Stock Market News for June 16, 2010 - Market News

Easing global economic worries and a rallying euro sent stocks sharply higher on Tuesday, with industrial and technology companies leading the advance.  Solid demand for European debt helped clam jitters that Europe’s finances are in trouble and would weigh on the global economic rebound.

After a number of erratic sessions, stock indexes managed to hold on to the gains till the closing bell – a sign that confidence was slowly returning to the markets.  Trading volume, however, remained thin as many participants chose to stay away.  On the New York Stock Exchange, advancing shares outpaced declining issues by a six-to-one margin on volume of 1.17 billion shares.

A slump in home constructions and application for building permits has sent this morning’s US stock futures lower.  The euro, which has been rallying for the past six days, is showing signs of weakness this morning.  However, reports that the yields on 10-year Spanish bonds rose to their highest in more than two years put some stress on the Spanish banking system but failed to weigh on the European bourses today.

Boeing’s BA shares jumped 4.1% after the company said it expects demand for commercial planes to grow in the next few years.  For the second time in the past two months, Boeing said it will increase production of 737s.  Illinois Tool Works ITW was another notable gainer, rising 2.5%, after it raised the lower end of its second-quarter earnings outlook. 
 
The Dow Jones industrial average surged almost 214 points, or 2.1%, to 10,404.77, with technology components alone contributing more than 100 points.  The index, however, is still down 0.2% this year.  All thirty DJIA components marked gains on the day, led by advances of more than 4% in American Express AXP, Microsoft MSFT, Boeing BA, and Caterpillar CAT.  The technology-dominated Nasdaq Composite index outperformed with a 2.8% jump.  The rally in stocks helped the S&P 500 index break through its 200-day moving average.  The index jumped 25.60 points, or 2.4%, to 1,115.23, above its 200-day moving average of 1108.

The strength in technology stocks was built on a research report by International Data Corp. that predicted robust demand for personal computers this year.  Meanwhile, in its earnings release, Best Buy BBY also noted strength in high-margin notebook PC sales.  Semiconductor industry’s expectations for a recovery in demand got a stamp of approval from Taiwan Semiconductor Manufacturing Company which raised its target for global chip-industry sales from 22% to 30%.

A regulatory filing from American Express noted the number of delinquencies fell to 2.9% in May from 3.1% in April.  Best Buy’s earnings disappointed but its report of strength in notebook PC sales helped send Microsoft MSFT shares higher.  At the Wells Fargo Security Conference, Caterpillar maintained full-year guidance.