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.

145Comments
Aug 21, 2012 10:37AM
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Killuminati the movie you tube we've been sold out. Eisenhower and JFK tried warning us.
Aug 21, 2012 10:28AM
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Why is any rational person "optimistic" about Europe?  Wishful thinking?  Voluntary delusion?
Aug 21, 2012 10:23AM
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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 10:21AM
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Best Buy 2Q profit drops 90 pct, misses estimates
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 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 10:09AM
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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
Aug 21, 2012 9:57AM
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The metals are on a run. I'm selling some into this run as usual, but holding the more valuable coins as I also expect that they won't let the market down and will print away.
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 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
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