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Stocks and Bonds: Wall Street Stocks Higher on Fresh Labor Data

January 13, 2012 by Leave a Comment

A drop in oil prices and strong bond auctions in Europe drove stocks to a slightly higher close Thursday. The Standard Poor’s 500-stock index rose for the fourth straight day.

Materials and industrial companies led the gains. Caterpillar and Alcoa rose the most in the Dow. Stocks drove higher in the last hour and a half of trading after oil prices dropped below $100 a barrel for the first time this year. Oil fell on rumors that Europe would delay an embargo on Iranian oil. Crude oil futures for March delivery settled down $1.78 to $99.31 on the New York Mercantile Exchange.

Also pushing stocks were strong bond auctions in Italy and Spain. European markets ended mostly higher after Italy and Spain held highly successful bond auctions, easing worries about Europe’s debt crisis. Italy’s benchmark stock index rose 2.1 percent.

In Italy’s first bond auction of the new year, the country was able to sell one-year bonds at a rate of just 2.735 percent, less than half the 5.95 percent rate it had to pay last month. That’s a signal that investors are becoming more confident in Italy’s ability to pay its debts.

Spain was able to raise double the amount of money it had sought to raise in its own bond sale as demand for its debt was strong. Both auctions were seen as important tests of investor sentiment.

Investors have been worried that Italy and Spain, the third- and fourth-largest countries in the euro area, might be dragged into the region’s debt crisis. Greece, Ireland and Portugal have been forced to get relief from their lenders after their borrowing costs spiked to levels the countries could no longer afford.

The euro rose nearly a penny against the dollar, to $1.28, as worries eased about Europe’s financial woes. The currency, which is shared by 17 European Union countries, fell to a 16-month low against the dollar the day before. An auction of 30-year United States Treasury bonds drew meager interest from investors as cash flowed back into European debt.

The Dow Jones industrial average gained 21.57 points, or 0.2 percent, to end at 12,471.02. It was down most of the day, losing 64 points in the first hour of trading, following a rise in unemployment claims and a weak report on December retail sales.

The S. P. 500 finished up 3.02 points, or 0.2 percent, at 1,295.50. The Nasdaq composite rose 13.94 points, 0.5 percent, to 2,724.70.

The Treasury’s 10-year note fell 6/32, to 100 21/32. The yield rose to 1.93 percent, from 1.91 percent late Wednesday.

It was the latest day of quiet trading in the stock market. There have been six consecutive days with moves of less than 1 percent in the S. P. 500.

Ralph Fogel, investment strategist and partner at Fogel Neale Partners in New York, said the moderate moves were an encouraging sign after the steep rises and sudden declines that were typical of last summer. “This is a much healthier market than we’ve seen,” he said.

Unemployment benefits spiked last week to the highest level in six weeks, mostly because companies let go of thousands of holiday hires, the government reported. Retail sales barely rose in December and were lower than analysts were expecting.

Despite the mixed news on the economy, investors are starting to focus on the corporate earnings season, which got under way this week after Alcoa, the aluminum maker, predicted stronger demand for its products and surprised the market with higher revenue than analysts expected.

“There’s a fair amount of pessimism out there but I also think that investors are slowly becoming immune to the bad news,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “As long as the stuff you can sink your teeth into, like corporate profit, is improving, I think it bodes well for the markets this year.”

Chevron fell 2.6 percent after the world’s second-largest publicly traded oil company said its income would be “significantly” below its fourth-quarter results in the prior quarter because of narrower margins on refining and selling fuels.

The business software company CA Inc. jumped 4.2 percent after the hedge fund Taconic Capital disclosed in a regulatory filing that it has taken a 5.1 percent stake. It also said it was pressing CA to return more cash to shareholders and increase its profit margins.

Article source: http://feeds.nytimes.com/click.phdo?i=49bb7457dbc8766751aa39dfb678b621

Filed Under: Economy News Tagged With: , ,

Trading Year Starts Off With a Rally

January 4, 2012 by Leave a Comment

Wall Street stocks ushered in the first day of trading in the new year with a strong rally as investors were buoyed by a report that showed manufacturing strength in the American economy.

Historically, equities have often traded higher in the opening days of the new year. But after opening with a strong bounce Tuesday, stocks gave back some of their early gains as investors remained skeptical about the strength of the economy and saw a cloudy outlook for the euro zone.

“People are skittish. They’re saying, ‘Show me, show me, show me. Prove it to me, prove it to me, prove it to me,’ ” said Robert Doll, chief equity strategist for fundamental equities at asset-management firm BlackRock.

The Standard Poor’s 500-stock index gained 1.55 percent, or 19.46 points, to close at 1,277.06, after climbing to 1,284.62 in the morning.

The Nasdaq composite index rose 1.67 percent, or 43.57 points, to 2,648.72, and the Dow Jones industrial average increased 1.47 percent, or 179.82 points, to 12,397.38.

Meanwhile, oil prices shot up on growing concerns that Iran could close the Strait of Hormuz in the Persian Gulf to oil tankers if new sanctions are adopted by Western nations. The tensions in the region caused oil prices to jump $4.13, to $102.96 a barrel on the New York Mercantile Exchange.

In stocks, financial firms led the charge higher. Shares of Bank of America, which was one of the worst-performing stocks last year, had one of the biggest moves, rising 4.32 percent, to $5.80. JPMorgan Chase shares climbed 5.2 percent, to $34.98, and Citigroup’s stock jumped 7.68 percent, to $28.33.

Some analysts attributed the early optimism in the day to a new report on manufacturing. The Institute for Supply Management, a trade group of purchasing managers, said its manufacturing index rose to 53.9 points in December from 52.7 in November. Readings above 50 indicate expansion.

Despite the stronger tenor of the report, other analysts remained cautious about drawing broader conclusions.

“The investor base got badly burned this time last year when many who were pessimistic in late 2010 switched to being optimistic in early 2011,” said Cary Leahey, senior economist at Decision Economics.

Investors raised their forecasts for economic growth and “upped their expectations of corporate earnings — and equity performance peaked in the second quarter and growth turned out to be about half of what people had hoped,” Mr. Leahey said.

Joseph Saluzzi, a co-head of trading at Themis Trading, said it was too early to say investors had a new, buoyant resolve. Fairly low trading volumes early in the day did not indicate to him that a flood of sidelined cash was moving into the markets.

“Nothing is really going to change until you start to see some real hard economic numbers that show growth. We’ve seen these sort of inklings before and they haven’t led to much in the past,” Mr. Saluzzi said.

More economic data will be released later in the week, perhaps providing investors with a bit of additional clarity on the strength of the economy late last year. Major retailers are scheduled to release sales data, which will provide a gauge of consumer spending during the holiday season.

And on Friday, the government reports the closely watched employment figures for December. The early consensus in the market was that the economy generated 150,000 jobs during the month. But even if true, some analysts said the market’s reaction could be muted.

“The market is primed for a good report by recent standards, but it will be a mediocre report by historical standards,” said Mr. Leahey.

Forecasts for much of the euro zone this year appear more bleak.

Chancellor Angela Merkel of Germany warned on New Year’s Eve that “next year will no doubt be more difficult than 2011,” as austerity measures across much of Europe put economic growth at risk.

Mr. Doll of BlackRock said most investors believe Europe is going to have a shallow recession and that, should it occur, would not lead to significant fallout for the United States economy.

“But things will be different if somebody can convince us that Europe is going to fall apart or we see the bankruptcy of a major bank there,” he said. “Then that’s not economic contagion, which we could thwart, but financial contagion, which would be much more difficult to deal with.”

Earlier Tuesday, Asian stocks rose. The Hang Seng Index in Hong Kong, on its first trading session of 2012, jumped 2.4 percent and the Kospi index in South Korea rose 2.69 percent. Markets in Japan and mainland China remained closed for the extended New Year’s holiday.

The Treasury’s 10-year note fell 23/32, to 100 13/32, and its yield rose to 1.96 percent, from 1.88 percent late Friday.

Article source: http://feeds.nytimes.com/click.phdo?i=9d6867a2d23baa42b10f2c07cd88c4f5

Filed Under: Business News Tagged With: , ,

Stocks & Bonds: Shares Slip as Oil Prices Jump on Libya Tensions

April 9, 2011 by Leave a Comment

Crude prices have surged as the fighting in Libya, an OPEC member, has appeared to turn into stalemate, analysts said.

“What you really have is fear and the unknown running ahead of the facts,” said Mark  Routt, a senior staff consultant with KBC Advanced Technologies, a consulting firm.

On Friday, crude oil for May delivery rose $2.49, or 2.3 percent, to $112.79 a barrel on the New York Mercantile Exchange, while Brent crude jumped $3.98, or 3.2 percent, to $126.65.

A weaker dollar also kept prices elevated, and energy shares on Wall Street closed higher. But the biggest driver of oil prices was a growing perception among traders that the conflict in Libya might not end any time soon, KBC said in an energy outlook.

Blake Hutchinson, an oil field services analyst at Howard Weil, said that the markets had “written off” Libyan production. Reports of damage to oil fields have heightened fears that output could be disrupted for longer than initially forecast, possibly for years.

“When you kill an oil field, sometimes you kill it for good,” Mr. Hutchinson said. “You have gone from production offline” to production that might never exist again.

Mr. Routt of KBC said that “until we get a technical assessment of the damage, we are not going to know what the impact is going to be, and until we get that knowledge the markets are running ahead of themselves.”

Since the beginning of the turmoil in Libya, Saudi Arabia, along with its gulf neighbors, the United Arab Emirates and Kuwait, have raised production to offset the loss of Libyan oil exports.

But the increase has done nothing to dampen oil prices, the KBC analysis said, because traders are worried about the political stability of many Middle Eastern states, which are among the largest producers in the Organization of the Petroleum Exporting Countries.

Stock prices closed moderately lower on Friday as investors monitored energy and currency markets.

The Dow Jones industrial average fell 29.44 points, or 0.24 percent, at 12,380.05, while the broader Standard Poor’s 500-stock index lost 5.34 points, or 0.40 percent, to 1,328.17. The Nasdaq composite index declined 15.72 points, or 0.56 percent, to 2,780.42.

The Dow was little changed on the week, while the S. P. and the Nasdaq were slightly lower.

Energy shares bucked the market trend to close higher.

The oil drilling company Nabors Industries rose $1.06, or 3.48 percent, to close at $31.56. A rival, Helmerich Payne, gained $1.44, or 2.13 percent, to $68.94, and Anadarko Petroleum was up $1.37, or 1.64 percent, to $84.71.

Amid a threatened government shutdown in the United States, the dollar weakened. The euro rose to $1.4435 from $1.4297 on Thursday.

Interest rates were higher. The Treasury’s benchmark 10-year note fell 9/32, to 100 12/32, and the yield rose to 3.58 percent from 3.55 percent on Thursday.

Article source: http://www.nytimes.com/2011/04/09/business/09markets.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,