Stock Market News for April 7, 2010 - Market News
Tuesday witnessed a tepid session in which stocks struggled for directions and the Dow average failed to cross the 11,000 mark for a second day. The blue-chip average has not been able to cross that psychologically important mark in the last 18 months.
Minutes from the last Fed meeting revealed policy makers were upbeat about the near-term inflationary pressures even as they kept the “extended period" language unchanged. Investors found solace in Fed’s assessment that conditions "were likely to warrant exceptionally low levels of the federal funds rate for an extended period." However, reports that Greece was not eager to an IMF-sponsored bailout inflated worries about Athens’ ability to control its ballooning deficit.
The S&P 500 index edged up 2 points, or 0.2%, to an 18-month high of 1,189.44. The Nasdaq composite rose 7 points, or 0.3%, to 2,436.81, its best level since August 2008. The Dow Jones industrial average, after rising as high as 10,987.38 earlier in the session, lost a few points to 10,969.99. The market’s measure of volatility, the CBOE Vix, eased 4.6% to 16.23. Volume, however, remained a modest 940 million on the NYSE, where advancing shares beat those that declined in price by an 8 to 7 margin.
Worries that Greece might default increased the US dollar’s safety appeal and the greenback moved up 0.3% in yesterday's trade. A successful Treasury auction of $40 billion in 3-year notes sent prices for US government debt higher, with the 10-year gaining 8/32 in price. Today sees the third of the week's four auctions toward the sale of $82 billion in debt, with $21 billion in 10-years scheduled for today.
A pair of analyst upgrades helped shares from the banking sector. Wells Fargo (NYSE:WFC) raised its ratings on the sector to "market overweight," and noted Bank of America (NYSE:BAC) and PNC Financial (NYSE:PNC) were among the best positioned in the sector. JPMorgan (NYSE:JPM) also raised its rating on U.S. banks, to "market weight" from "overweight." Regional banks’ shares also advanced on a Credit Suisse (NYSE:CS) report that suggested SunTrust Banks (NYSE:STI) could be a possible acquisition target. Shares in SunTrust closed up 3.5%. Regions Financial (NYSE:RF) shares jumped 4.4% after Credit Suisse increased its target price and earnings estimate on the bank.
Financials were the leading gainers among the S&P 500 industry groups, rising 1.1%. Following financials were utilities (+0.9%), basic materials (+0.4%), consumer services (+0.2%), oil and gas (+0.04%), tech (+0.03%). However health care (-0.2%), telecommunications (-0.3%), and consumer goods (-0.4%) sectors closed the day in the red.
Home building stocks took a hit after Credit Suisse (NYSE:CS) downgraded several home builders. Shares in KB Home (NYSE:KBH) closed down 2.8%, Pulte Homes (NYSE:PHM) was off 2.5%, Toll Brothers (NYSE:TOL) retreated 1.8%, and Lennar (NYSE:LEN) closed off 1.5%. The analyst noted the upcoming expiration of the government's home-buyer tax incentives could pressure new home orders beginning in May.
Shares in Massey Energy (NYSE:MEE) plunged more than 11% following news of a massive explosion at one of its West Virginia mines that left 25 coal miners dead.
The release of minutes from the last month’s FOMC meeting indicated members' confidence about a strengthening recovery. But there was consensus that the recovery still faced the headwinds of "weak labor market conditions, lower housing wealth, tight credit and modest income growth."
Interest will also be centered on Fed speakers as they update interest rate policy intentions. Among those speaking are: William Dudley in NYC, Chairman Ben Bernanke in Dallas and Thomas Hoenig in Santa Fe.
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
