Stock Market News for July 27, 2010 - Market News

The stock market rally continues. This time it was FedEx’s turn to fuel hopes that the economic recovery is gaining strength. Then, strong earnings reports and improved new home sales did their bit to take the Dow into positive territory for the year and the S&P 500 above a key technical level. It was Dow industrials’ third straight-session gain. 

FedEx FDX, seen as an economic bellwether since improved shipping indicates the economy is strengthening, jumped 5.6% after it raised its earnings outlook and reported greater-than-expected shipping volumes. FedEx’s improve outlook sent the DJ Transportation Average up almost 2.6%.

Genzyme GENZ continued its recent surge, fueled by takeover speculations, even as the Wall Street Journal reported Britain’s GlaxoSmithKline PLC GSK had made a “very casual approach" to the company.  Shares in Genzyme jumped 7.7%, adding to their Friday’s 15.4% run.

The 100.81 points advance yesterday put the Dow average firmly into positive territory for the year. The average closed the day at 10525.43, up almost 1%. The Dow is now up 0.9% year to date. Twenty-nine of the thirty components closed higher on the day, with Exxon XOM and Chevron CVX leading the gainers. Home Depot HD, also a Dow component, advanced 2.6%.  The tech-heavy Nasdaq Composite index rose 1.19% to 2296.43, while the S&P 500 added 1.12% to 1115.00.  The S&P is now down a meager 0.1% year-to-date. Trading volume, however, remained thin, with only 1 billion shares exchanging hands on the NYSE where advancing issues beat those that fell in price by a three-to-one margin. 

All ten of the S&P500 industry sectors closed in the green, led by financials (+1.7%), industrials (+1.6%), health care (+1.6%), telecommunications (+1.4%), consumer services (+1.2%), oil and gas (+1.1%), consumer goods (+0.9%), basic materials (+0.8%), utilities (+0.8%), and technology (+0.7%).

The optimism seen on the Street yesterday was also a result of reassuring news coming out of Europe.  Friday's release of the stress tests on 91 European banks showed all but 7 of them will be able to weather a crisis, should there be any. Even the $4.5 billion shortfall was tiny, compared with estimates of a $39 billion to $129 billion.

The Commerce Department noted new home sales increased to a seasonally adjusted annual rate of 330,000 in June, well above expectations of 310,000, and up from May's record low. Homebuilder shares jumped, with such names as Pulte Group PHM up 4.7%, DR Horton DHI up 3.0%, and Hovnanian HOV up 6.5%.

Major names reporting their numbers today include Valero VLO, US Steel X, Lockheed Martin LMT, DuPont DD, Office Depot ODP, and Nabors Industries NBR.