Mid-Day Update: Markets Higher on Hope of Eurozone Action to Contain Crisis; S&P Hits Four Yr Highs

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Markets are moving higher with the S&P 500 hitting a new four-year high as investors look toward the European Union where leaders said that they would take steps this week to contain the debt crisis. While no action was outlined specifically, the news was welcome as it might prompt other regions - includin United States - to also stimulate their economies. Investors hope this will lead to increased demand say for commodities and exports, which translates back into corporate profits and improving earnings outlooks. For every stock that declined this morning, three increased.

The gains came in spite of less than encouraging domestic economic reports. The International Council of Shopping Centers (ICSC) and Goldman reported a sharp 1.5% decline in sales for the August 18 week, adding to last week's decline of 0.3%. The decrease pushed year over year store sales to 3.1%, down from 3.6%. ICSC-Goldman is a weekly measure of comparable store sales at major retail chains and accounts for roughly 10% of the market. The idea behind it is that by tracking what consumers are up to, it may be easier to see where the economy is headed given that two-thirds of the economy stems from consumer spending.

Redbook was slightly more encouraging, posting a year over year store sales change of 1.9%, up from 1.8%. It is a soft rate but still represents an increase over the four-week average of 1.7%. Redbook is a weekly measure of sales at chain stores. It is less consistent than the weekly ICSC index but it is highly-correlated with the general merchandise portion of retail sales, which covers about 10% of total retail sales.


Atlanta Federal Reserve Bank President Dennis Lockhart also spoke this morning. He said that the introduction of monetary easing is currently in an "iffy" column. He explained that while it is appropriate to keep fed fund rates low through 2014 it is not appropriate to use monetary policy too aggressively without introducing some fiscal reform. Lockhart continued by saying that any additional stimulus would have to be weighed carefully in terms of costs and benefits.

Crude oil is up $1.22 to $97.47 per barrel. Natural gas is up $0.03 to $3.02 per 1 million BTU. Gold is up $18.20 to $1,641.20 an ounce, while silver is up $0.67 to $29.35 an ounce. Copper is up $0.08 to $3.46 per pound.

Among energy ETFs, the United States Oil Fund is up 1.24% to $36.27 with the United States Natural Gas Fund is up 1.16% to $19.16. Amongst precious-metal funds, the Market Vectors Gold Miners ETF is up 2.98% to $46.99 while SPDR Gold Shares are up 1.09% to $158.98. The iShares Silver Trust is up 1.74% to $28.44.

Here's where the markets stood at mid-day:

US MARKETS

NYSE Composite Index up 38.92 (+0.48%) to 8133.25

Dow Jones Industrial Index up 11.55 (+0.09%) to 13283.27

Nasdaq Composite Index up 6.97 (+0.21%) to 3082.77

S&P 500 up 2.90 (+0.20%) to 1420.82

GLOBAL SENTIMENT

FTSE 100 up 42.78 (+0.73%) to 5866.65

DAX up 57.15 (+0.81%) to 7090.42

CAC 40 up 36.29 (+1.04%) to 3516.66

Nikkei 225 down 14.24 (-0.16%) to 9156.92

Hang Seng Index down 4.18 (-0.02%) to 20100.09

Shanghai China Composite Index up 11.31 (+0.54%) to 2118.27

NYSE SECTOR INDICES

NYSE Energy Sector Index up 44.93 (+0.35%) to 12764.46

NYSE Financial Sector Index up 37.79 (+0.82%) to 4635.47

NYSE Healthcare Sector Index up 8.11 (+0.11%) to 7646.30

UPSIDE MOVERS

DEXO (+37%) Will combine with SuperMedia Inc. ( SPMD ) in a stock-for-stock merger of equals, creating a national provider of social, local and mobile marketing solutions through direct relationships with local businesses.

URBN (+17.5%, hit year highs) Upgraded to Hold from Sell at Brean Murray.

NDSN (+11.7%, hit year highs) Reported late Monday that Q3 adjusted earnings were $1.06 a share, beating expectations of $0.99 per share. It also raised its Q4 guidance. Revenue grew 22% to $380 million, topping the analyst consensus of $357 million, according to Capital IQ.

DOWNSIDE MOVERS

BBY (-1.7%, hit year lows) Reported Q2 adjusted EPS of $0.20 per share, under analyst estimates of $0.31. The company reported Q2 revenues of $10.55 bln, falling short of consensus expectations of $10.63 bln and last year's $10.86 bln. The company also suspended its guidance

CIS (-10.3%) Post yesterday second quarter 2012 adjusted net income of $3.5 million, as compared to $8 million in the year-ago quarter, exceeding guidance of $3.2 million. Revenues totaled $62.1 million, beating the $62 million analysts' estimate. In the same period last year, revenues were $59.4 million.

CHRM (-10.5%) Reported in Monday's evening session Q2 revenue of 35.98 mln, in line with the analyst estimates of $36.00 mln and well under last year's $67.28 mln. The company also reported Q2 earnings of $0.01 per share, falling short of consensus expectations of $0.05 and under last year's $0.26.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright (C) 2014 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.


This article appears in: Investing , Commodities

Referenced Stocks: SPMD

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