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.

By Charley Blaine Jun 27, 2012 12:30PM
Charley BlaineUpdated: 11:35 p.m. ET

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.

Article continues below. 

The Nasdaq-100 Index ($NDX), heavily influenced by Apple (AAPL), rose 16 points to 2,566. Apple was up $2.47 to $574.50 after rising to as high as $576.74.

 

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%
(per barrel)











Heating oil (-HO)

$2.5902

$2.5732

-4.18%

-11.12%
(per gallon)











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)











Brent crude 

$93.68

$93.02

-8.22%

-12.93%
(per barrel)











Retail gasoline

$3.3830

$3.3970

-6.55%

3.27%
(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.
Treasury yields











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%
Currencies











U.S. Dollar Index

82.81

82.539

-0.38%

2.84%
British pound

1.5571

1.5642

1.03%

0.22%
(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%
yuan











Canada dollar

$0.976

$0.977

0.76%

-0.54%
(in U.S. $)

 








U.S. dollar 

$1.026

$1.024

-0.75%

0.54%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,578.40

$1,574.90

0.91%

0.74%
(per troy ounce)

 








Copper (-HG)

$3.495

$3.313

3.85%

1.72%
(per pound)

 








Silver (-SI)

$26.9420

$27.0380

-2.94%

-3.49%
(per troy ounce)

 








Wheat (-ZW)

$7.5125

$7.4700

16.70%

15.09%
(per bushel)

 








Corn (-ZC)

$6.3300

$6.240

14.00%

-2.09%
(per bushel)

 








Cotton 

$0.6796

$0.682

-5.02%

-25.87%
(per pound)

 








Coffee

$1.6485

1.6575

1.17%

-28.22%
(per pound)

 








Crude oil (-CL)

$80.31

$79.36

-7.19%

-18.74%
(per barrel)










 

155Comments
Jun 27, 2012 3:03PM
avatar
LMAO.....! There is NO rebound in housing....and there are NO jobs! The past 2 months have been an eye opener. Wake up and quit believing these rediculous day by day articles. The economy doesn't change daily, nor do jobs or the housing market . The economy is not going to improve prior to the election in November..............and watch out if Obama gets re-elected...............It will be an economical mess. Vote Obama out in 2012!
Jun 27, 2012 1:12PM
avatar

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...

Jun 27, 2012 3:07PM
Jun 27, 2012 2:04PM
avatar
Too bad the stock market is based on "Hope" instead of "Facts" the headlines are always the same...housing hopes, economic recovery hopes, hopes for lower unemployment figures, Europe hopes, Supreme Court hopes, Bailout hopes, new construction hopes, manufacturing hopes - BLAH BLAH BLAH - Hey Wall Street - your entire world is based on false hopes! Let's make a change and base it on FACTS!
Jun 27, 2012 3:10PM
avatar
What the Hell is a Housing hope?   I want change    ie.  president change    I HOPE
Jun 27, 2012 4:16PM
avatar
Housing ?? Lets see . The home values of most underwater home owners are still 40% lower than what they were 6 yrs ago. The housing market is saturated with foreclosures ! Holding any recovery in housing back! Big mortgage banks are still selling repo homes fro pennies on the dollar . Great job wall street banks ! Keep devaluing American home owners some more ! No wonder why people walk away . And now all the mortgage companies require 20% down to buy a house ? It should have been that all along and we would not be in this mess today! It was great in the 90s when a wal mart worker only needed zero down for a 200.000 dollar home ? And they paid PMI insurance so the bank still got its money knowing that they were going to foreclose !!! Only in America baby! But then no programs for people like me who has done everything right and NEVER has been late on my mortgage! Only inj America ....
Jun 27, 2012 3:13PM
avatar
or l b  and endevor   We might want the sorry a$$ senators to come up with a budget      or a better idea let obame be right  if he cant fix the economy in 3 years  he is a one term pres.  I vote for that
Jun 27, 2012 1:34PM
avatar
Don't worry everyone.... Today those buyers are going to get the bad news that they don't qualify to buy the homes, so tomorrow the headlines wil read.... "Stocks slump on housing worries..." Mark my words...
Jun 27, 2012 1:48PM
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I have just got to wonder How, why , where and who are these people buying houses ?  I don't know ANYBODY that is buying a house , I know a LOT of people that can't sell a house. can't help but believe this is a bunch of hype
Jun 27, 2012 2:54PM
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Stocks rally on BULL S over housing starts= FRAUD STREET  at it again ! Housing is going off the CLIFF !
Jun 27, 2012 3:22PM
avatar

"Stocks rally on new housing bullsh_t?"

LAMO MSN!!! LAMO on the RALLY and on the HOUSING BULLSH_T!

avatar
Yesterday, Europe was more important than housing, but TODAY, housing is far more of a controlling factor......YEAH, the "bullishness" is the kind that comes out the south end of a north bound bull!
Jun 27, 2012 1:03PM
avatar
I guess when they don't like the comments they just delete the thread.
Jun 27, 2012 3:11PM
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WOW two whole days same lead!!!  STLL LIKE TO NOW WHERE AT ? Around here more for sale as being owned by banks!!!!!!!!  at least four or five forecloser a week!!!!!!!   sure your  sources are printing correctly or have they gone off line again?
Jun 27, 2012 6:09PM
avatar

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.

Jun 27, 2012 3:41PM
avatar
Thursday Obama gets the double whammy

Holder is held in contempt

Obummer-care gets flushed
Jun 27, 2012 3:19PM
avatar
You liberal facists call  +78 "A RALLY" on the DOW? Do you get a kickback for every positive slant on the DOW from the Obama administration??? Really "HARD UP" for news MSN?
Jun 27, 2012 3:21PM
avatar
things are looking good ,today,,,,but just wait,,,,,,,,,tomorrow is coming,,,,,,,,
Jun 27, 2012 4:12PM
avatar
Wait a minute!  We're down 167 for the month, we come back 97 pts and thats a rally?  Maybe its just the way I learned math but I think we have a little bit to go...but oh wait, it's all BS anyway
Jun 27, 2012 2:47PM
avatar
The housing market will do nothing of significance, until Obams stops the stupid spending programs trying to prop it up.
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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