Stocks rally as ECB vows to rescue eurozone
The central bank promises to save the 17-nation region from financial collapse. US jobless claims decline, while durable goods orders rise. Pending home sales slip. Exxon misses on earnings.
By Andrea Tse and wire reports
Stocks rallied Thursday as European Central Bank President Mario Draghi pledged to do everything possible to guarantee the survival of the eurozone. A decline in U.S. initial jobless claims and a rise in durable goods orders also lifted shares.
"Draghi's words carry a great deal of weight because he has in the past refused to fill in where governments fail, recognizing the futility of sticking a finger in the dyke," said Andrew Wilkinson, a chief economic strategist at Miller Tabak.
In U.S. economic news, the Labor Department reported Thursday that initial jobless claims fell by 35,000 to 353,000 in the week ended July 21. Economists had forecast claims would fall to 380,000. The four-week moving average declined to 367,250 from 376,000, the lowest level since March. The number of Americans still collecting jobless benefits fell by 30,000 in the week ended July 14 to 3.29 million.
The Commerce Department said durable goods orders rose 1.6% in June after rising 1.6% in May. Economists had predicted orders would increase by 0.4%. Excluding transportation, orders fell 1.1%, the steepest decline in five months.
The National Association of Realtors reported that home sales agreements fell by 1.4% in June to a reading of 99.3, according to The Associated Press. May's reading was revised down to 100.7. A reading of 100 is considered healthy. The index is 9.5% higher than it was a year ago.
A handful of blue-chip quarterly earnings reports were released Thursday.
Exxon Mobil (XOM) reported second-quarter earnings of $1.86 a share on revenue of $127.36 billion, compared with the average estimate of $1.95 a share on revenue of $115.08 billion.
United Technologies (UTX) posted an increase in quarterly earnings of less than 1% as slowing Chinese economic growth and the European crisis hurt sales of its products.
3M (MMM) beat quarterly earnings estimates in part driven by strength in its health care, industrial and transportation businesses. 3M reported earnings of $1.66 a share versus the average estimate of 1 cent a share. Sales of $7.53 billion came in about $250 million below the Wall Street target. 3M's full-year outlook remains the same.
Facebook (FB) is expected to post its quarterly results after the close. It's the company's first report as a public company. Analysts expect a profit of 12 cents a share on revenue of $1.15 billion.
Facebook partner Zynga (ZNGA) on Wednesday reported a below-consensus quarterly profit and lowered its outlook. The FarmVille maker cited a "a more challenging environment on the Facebook web platform." It said it now sees earnings of 4 cents to 9 cents a share. Wall Street analysts were looking for earnings of 27 cents a share.
Royal Dutch Shell (RDS.A) posted a decline in second-quarter profit, mostly because of lower oil prices. Shell's "current cost of supplies" earnings, which strips out the impact of swings in the price of oil between its production and sale, was $6 billion, compared with $8 billion a year earlier.
Sadly, the rise and fall of the stock market has nothing to do with reality. It is a game played by the big boys - hedge funds, pension managers, etc. All they are trying to do is make money by floating rumors about various sectors of the market.
To beat them at their own game, you have to research the stocks you select carefully. Watch for annual lows on quality stocks and buy then. Don't buy into any rally, ever. You sell into rallys. The "professionals" are merely gamblers moving the market to suit their thoughts. The sooner people realize this, the more money you can make off of their arrogance.
So, how does this benefit myself and the struggling Middle Class of America?
It sounds like the same old song and dance...
Don't you understand by now Bernanke is printing fake monies loaning it to the banks at zero percent interest and the banks in turn are lining their pockets with billions of dollars and buying worthless US T-bills and stocks and bonds with the rest. Who did you think is buying stocks and raising the stock market????
QE3 is already here in stealth mode folks. Bernanke is buying equitities thru the banks with zero percent loans. We are beyond crisis mode folks we are having a total meltdown of the financial system right now and it is not going to end well.
With the stocks rallying so much like this, if the gains continue to hold, the Federal Reserve will see no reason to do another around of stimulus, and the ECB talk sounds just like that, talk. It's been the SAME situation detriorating month after month, yet they do nothing because they know "investors" will rally on TALK so there's no need for monteary action. At this rate, the stocks will close Friday back at 13,000. So why should they Federal Reserve/ECB do anything again?
If Ben even remotely hints of more QE, I'd call that an act of terrorism.
think about it ~ if the government was to have flushed this recovery money THRU individuals we'd not only have cleared out a lot of debt but the money would STILL reach the banks for them to do whatever with.
>>>>>If Ben even remotely hints of more QE, I'd call that an act of terrorism. <<<<<
If it were up to conservatives -- we would simply get our money back from Iraq in the form of oil... I don't like how we fought the Iraq or Afghan wars -- we don't fight to win and it causes us to lose too many precious lives.
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[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
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