Stock Market News for May 13, 2010 - Market News

Stocks closed sharply higher Wednesday, erasing last week’s steep losses, as Spain announced sweeping measures to curtail spending and debt-strapped European countries’ problems showed signs of easing.  A slew of positive economic data and IBM’s increased profit outlook added to bullish sentiments.

The Nasdaq composite index, dominated by technology stocks, led major indexes with a 2.1% jump after International Business Machines IBM said it expects to earn at least $20 per share by 2015 as companies spend more on technology.  Shares in the company closed up 4.56% at $132.68 and were the biggest Dow gainer.  The technology-driven rally sent the Dow Jones industrial average up 149 points, or 1.4%, to 10,897, as other blue-chip technology issues also gained.

Cisco’s CSCO shares advanced 3% in anticipation of strong earnings.  After the close, the company said third-quarter earnings jumped 63% to $2.2 billion.  Intel INTC rallied 3.6% while Hewlett-Packard HPQ gained 2.4% and Microsoft MSFT added 1.9%.  At its annual shareholder meeting, Intel’s CEO Paul Otellini indicated the firm expects to double its earnings growth over the next few years and increased its margin outlook as it plans to expand its chips into new products such as TVs and smartphones.

The mergers and acquisitions front got a fresh boost on reports that Germany’s SAP AG SAP had agreed to acquire software provider Sybase SY for $6 billion.  Shares in California-based Sybase soared 35% to $56.14.  SAP said it will offer $65 per share for each outstanding share of Sybase’s common stock.

Morgan Stanley MS fell 2% on reports federal regulators were looking into its dealings in mortgage securities and whether it misled investors. 

On the New York Stock Exchange advancing shares outpaced declining issues by a six-to-one margin on volume of 1.3 billion shares.  Treasury prices dropped, sending corresponding yields higher.  The yield on the benchmark 10-year note rose to 3.58% from 3.53% late Tuesday.

The technology sector, up 2.4%, led the gainers on the S&P, followed by basic material shares (+2.6%), industrials (+2.2%), oil and gas (+1.4%), financials (+1.3%), consumer services (+1.3%), telecommunications (+1.2%), consumer goods (+1.0%), health care (+0.9%), and utilities (+0.9%).  Gains were broad based with 27 of the DJIA 30 marking gains for the day; on the S&P500 455 closed in the green while 92 of the NASDAQ-100 gained. The market’s measure of volatility, the CBOE Vix, continued lower, off 9.9% to 25.52.

Crude prices eased 1% to $75.65, while gold continued to glitter on its inflation hedge appeal, climbing 1.9% to a fresh record high of $1,243.50. The Energy Department's weekly inventory report showed a greater-than-expected build in crude stockpiles. 

More banks are feeling the heat of regulatory scrutiny over mortgage-bond dealings.  With Goldman Sachs GS and Morgan Stanley MS already in the dock, reports suggest the probe would expand to such big names as JP Morgan JPM, Citigroup C, Deutsche Bank DB, and UBS UBS.  A NY attorney general investigation of firms' providing misleading information to ratings agencies reportedly includes Goldman GS, Morgan Stanley MS, UBS UBS, Citigroup C, Credit Suisse CS, Deutsche Bank DB, Credit Agricole and Merrill/Bank of America BAC.

Today, Ford F and Google GOOG shareholder meetings are scheduled, with earnings releases due from key retailers Kohl's KSS, Nordstrom JWN and Urban Outfitters URBN.  NVIDIA NVDA and Select Medical MS are also scheduled to report their earnings.