Stock Market News for July 9, 2010 - Market News

Some solid retail sales numbers and reassuring signs from the job market sent U.S. stocks higher for a third day on Thursday even as the International Monetary Fund noted the global economy would grow faster than expected this year. 

After breaking through the 10,000 threshold Wednesday, the Dow Jones industrial average rallied another 121 points taking its three day advance to an impressive 452 points.  As pessimisms about the global economic recovery dissipated, the broader market trudged higher and stocks cemented their gains as some department store operators reported strong June comparable sales numbers. 

International Monetary Fund’s improved global growth forecast for 2010 also seemed to boosting sentiments even as the agency noted downside risks were more visible now.  In its latest assessment of the global economy, the IMF pointed to the better-than-expected growth in Asia and other emerging economies but noted the fiscal mess in Europe continued to be a cause for concern.  Meanwhile, ECB President Jean-Claude Trichet’s remarks that economic signs are encouraging and the proposed stress tests on banks would be a confidence building exercise sent the euro to a two-month high against the US dollar.  However, the euro is down 12% against the dollar since the start of the year.

The technology-laden Nasdaq composite index gained 16 points, or 0.7%, and the broader S&P 500 index added 10 points, or 0.9%, as investors shook off some initial caution. Gains were broad based, with 27 of the 30 Dow components closing the day in the green.  Consumer-staples were the flavor of the day, with Procter & Gamble PG, Coca-Cola KO and McDonald’s MCD leading the advance.  DuPont DD, a Dow component, rose 3%, while fellow components American Express AXP rising 2.4%, and Boeing BA adding 2.5%. 

Among the S&P500 industry sectors, gains were led by basic material shares (+1.7%), consumer goods (+1.4%), oil and gas (+1.3%), industrials (+1.2%), telecommunications (+1.2%), health care (+1.0%), utilities (+0.8%), consumer services (+0.8%), financials (+0.7%), and technology shares (+0.5%).

Meanwhile, improving growth assumptions sent crude prices higher even as hurricane-related worries disappeared somewhat.  This week, oil prices have gained 4.9%.  Crude prices moved past the $75 level, gaining 37 cents to settle at $75.81. US crude supplies fell a more-than-estimated 5 million barrels last week.

Same-store-sales increased 3.1% in June, a tad below expectations of a 3.2% rise.  The pack showed mixed returns, with such department stores as JC Penney JCP, Nordstrom JWN, and Macy M posting estimate-beating numbers, while American Eagle AEO and Wet Seal WTSLA lowered earnings forecasts due to their aggressive pricing mechanisms.