Stock Market News for February 12, 2010 - Market News
Reports that European Union leaders had agreed to a Greek bailout plan and a sharp drop in U.S. jobless claims sent U.S. stocks up Thursday, with all the three major indexes recording gains of at least 1%. Data from China that showed a moderating consumer price inflation also helped investors’ sentiments.
The Dow Jones industrial average jumped 106 points to close up 1.1% at 10,144. The NASDAQ advanced 1.4% at 2177, and the S&P500 gained 10 points, or 1%, to close at 1078. As investors grew comfortable with developments in Europe, expectations for global growth intensified sending crude prices and commodities higher. Volume on the NYSE, nevertheless, remained a modest 1.076 billion shares, with issues that advanced in price beating those that fell by an almost three-to one margin. US Treasuries finished mixed on the session with the 10-year closing off 1/32 and its yield up to 3.734%.
Today's premarket futures, however, suggest some weakness on concerns over China's tightening of its monetary policy as well as the euro zone's insignificant fourth-quarter GDP growth of only 0.1%. China raised banks' reserve requirements by another 50bps. Investors therefore will have their focus set on reports of further monetary tightening in Beijing in response to yesterday's report of a lending surge. The developments have sent the US dollar up on its safety play appeal.
On Thursday, gains were broad based with only two DJIA components ending the day in the red. Those leading the gains included Caterpillar (NYSE:CAT), Alcoa (NYSE:AA), and 3M (NYSE:MMM) on their appeal as global economic recovery plays. Shares in Caterpillar (NYSE:CAT) jumped 5.6% after a US Department of Agriculture report projected net farm income will gain 12% this year following last year's 35% decline. Shares in Deere (NYSE:DE) rose 4.5% on the news. Bernstein upgraded 3M (NYSE:MMM) to "outperform," noting "3M will continue to beat and raise guidance on the back of relative strength in its end markets and competitive positioning." Shares in the company rose 2.1%.
All ten S&P 500 industry sectors recorded gains. Basic material shares were the leading gainers, increasing 2.3%, followed by oil and gas (+1.6%), industrials (+1.5%), technology (+1.3%), consumer goods (+1.2%), consumer services (+1.2%), health care (+0.8%), utilities (+0.6%), telecommunications (+0.5%), and financials (+0.3%).
Homebuilder shares rallied after reports said US home sales grew 14% in the fourth quarter on Federal programs to purchase mortgage bonds and provide tax credits for new buyers. Lennar (NYSE:LEN) shares surged 8.8% after the firm said it agreed to take a stake in two loan portfolio from FDIC. Shares in Pulte Homes (NYSE:PHM) rose 4.3%, and Beazer (NYSE:BZH) rose 3.8%.
Chevron (NYSE:CVX) shares rose 1.4% and Royal Dutch Shell (NYSE:RDS.A) advanced 3.1% on reports that the IEA had raised its 2010 global demand projection by 170,000 barrels to 86.5 million barrels. Crude prices advanced 76 cents to $75.28.
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