Stock Market News for January 05, 2010 - Market News
U.S. stocks started the new year on a positive note as optimism on the manufacturing front and corporate deal-making boosted investors’ appetite for riskier assets. A weak dollar also helped the broader market as the major indexes gained at least 1.5%, holding on to gains recorded in early trading.
While a weak dollar helped push commodities prices and stocks higher, Swiss drugmaker Novartis’ announcement that it would pay $39 billion to acquire a controlling stake in eye-care company Alcon (NYSE:ACL) was viewed positively by the Street. The deal would involve acquiring a 52% stake in Alcon from Nestle. Meanwhile, a freezing weather sent crude prices higher.
The Dow Jones industrial average jumped 156 points, or 1.5%, to 10,584. The S&P 500 index climbed 18 points, or 1.6%, to 1,133. The tech-heavy Nasdaq composite gained 39 points, or 1.7%, to 2,308. All three major indexes closed at 15-month highs. The US dollar retreated 0.5% against a basket of currencies, sending gold prices up 2% to $1118.30.
Volume on the NYSE jumped from the prior week's below-average levels, with 1.015 billion shares changing hands. Gains were broad-based, as advancing shares outpaced decliners by a four-to-one margin. All ten S&P industry sectors ended in the green, led by basic material shares (+3.5%) and oil and gas shares (+3.0%). However, utilities (+0.4%) failed to keep up with the broader market.
Home Depot (NYSE:HD), one of only three DJIA components to end the day in the red yesterday, fell 0.9% even as most shares from the sector added to their past weeks' tally. Meanwhile, a UBS (NYSE:UBS) analyst in a CNBC interview advised that the group is 10% to 15% overvalued. Nevertheless, Expectations of growing demand and higher prices built on an improving jobs picture sent Beazer Homes (NYSE:BZH) up 8.7%, DR Horton (NYSE:DHI) 2.7%, and Hovnanian Enterprises (NYSE:HOV) 3.7%.
A Deutsche Bank (NYSE:DB) upgrade sent shares of refining sector higher. Tesoro (NYSE:TSO) rose 9.3%, Frontier Oil (NYSE:FTO) jumped 8.3%, Valero (NYSE:VLO) rose 6.8%, and Sunoco (NYSE:SUN) advanced 6.0%.
Fed-speak failed to dampen New Year spirits. Fed Governor Duke projected continued high US unemployment in 2010, resulting in low rates for an "extended period." And Vice Chairman Kohn advised the central banks is fully equipped to withdraw its record monetary stimulus dollars from hiking interest rates to selling assets.
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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