Stocks waver after S&P 500 hits 4-year high

The Dow also sets a multiyear high before turning lower. European traders hope the ECB will help resolve the debt crisis. Urban Outfitters trounces expectations. Best Buy posts a drop in profit and comparable sales.

By Melly Alazraki Aug 21, 2012 9:19AM

Updated at 12:13 p.m. ET


Stocks trimmed earlier gains Tuesday after following European markets higher on hopes that meetings this week on Greece and a new crisis plan by the ECB will help resolve the eurozone debt crisis. 


The Dow Jones Industrial Average ($INDU) was up 3 points at 13,274. The S&P 500 ($INX) was up 3 point at 1,420. The Nasdaq Composite ($COMPX) was up 4 points at 3,080.


Wall Street finished basically flat Monday. But in the first minutes of the open, the S&P 500 advanced past the highest closing level in four years. The Dow also advanced earlier past its 2012 closing high of 13,279.32 from May 1. If it closes above that level, it would be the highest since December 2007. While recent weeks were quiet, markets steadily drove higher on hopes that central banks will act soon to stimulate their economies, and were further boosted by the perception of lower risk from the euro crisis.

 

Investors also await the Federal Reserve minutes, to be released Wednesday, of its two-day meeting that ended on Aug. 1. The notes could give a clearer picture of the U.S. economy as well as the Fed's plans regarding further stimulus, which could be unveiled at the end of this month at a Fed meeting in Jackson Hole, Wyo.

It's all about Europe and stimulus plans

European stocks hit 13-month highs and the euro climbed Tuesday. Another article on The Daily Telegraph rekindled hopes that the European Central Bank is preparing a bond rescue plan to cap the borrowing costs of troubled sovereign borrowers, specifically Spain and Italy. Germany's central bank, the Bundesbank, continued its criticism of the measure.

 

Also this week, Greek Prime Minister Antonis Samaras meets with German Chancellor Angela Merkel, French President Francois Hollande and Eurogroup chief Jean-Claude Juncker to discuss more funding from the EU, International Monetary Fund and ECB.


The euro rose to a two-week high against the dollar and a six-week peak versus the yen Tuesday, lifted by talk of the ECB's possible strong action plans. The U.S. dollar lost ground, hitting its lowest in two weeks.

 

Oil, too, got a boost from the reports out of Europe as well as by supply concerns triggered by escalating conflicts in Syria and Yemen and Iran's dispute with Israel, the U.S. and Europe, which has led to an embargo on Tehran's crude shipments, Reuters reported.

 

Asian markets also ended higher Tuesday, helped by Chinese state media reports of policy plans to boost consumption spending.

 

Stocks to watch

Urban Outfitters (URBN) shares soared more than 15% after the retailer trounced analyst expectations, saying net income rose 8.1% to $61.3 million, or 42 cents a share, from $56.7 million, or 35 cents, a year earlier. Analysts' average estimate called for 33 cents a share.

 

Best Buy (BBY) shares fell after the consumer electronics retailer reported that net earnings fell as same-store sales declined. Best Buy also cut its fiscal-year profit outlook and suspended its share buybacks for the year.


Barnes & Noble (BKS) shares rose after the bookseller reported a narrower loss in its fiscal first quarter that topped analyst expectations as it posted higher retail same-store sales.

 

Facebook (FB) remained in the headlines after director Peter Thiel sold roughly $400 million worth of shares in the social network last week at the end of the lockout period, cashing out most of his stake. Facebook shares have lost 50% of their value since their IPO.

 

Apple (AAPL) became the most valuable public company in history Monday, surpassing $623 billion. The chief executives of Apple and Samsung Electronics have talked but did not settle the high-stakes patent dispute between the two electronics companies, a Samsung attorney said in court on Monday.

 

Dell (DELL) will report its quarterly results after the close. It is expected to post earnings of 45 cents a share on $14.65 billion in revenue.

 

Citigroup (C) became the first Western lender to issue credit cards in China without co-branding from a local financial institution. Also, CEO Vikram Pandit has rejected the idea of big banks being split up, the Financial Times reported on Tuesday.

 

Global buyout fund KKR & Co L.P. (KKR) has placed a bet on China's $38 billion youth apparel retail market, saying it will acquire a stake in privately held retailer Novo Holdco for $30 million, Reuters reported.

159Comments
Aug 21, 2012 9:48AM
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I'm optimistic that Europe will PRINT (Debase) it's way out of their debt crisis.  The people that were responsible and frugal will be punished and the debtors rewarded for borrowing and spending money they cannot pay back.  

The problem is just being kicked down the road, as the governments there, for all the calls for austerity, STILL have not balanced their budgets.   Greece, Spain, Italy, France, Portugal are all running massive budget  deficits.   Is there any hope that these sums can be paid back without the printing press?   The answer is NO.  Stay away from all fiat currency and bonds.   Stay in Stocks and Specie...  Massive inflation is coming...  
Aug 21, 2012 11:41AM
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How can the market be at a four year high with the US and  world economy  in the toilet?   Talk about the ultimate disconnect.  

Aug 21, 2012 10:23AM
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"... a new crisis plan by the ECB will help resolve the eurozone debt crisis."

Is that the same as how a new bottle of Jack will 'resolve' one's alcoholism?
Aug 21, 2012 10:22AM
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The only thing thats making this train run is money stolen from the tax payers of this country. All the hope in this market is the hope they can con you back into it....
Aug 21, 2012 11:13AM
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The biggest and baddest bubble is about to burst. Why? read on and see for yourself!

 

And I quote:

"For all the bluster of Obama, pre- and post-2008, as well as that of Attorney General Eric Holder concerning the alleged criminal activities on Wall Street and the Mexico border, there have been zero Wall Street prosecutions under Obama/Holder. Compare that with his predecessors Bush and Clinton:
Bush: 1,300 convictions; Clinton: 1,000 convictions; Obama: Zero attempts."

Aug 21, 2012 10:28AM
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Why is any rational person "optimistic" about Europe?  Wishful thinking?  Voluntary delusion?
Aug 21, 2012 10:14AM
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Timmy the Tax Cheat is in Euriope to prop up the central bank's printing of mo' money.

 

Hope and Change, mmm, mmm, mmm.

Aug 21, 2012 10:18AM
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slight yes, slightly no.  i think the frugal people who paid in full or paid off their homes will still come out ahead.  smugly we can stay calm when the collapse happens.  no one is taking my house.  it is sad that the cash i accumulated will lose it's value.  but i'll still come out ahead instead of deeper debt. 

 

>>>>> The people that were responsible and frugal will be punished and the debtors rewarded for borrowing and spending money they cannot pay back.  <<<<<

Aug 21, 2012 11:34AM
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hope, hope, hope...that's what driving the "market" up.  Why?  Because the "market" is now nothing but a lowest volume in decades, computer algo driven, playground for overleveraged HFT.  This is not about anything real and certainly not about true data.  Real traders and retail investors are gone.  This is going to end very badly folks.  Don't believe the corporate shill media (such as this site).
Aug 21, 2012 11:28AM
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As far as I'm concerned the DOW rising or falling won't change Obama's 4 year track record of looking bad.
Aug 21, 2012 11:05AM
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Bubble, bubble, toil and trouble chanted the stock market den of thieves....
Aug 21, 2012 9:43AM
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Higher - ECB will help; lower - Germany and Nordics gritching; wait - higher ECB says plans in place; lower - loan rate above 7%.....ha   ineptitude as in the states
Aug 21, 2012 10:58AM
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As I have said before; do not invest on hope! One of the reasons you're seeing movement in our markets is from people dumping their fakebook, then putting the proceeds into more stable investments-like Apple. As far as the ECB goes, we've been through this many times this year as the EU tries to put lipstick on that pig to bring in investors to buy the bonds. Germany is resisting, or more specifically, Bundesbank is highly cirtical of this. I'd continue to distance myself from any of the EU banks and other companies that do business in Europe. With IBM, Caterpillar, ect.... having large positions over there, we'll have to constantly monitor our positions to protect our clients, and our own assets. Don't go looking for that easy money from the Fed. either-No stimulus needed. Just keep paying down that debt, as much as you can so you'll be in good financial shape come 2013.

Aug 21, 2012 11:26AM
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One can be Pro Life and disagree with Akin and think he needs to go away.
Aug 21, 2012 11:09AM
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Monday- stocks down on  worries about Euro crisis- lemmings sell off- 
Wednesday-Fri stocks up on " Euro good news"  Lemmings buy in- 
Wall street takes in more hundreds of millions on trades.
I'm no financial Guru, but if my perpetually unemployed brother in law who owes me 1000.00 bucks comes over on Monday claiming he is going to win the lotto this week, I don't loan him more money in hopes of being paid back from his lottery winnings.  He is a flake and will be broke for the rest of his life, just like Greece, Spain, Italy etc.
Aug 21, 2012 11:25AM
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no jobs here, no prosperity, tons of communist rhetoric coming from the osama regime, bullsh it promises, raiding medicare to the tune of 716BILLION dollars to fund osamacare that nobody' wants and in actuallity it just can't be afforded, and more than half of the states aren't goning to initiate any healthcare "exchanges" so osamacare is dead in the water in those states, unemployment is 17% in REALITYVILLE, and the market goes up on European "optimism" and we the people here in the United States of America are in a death spiral economically, osama can't run on his record since it's a total and complete FAILURE!!!! hell guess the market's gotta look to European optimism to rally, cuz it's got no positive news here to rally for, that's truly pathetic!
Aug 21, 2012 10:43AM
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Where have all the commies gone ?

Nary a lefty amongst us !

Aug 21, 2012 11:33AM
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This Akin guy is a complete idiot....
Aug 21, 2012 11:36AM
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Mitt & Paul are America's only hope. Obama is for the lazy and worthless dopes which pretty much describes the fools on this forum!

 

Go Mitt & Paul go. SOS we are sinkin' in crap!

Aug 21, 2012 10:09AM
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ah yes "optimism" so tangible, so durable, so "you can lay your hands on it" believable, meanwhile back in realtyville gas prices soaring, housing down, but the permits to build them are up? hmmm more "optimisim" too bad you can't cash that in at the bank, unemployment in 44states up, oops!! what? no "optimisim" that it'll go down?? oh right for that to happen we need to get rid of that false black muslim messiah before there's no "optimisim" to reverse all this economic atrocity
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