Stocks again registered a triple-digit session for the third
trading day in the past four. In contrast with Friday, which was
off 159 Dow points, yesterday the index rose 143 points. Again the
markets were directly influenced by the headlines of the day,
focusing on some very positive economic reports.
A Commerce Department report showed that consumers cut savings
and increased spending in March, giving the consumer discretionary
sector a boost. And the Institute for Supply Management (
) reported that April was the strongest month in almost six years
for U.S. factories, and that had direct impact on industrial
stocks, which rallied sharply. Aditionally, U.S. construction
spending rose for the first time in five months in March.
Both Ford (
) and General Motors reported that car and truck sales were up
25% in April. And Toyota Motors (
) said that its April sales increased by 24%, while Honda (
) posted a 13% increase.
Materials stocks lagged and became the only major sector not to
show a gain yesterday. The U.S. dollar was blamed for that decline
since it was up 0.6%. The gains for the dollar were primarily
against the euro and the yen following Greece's pact with the
European Union, which will provide Greece with a 110 billion euro
financial aid package. But even that pact has not yet been approved
by Germany, and other doubts regarding the stability of Spain,
Italy, Ireland and Portugal remain.
Continental Airlines (
) and UAL Corp. (
) agreed to merge. And that merger led to speculation that other
airlines may also agree to talks.
At the close, the Dow Jones Industrial Average (
) was up 143 points to 11,152, the S&P 500 (
) gained 16 points to 1,202, and the Nasdaq (
) rose 38 points to 2,499.
The NYSE traded 1.2 million shares with advancers ahead of
decliners by 4-to-1. The Nasdaq crossed 628 million shares, and
advancers led by almost 3-to-1.
Crude oil for June delivery rose 4 cents to $86.19 a barrel, and
the Energy Select Sector SPDR (
) was up 67 cents, closing at $60.58.
June gold rose $4.40 to close at $1,185.10 an ounce as more
Europeans bought the metal as a safe haven against the continuing
economic crisis in Greece. The PHLX Gold/Silver Sector Index (
) fell 2.4 points to close at 176.57.
What the Markets Are Saying
Volatility has returned to the stock market after almost a
three-month absence. The standard measure of volatility is the CBOE
Volatility Index (
). After languishing within a daily trading spread of a point and a
half, the VIX's average daily spread for the past week has been
almost 2.5 points, and on April 27, it was a mind-bending 5.25
has increased, but with lower volume on the upside than on the
downside. Despite the bulls' ability to bounce back after big down
days like Friday, they have not been able to achieve the volume of
the bears, nor have they been able to capture the size of the daily
spreads that the bears have recorded.
So even though the bulls have rallied, they have yet to top the
loss of the prior move down. Even when putting together Wednesday
and Thursday's back-to-back advances, they add up to an advance of
176 Dow points versus Tuesday's decline of 214 points. And
yesterday's advance of 143 points compares to Friday's decline of
The bulls are going to have to do better if they want to turn
the market around and slice through the April 26 intraday high at
Dow 11,258. Until they do, we'll stay on the defensive.
Today's Trading Landscape
Earnings to be reported before the opening
Alliant Energy, Alvarion, American Tower, Ameristar Casinos, Animal
Health International, Archer-Daniels, ArvinMeritor, Baker Hughes,
Beazer Homes, Bill Barrett, Blount International, Boyd Gaming,
Broadpoint Gleacher Securities, BTU International, Cabela's,
Checkpoint Systems, Clayton Williams Energy, Cognizant Technology
Solutions, Corinthian Colleges, Cornerstone Therapeutics, CVS
Caremark, Cynosure, DineEquity, Domino's Pizza, Duke Energy, El
Paso Electric, Emerson Electric, FirstEnergy, FirstMerit Corp.,
Fresh Del Monte, Fundtech, Fushi International, Gaylord
Entertainment, Glatfelter Co., Great Wolf Resorts, GTx,
Haemonetics, Hawk Corp., Headwaters, Health Net, Henry Schein,
Ikanos Communications, Impax Labs, Inergy, Inland Real Estate,
Macerich, Magellan Midstream, Marathon Oil, Marsh McLennan, Martin
Marietta, MasterCard, Merck, Molson Coors Brewing, Monotype
Imaging, Navigant Consulting, NiSource, NYSE Euronext, Och-Ziff
Capital, Overseas Shipholding, Pantry, Par Pharmaceutical, PennyMac
Mortgage, Pfizer, Phoenix Technologies, Pinnacle Airlines, Portland
General Electric, Radian Group, Ritchie Bros, Rowan Companies, RTI
International Metals, Sempra Energy, Senior Housing, Sirius XM
Radio, Spectra Energy, St. Joe Company, Steven Madden, Suncor
Energy, Techne, Tenet Healthcare, Teva Pharmaceutical, Thomson
Reuters, Unit Corp., Vornado Realty Trust, W&T Offshore,
Westlake Chemical and Wisconsin Energy.
Earnings to be reported after the close include:
3D Systems, 3Par, Altra Holdings, American Capital, American
Medical, American Reprographics, Argonaut Group, Atmel, Atwood
Oceanics, Bio-Rad Labs, BRE Properties, Bway Holding, CAI
International, Calamos Asset, Cambrex, Catalyst Health Solutions,
Cephalon, Chesapeake Energy, Comfort Systems USA, Cray, Diamondrock
Hospitality, DigitalGlobe, Dolan Media, Dollar Financial,
Double-Take Software, Eclipsys, Endurance Specialty, Esco
Technologies, Evergreen Solar, Exco Resources, Federal Realty
Investment Trust, FEI, Force Protection, Glu Mobile, Grand Canyon
Education, Healthsouth, Hersha Hospitality Trust, Hill-Rom,
Integrated Device, Intrepid Potash, j2 Global, Jack Henry, Kenexa,
Kforce.com, Kindred Healthcare, Kinross Gold, LECG Corp., Masimo,
Mueller Water, Myriad Genetics, Onyx Pharmaceuticals, OpenTable,
Peet's Coffee, Pioneer Natural Resources, RehabCare, Republic
Airways, SBA Communications, Stone Energy, Symmetricom, Syniverse
Holdings, Tal International, TECO Energy, True Religion, Union
Drilling, Unum Group, USEC, Watts Industries, Web.com, WebMD
Health, World Fuel Services, Wright Medical, XL Capital, ZipRealty
Economic reports due:
ICSC-Goldman Sachs store sales, Redbook, factory orders (the
consensus expects -0.1%), and pending home sales.
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