Stock Market News for May 18, 2010 - Market News

U.S. stocks closed with marginal gains on Monday even as Europe’s debt malaise showed no signs of easing.  The euro, meanwhile, rebounded from a four-year low against the U.S. dollar as traders picked up the battered currency. 

Investors were also concerned about how Europe will manage the fiscal crisis that has threatened to derail the global economic recovery.  They are worried that deeper spending cuts being implemented by some countries in the eurozone would compound the problems.  The $1 trillion aid package for most heavily indebted economies in the eurozone has done little to allay those fears even as markets across the globe reel under a wave of uncertainty. 

Asian markets rallied today, with China's Shanghai Composite index closing the day with a 1.4% gain.  The Hang Seng climbed 1.2% and the Nikkei rose 0.1%.  In morning trade, crude prices were gaining momentum, reclaiming the $70 per barrel level, even as the API inventory report due later today is expected to show a continued build in US crude stockpiles.

On Monday, after plunging almost 184 points, the Dow industrials recovered and closed up 6 points or about 0.1%.  The broader S&P 500 index edged up 1 point, or 0.1%, and the Nasdaq composite index added 7 points or about 0.3%.  On the New York Stock Exchange three stocks advanced in price for every two that fell on volume of about 1.4 billion shares.

Global growth concerns sent shares in industrials and commodity-related companies lower, with Alcoa AA off 2.1% and Caterpillar CAT down 1.7%.  Defensive plays such as AT&T T and Procter & Gamble PG advanced 1.5% and 1.3%, respectively, while consumer-related shares such as Kraft KFT, Wal-Mart WMT and Home Depot HD rose 1.7%, 1.2% and 1.1%, respectively.  Crude prices fell $1.45 to $70.16, partly on demand concerns.  Shares in Exxon Mobil XOM retreated 0.5%.

The euro could see some stabilization after an auction of Spanish 12- and 18- month bills later today.  Reports that Greece received $17.9 billion in EU aid this morning, in time to use some of the funds to repay a $10.5 billion bond issue, maturing tomorrow, could also have a post bearing on the shared currency.

Today's earnings calendar contains a number of key results from retailers, including Abercrombie and Fitch ANF, Dick's Sporting Goods DKS, Home Depot HD, Saks SKS, TJX TJX, and Wal-Mart WMT.  On the technology front, firms reporting their earnings are: Analog Devices ADI and DJIA component, Hewlett-Packard HPQ.