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December 2nd, 2011
U.S. stock-index futures rose, indicating that the Standard & Poor’s 500 Index will extend its biggest weekly rally since March 2009, after the unemployment rate unexpectedly dropped in November to a two-year low.
Bank of America Corp. (BAC), the second-biggest U.S. lender by assets, and Citigroup Inc. (C) climbed at least 1.4 percent. Caterpillar Inc. and Schlumberger Ltd. increased more than 0.9 percent, pacing gains among the largest U.S. companies. Western Digital Corp. (WDC) advanced 9.9 percent after the maker of disk drives and networking products raised its quarterly sales forecast.
Futures on the Standard & Poor’s 500 Index expiring this month advanced 1.1 percent to 1,256.9 at 8:44 a.m. in New York. Dow Jones Industrial Average futures climbed 122 points, or 1 percent, to 12,125 today.
“It’s another incremental step in the right direction for the labor market, but we’re still not out of the rut we’ve been in,” John Canally, who helps oversee about $340 billion as an economist and investment strategist at LPL Financial Corp. in Boston, said in a telephone interview. “The components of it were solid. You got a big gain in temporary help work.”
The S&P 500 (SPX) rallied 7.4 percent this week and the market value of global equities increased by more than $3 trillion as the Federal Reserve and five other central banks lowered the cost of dollar funding and China cut the proportion that banks need to hold as reserve capital.
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November 30th, 2011
U.S. stocks rose, sending benchmark gauges higher for a third day, after central banks acted together to make additional funds available to lenders as Europe’s crisis threatens global economic growth.
The Financial Select Sector SPDR Fund (XLF) advanced 3.4 percent after the Federal Reserve and five central banks lowered interest rates on dollar swaps and China cut banks’ reserve requirements. Wells Fargo (WFC) & Co. and Bank of America Corp. (BAC) increased at least 3.1 percent. Alcoa Inc., Halliburton Co. and Caterpillar Inc. (CAT) rallied more than 4.5 percent to pace gains among companies that are most-dependent on economic growth.
The Standard & Poor’s 500 Index gained 2.7 percent to 1,227.76 at 9:39 a.m. New York time. The benchmark gauge rallied 3.2 percent in three days. The Dow Jones Industrial Average rose 321.13 points, or 2.8 percent, to 11,876.76 today.
“Central banks around the world are going back to easing or supporting the marketplace,” Mark Bronzo, who helps manage $24 billion at Security Global Investors in Irvington, New York, said in a telephone interview. “It’s a step in the right direction especially because it’s coordinated. These actions may help global growth not to follow Europe into a recession.”
Global stocks rebounded after China cut the amount of cash that banks must set aside as reserves for the first time since 2008. Equity-futures rallied further as the Fed and five other central banks agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis points and extend their authorization through Feb. 1, 2013. In the U.S., American companies added more workers than anticipated in November, according to a private report based on payrolls.
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November 29th, 2011
U.S. stocks rose, after the biggest gain in a month for the Standard & Poor’s 500 Index, as the biggest increase since 2003 in a gauge of American consumer confidence bolstered optimism in the world’s largest economy.
Yahoo! Inc. climbed 2.3 percent as two people with knowledge of the matter said private-equity firm Thomas H. Lee Partners is considering a bid. Hewlett-Packard Co. gained 2.5 percent after RBC Capital Markets raised its recommendation for the computer maker. Tiffany & Co. slumped 8.8 percent after the world’s second-largest luxury jewelry retailer cited “weaknesses” in sales in Europe and the eastern U.S.
The S&P 500 advanced 0.8 percent to 1,201.67 at 10:17 a.m. New York time, after the benchmark gauge gained 2.9 percent yesterday. The Dow Jones Industrial Average increased 95.86 points, or 0.8 percent, to 11,618.87 today.
“The economic reports have shown that the U.S. has been insulated from all the noise coming out of Europe,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, said in a telephone interview. His firm oversees $550 billion. “Consumers are not really bothered by that, at least not yet. We expect the data to be good. It’s going to be fits and starts, but they continue to move along the right direction in Europe.”
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November 25th, 2011
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will decline for a seventh day, as a surge in Italian borrowing costs at an auction intensified concern about a worsening in Europe’s debt crisis.
Citigroup Inc. and Morgan Stanley each retreated 0.7 percent, pacing losses in financial shares. Halliburton Co. (HAL) dropped 0.3 percent as oil slumped. Amazon.com Inc. (AMZN), the world’s largest Internet retailer, rose 0.1 percent.
S&P 500 futures expiring in December decreased 0.7 percent to 1,152.10 at 8:32 a.m. New York time. Dow Jones Industrial Average futures declined 66 points, or 0.6 percent, to 11,168. The U.S. stock market was closed yesterday for the Thanksgiving holiday and trading will end at 1 p.m. today.
“It is becoming apparent that European bonds are suffering from a buyer’s strike where institutions no longer want to fund European debt,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said in an e-mail. “The equity markets in the United States may test the lows again as there is increasing concern of a major recession in Europe.”
The S&P 500 was headed for a second week of losses, the longest losing streak since September as the burden of government debt grew around the world. The cost of insuring European sovereign bonds against default rose to a record.
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November 22nd, 2011
Stocks and U.S. equity futures erased gains as Spain’s three-month borrowing costs more than doubled at an auction and concern that European leaders are running out of options to solve the debt crisis sent French and Italian yields higher.
The Stoxx Europe 600 Index slipped 0.1 percent at 8:17 a.m. in New York, after earlier climbing 1 percent. Standard & Poor’s 500 futures lost less than 0.1 percent. Spain’s two-year note yield rose 14 basis points to 5.73 percent, with France’s yield nine basis points higher. Copper snapped a three-day decline and gold rebounded from a one-month low.
Spain sold three-month bills at a yield of 5.11 percent, more than double the 2.292 percent yield the last time the debt was offered on Oct. 25. Michael Meister, finance spokesman for German Chancellor Angela Merkel’s Christian Democratic party, said “we haven’t any new bazooka to pull out of the bag.” Stocks (MXWD) gained earlier after Standard & Poor’s and Moody’s Investors Service kept the U.S.’s credit rating unchanged after Congress failed to reach an agreement, setting the stage for $1.2 trillion in automatic spending cuts.
“When you look at valuation measures for global equities, they’re all running well below historical averages,” Shane Oliver, the Sydney-based head of investment strategy at AMP Capital Investors Ltd., said in a Bloomberg Television interview. “Very tough economic conditions are already priced in, probably something approaching a global recession.”
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November 21st, 2011
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its longest decline since September, as concern grew that $1.2 trillion in automatic federal budget cuts will be triggered if lawmakers fail to reach a deal.
All 10 industries in the benchmark measure declined as 483 out of 500 companies retreated. Morgan Stanley tumbled 6.4 percent, while Hewlett-Packard Co. (HPQ), Caterpillar Inc. (CAT) and Chevron Corp. (CVX) dropped at least 3 percent. The Dow Jones Transportation Average decreased 3 percent. Gilead Sciences Inc. (GILD) plunged 10 percent after agreeing to buy Pharmasset Inc. (VRUS) for about $11 billion in cash. Pharmasset soared 85 percent.
The S&P 500 dropped 2.2 percent to 1,188.79 at 2:10 p.m. New York time. The benchmark gauge has lost 5.5 percent in four days. The Dow Jones Industrial Average declined 298.2 points, or 2.5 percent, to 11,497.96 today after a Democratic aide said the supercommittee that was supposed to dissolve congressional gridlock in Washington is instead on the brink of failure.
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November 17th, 2011
The Standard & Poor’s 500 Index has formed a “triangle” pattern, a sign to analysts who study charts that the rally is about to resume after the benchmark gauge for U.S. stocks rose as much as 20 percent last month.
The S&P 500’s trading range has narrowed since October, as the index stalled after rising to its average level over the past 200 days. Based on the size of this triangle pattern, the index may climb as high as 1,430, said Craig W. Johnson, a technical market strategist with Piper Jaffray Cos.
“A triangle or a pennant formation forms during the middle part of a move, and typically these patterns resolve themselves in the direction of the preceding trend,” Johnson, based in Minneapolis, said in a telephone interview yesterday. “That would suggest that this is ‘the pause that refreshes’ before we get the next leg up.”
The S&P 500 recovered after sinking to as low as 1,074.77 on Oct. 4, posting the best monthly performance since 1991, as European leaders took steps to contain the region’s debt crisis and American companies beat earnings forecast for 11th straight quarter. The rebound peaked at 1,292.66 on Oct. 27, lifting the index above its 200-day average for the first time since August.
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November 14th, 2011
U.S. companies are buying back the most stock in four years, taking advantage of record-high cash levels and low interest rates to purchase equities at valuations 15 percent cheaper than when the credit crisis began.
Corporations have authorized more than $453 billion in repurchases this year, putting 2011 on track for the third- highest annual total behind 2006 and 2007, data compiled by Birinyi Associates Inc. show. Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) bought shares for the first time, and Amgen Inc. (AMGN) sold debt to fund its buyback. U.S. companies spent 70 percent more on their stock last quarter than a year ago, according to financial filings as of Nov. 11.
Market bulls say the rise shows executives are confident the U.S. economy will avoid a recession. While the Standard & Poor’s 500 Index peaked the last time buybacks were this high, companies in the gauge are generating three times as much cash, price-earnings ratios are lower and 10-year Treasury yields are around 2 percent, data compiled by Bloomberg show. Bears say the increase means companies lack better uses for capital.
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November 11th, 2011
S&P 500 futures rallied, preventing a second straight weekly drop in benchmark indexes, as American consumer confidence topped estimates and Italy’s approval of debt-reduction plans eased concern about Europe’s debt crisis.
All 10 groups in the Standard & Poor’s 500 Index rose as 487 stocks gained. Bank of America Corp. (BAC) and Citigroup Inc. (C) increased at least 2.4 percent as financial shares advanced. Caterpillar Inc. (CAT) and Alcoa Inc. (AA) climbed more than 3.4 percent to pace gains among the biggest companies. Walt Disney Co. (DIS) jumped 6 percent as the largest theme-park operator reported a 30 percent gain in profit, beating analysts’ projections.
The S&P 500 added 2 percent to 1,263.85 at 4 p.m. in New York. The gauge has risen 0.9 percent since Nov. 4, preventing a second weekly drop. The Dow Jones Industrial Average advanced 259.89 points, or 2.2 percent, to 12,153.68. The Russell 2000 Index of small companies gained 2.6 percent. Trading volume dropped to about 6 billion shares, the lowest since July 25, as the Treasury market was shut for Veterans Day.
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November 10th, 2011
The rally that drove the Standard & Poor’s 500 Index up 20 percent since October fizzled after it failed to remain above its 200-day average for a second time.
The benchmark gauge for U.S. equities fell 3.7 percent to 1,229.10 yesterday, dropping below its average in the past 200 days, as surging Italian bond yields spurred concern Europe’s crisis is intensifying. One out of 500 stocks in the index rose, the fewest since June 2010. The measure closed above the 200-day level on two straight days at the end of October, following the biggest monthly rally since 1991, and again on Nov. 8.
Equities surged worldwide starting in the first week of October on optimism European leaders would solve the crisis, driving the S&P 500 out of a price range where it had been stuck since the start of August. Price indicators such as the stock index’s average price are captivating investors, said Brian Barish of Cambiar Investors LLC.
“The S&P 500 failed to break the 200-day and Italy’s debt yields really blew out, so you have a panicky reaction in the marketplace,” Barish, who helps oversee about $8 billion as Denver-based president of Cambiar, said in a telephone interview yesterday. In early October, “the market was poised to rally on almost anything, and it did,” he said. The 200-day average is “where it ran out of gas.”
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