Stock Market News for May 4, 2010 - Market News
U.S. stocks rallied Monday, helped by a number of positive economic data and reports that European leaders and the International Monetary Fund had agreed to an aid plan worth about $146 billion for Greece. United Airlines’ plans to acquire Continental in a $3 billion all-stock deal also encouraged investors and helped stocks stage a remarkable comeback after Friday’s drubbing.
The blue-chip Dow average jumped 143 points and reclaimed Friday’s almost entire 159 points drop. It was the Dow’s biggest single-session gain since February 16. The broader Standard & Poor's 500 index jumped 15.57 points, or 1.3%, to 1,202.26, and the tech-heavy Nasdaq composite index climbed 37.55 points, or 1.5%, to 2,498.74. On the New York Stock Exchange, advancing shares beat those that fell in price by over three to one on volume of 1.2 billion shares. Market’s fear gauge, the CBOE Vix Volatility Index fell 8.4% to 20.19 Monday Safe-haven assets such as US Treasuries weakened, with the 10-year down 9/32 and its yield rising to 3.692%.
On the DJIA, all but one component gained, with Caterpillar (NYSE:CAT) rising 2.7%, Boeing (NYSE:BA) up 2.7%, and General Electric (NYSE:GE) adding 2.1%. Auto sales surged, with sales at Ford (NYSE:F) and Chrysler rising 25% year-on-year, Toyota’s (NYSE:TM) up 24% and General Motors’ up 6.4%. Alcoa (NYSE:AA), off 2.1%, was DJIA’s only declining component. Copper prices fell to their lowest in seven weeks.
Material shares were weak yesterday, reflecting concerns related to further tightening measures in China. Beijing lifted banks' reserve requirements 50 basis points on Sunday. Meanwhile, the euro fell against the dollar as jittery investors considered Greece’s ability to implement austerity measures.
All ten S&P industry sectors closed higher on the day, with industrial shares, up 2%, leading the charge, following the strong ISM manufacturing data. Eight of the ten industry sectors marked gains of more than 1%. Industrial shares surged 2%, followed by 1.7% advances in financials and consumer services, 1.5% in technology, 1.4% in utility, 1.1% in telecommunications, 1.0% in oil and gas, 1.0% in consumer goods, 0.6% in healthcare and 0.03% in basic materials.
Meanwhile, new mining taxes proposed by Australia further unsettled markets. Australia announced plans for a 40% tax on mining profits, beginning in 2012. Australia announced plans for a 40% tax on mining profits, beginning in 2012. Peabody Energy (NYSE:BTU), which has made a $3.8 billion takeover offer for Macarthur Coal (NYSE:MCC), has asked for more information regarding the proposed law from the Australian miner.
Financial share gained following Warren Buffett's defense of Goldman Sachs' (NYSE:GS) legal position and the strength of its leadership over the weekend. Goldman shares rose 3%, while American Express (NYSE:AXP) advanced 2.3% and JP Morgan (NYSE:JPM) added 2.2%.
Key companies due to report their earnings today are: Merck (NYSE:MRK), Pfizer (NYSE:PFE), CVS Caremark (NYSE:CVS), Duke Energy (NYSE:DUK), and Emerson Electric (NYSE:EMR).
The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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