.
Twenty-four Dow stocks finished higher for the day, led by JPMorgan Chase and Bank of America. The laggard was McDonald's (MCD), down 77 cents to $88.33.
A total of 406 S&P 500 stocks were higher, led by oil and natural gas producers Cabot Oil & Gas (COG) and Qep Resources (QEP). The laggards were O'Reilly Automotive (ORLY) and Chipotle Mexican Grill (CMG), down $13.83 to $82.61 and $23.63 to $391.78, respectively.
O'Reilly's loss, its worst since going public in 1993, came after the company said sales growth was slower than expected and second-quarter profit will be on the lower end of the company’s forecast range.
Chipotle fell after ITG analyst Steve West said sales were trending slightly lower than the Street consensus.
Seventy-nine Nasdaq-100 stocks were higher, led by Dell (DELL) and Nvidia (NVDA). The latter, up 41 cents to $13.14, is supply chips for the Google tablet. It also sells chips to Apple and Microsoft.
O'Reilly and Monster Beverage (MNST) were the laggards.
|Short hits from the markets -- New York close|
|Wed.||Tues.||Month chg.||YTD chg.|
|13-week Treasury bill||0.0800%||0.090%||14.29%||700.00%|
|5-year Treasury note||0.719%||0.724%||7.15%||-13.37%|
|10-year Treasury note||1.621%||1.628%||2.53%||-13.36%|
|30-year Treasury bond||2.693%||2.698%||0.79%||-6.78%|
|U.S. Dollar Index||82.81||82.539||-0.38%||2.84%|
|(in U.S. $)|
|U.S. $ in pounds||£0.642||£0.639||-1.02%||-0.22%|
|Euro in dollars||$1.25||$1.25||0.89%||-3.75%|
|(in U.S. $)|
|U.S. $ in euros||€ 0.802||€ 0.800||-0.88%||3.90%|
|U.S. $ in yen||79.94||79.51||1.76%||3.68%|
|U.S. $ in Chinese||6.38||6.36||-0.03%||0.84%|
|(in U.S. $)|
|(in Canadian $)|
|(per troy ounce)|
|(per troy ounce)|
|Crude oil (-CL)||$80.31||$79.36||-7.19%||-18.74%|
I didn't see the earlier comments but all I thought when I read this was - no worry it will be back down tomorrow because of some other usless, over-analized, manipulated bit of data...
"Stocks rally on new housing bullsh_t?"
LAMO MSN!!! LAMO on the RALLY and on the HOUSING BULLSH_T!
If the European summit doesn't come off well, the markets will completely discount any good news that has caused them to rise for the last two days. The markets have been nothing but headline driven for the last few years. Almost any piece of bad news will totally offset any piece of good news and vice-versa.
The market on homes is overpriced and nothing of significance will happen until it's allowed to hit it's natural bottom
The market will not be stable until the economy is stable.
The economy will do nothing of note until the inept quasi socialsist in the white house is gone.
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[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.
Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More
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