For the week, the blue chip index rallied 5.43%; the S&P 500 Index jumped 5.61% and the NASDAQ surged 6.15%.
At the start of week, stocks gained, with the Dow and the S&P 500 snapping a 3-session losing streak and the Dow closing above 12,000, ahead of the austerity measures vote in Greece and after banking regulators issued capital rules for the biggest financial institutions that were less onerous as expected. Participants shrugged-off the data that showed stagnation in consumer spending.
In Asia, equity markets struggled, ending mixed for the session. Participants continued to worry about the European debt crisis and its impacts on the financial system. Japanese stocks fell ahead of the U.S. consumer spending data, worrying that consumers have reduced their spending as a weak labor and housing market continue to weigh. China moved higher, buoyed by transports as oil prices fell, limiting losses in Hong Kong.
In Europe, equity markets moved higher after a choppy session, helped by signs of progress on how to get private bondholders share the burden of a solution to Greece's debt problem.
Among the S&P 500 sectors, technology, consumer discretionary, and financials were the best performing, while materials dragged.
The financial sector saw strength after global regulators said banks deemed too big to fail must hold as much as 2.5 percentage points in additional capital as part of efforts to prevent another financial crisis, with about 30 big financial institutions likely to be impacted with the new capital fee. Bank of America (NYSE:BAC), the largest U.S. lender, jumped 2.47% to $10.78 after the capital requirements were lower than previously feared and as Dick Bove from Rochdale Securities said in a research note that the stock is massively undervalued. Bank of America posted the second biggest percentage gain in the Dow Jones Industrial Average.
JPMorgan (NYSE:JPM), the second largest U.S. lender, also moved to the upside on the news. Its shares climbed 1.06% to $39.91, posting one of the top percentage gains in the blue chip index.
Meanwhile, Goldman Sachs (NYSE:GS), the investment-banking firm, was falling 0.66% to $130.05 after Bank of America Merrill slashed its price target to $153 from $174 after revising its estimates.
Technology outperformed thanks to big cap tech. Microsoft (NASDAQ:MSFT), the largest software publisher, rallied more than 3.7% to $25.20, posting the biggest percentage gain in the blue chip index, and breaking above its 50day exponential moving average at $24.80. The stock rose ahead of an anticipated release of a version of the software giant's Office that is accessible via the Internet.
Apple (NASDAQ:AAPL), the maker of iPads and iPhones, gained 1.74% to$332.04 after Morgan Stanley said that as supply constraints ease, the company should be able to aggressively ramp up production of both iPhones and iPads in the second half of the year. Apple closed its third fiscal quarter last Saturday and earnings buzz will start building up in anticipation to the release of its results in July.
Cisco (NASDAQ:CSCO), the world’s largest networking equipment maker, gained 0.8% to $15.05 despite it was downgraded to Neutral from Outperform by Cowen. Cisco is so far the worst performer on the Dow this year.
Also during the session, the Supreme Court ruled that the government couldn’t ban the sale of violet video game to minors, as the action could violate free-speech rights. Take-Two Interactive (NASDAQ:TTWO), the publisher and developer of video games like Grand Theft Auto, jumped 2.3% to $15.14 on the news.
Consumer discretionary stocks were seeing strength despite the stagnation on consumer spending on the back of lower crude oil prices, which should be bullish for the consumer going forward. In the sector, Walt Disney (NYSE:DIS), the world’s largest Media Company, jumped 1.3% to $38.07 despite Nomura trimming its price target on the stock to $45 from $47, as its Pixar unit sequel Cars 2 sped to a $68 million opening weekend, which is ahead of its original estimates of $60 million. Pixar’s Cars 2 adds new characters to the blockbuster franchise, which has sold an estimated $10 billion worth of merchandise since the original Cars debuted in 2006.
Amazon.com (NASDAQ:AMZN), the largest online retailer, surged 4.52% to $201.25, after Morgan Stanley raised its price target on the retailer to $245 from $225 per share and adding the stock to its Best Ideas List. The firm believes that fourth quarter revenue will beat Wall Street expectations and there is a good likelihood that margins could expand. Amazon was posting one of the biggest gains in the NASDAQ-100 index.
Also in the space, Target (NYSE:TGT), the Minnesota based general merchandise discount store chain, climbed 0.28% to $46.46, closing above calculated support at $46.15, after it was downgraded to a Neutral from Buy at Janney Capital Markets.
On Tuesday, the market started in positive territory as the euro recovered to the flat line as reports suggesting Germany agreed with the French proposal for private sector involvement in the solution for the Greece debt crisis offset news reports of protests turning violent in Greece ahead of the crucial vote. Market sentiment also received a jolt after the U.S. Case-Shiller home price index showed a 4.0% year over year decline in home prices, but it registered the first monthly uptick in prices in eight months.
In Europe, stocks closed higher as optimism increased that Greece's parliament will vote to approve the tough austerity measures needed in exchange for financial aid from international lenders, which helped offset concern over economic growth and its impact at the bottom line of companies, like Siemens, which warned of a slowdown in growth in the back half of the year.
All of the S&P 500 key sectors finished in positive territory, with energy, consumer discretionary, and materials posting the biggest gains. Consumer staples, financials, and utilities underperformed. Energy stocks were the biggest driver in the session, with their 2.9% gain. The advance came on the back of a rally in crude oil prices, which had their largest single day move in over a month, with crude oil jumping 2.5% to close at $92.89 per barrel. Also helping the sector, natural gas rallied 2.1% to end at $4.35 per MMBtu. Weakness in the Dollar along with speculation fuel demand will increase ahead of the July 4th Holiday and forecast for hot weather helped lift prices in the complex.
Exxon Mobil (NYSE:XOM), the U.S. largest energy producer, jumped more than 2% to $79.63, posted one of the biggest percentage gains in the Dow Jones Industrial Average on the back of the rally in both oil and natural gas. Exxon has calculated support at $76.72 and resistance at $88.13.
Driller and oil services companies saw big moves, with Halliburton (NYSE:HAL), the provider of oilfield technologies and services to upstream oil and gas customers, was also one of the biggest performers in the sector, as shares rallied 5.32% to $48.69, closing above its calculated resistance at $47.76 after trading as high as $49.07.
Airline stocks suffered on speculation the move in crude will translate into higher jet fuel prices, with Delta Airlines (NYSE:DAL), the world’s second largest airline, among the biggest decliners in the industry. Delta fell 2.8% to $9.39 despite being upgraded to a Hold at Capstone. The higher oil prices and warnings from United Continental and AMR from last week continued to weigh in the space. Delta closed 1.49% above its calculated support at $9.25.
In the consumer discretionary sector, stocks were showing strong as consumer confidence dropped to its lowest level since November 2010, but its expected to climb in the future as lower gasoline prices and signs of a stabilizing housing market will likely provide support for the U.S. consumer. McDonald’s (NYSE:MCD), the world’s largest restaurant chain, jumped 2.47% to $84.35, helping the sector and posting a new 52-week high at $84.41. Argus raised its price target to $92 from $88 as the company continues to benefit from sales momentum in Asia-Pacific, Middle East and Africa, as well as from increased sales of breakfast items, the McCafe, and the Angus Wrap in the U.S.
Nike (NYSE:NKE), the athletic footwear and apparel giant, surged 10.14% to $89.90, closing above calculated resistance at $84.83 and at the top of the S&P 500 following an upside earnings surprise and as fiscal fourth quarter future orders jumped 15% year over year.
Wynn Resorts (NASDAQ:WYNN), the luxury casino operator, was a top performer in the sector, as shares rallied 3.82% to $139.43, closing above its calculated resistance at $136.81 and posting one of the biggest gains in the NASDAQ 100 index. Participants bid the sector on hopes of a comeback from the consumer and ahead of the 4th of July Holiday.
Industrials also received a bid, outperforming the broad market, as economic sensitive stocks were sought after. Caterpillar (NYSE:CAT), the world’s largest earthmoving equipment maker, rallied 3.08% to $103.84, posting the biggest percentage gain in the index.
In Tech land, Apple (NASDAQ:AAPL) climbed 0.97% to $335.26 after Needham raised its estimates above consensus in order to reflect higher than forecast iPad and Mac shipments. Apple’s fiscal quarter ended last quarter, increasing the buzz level surrounding Apple’s earnings report scheduled for July. On average analysts expect a profit of $5.63 on revenue of $24.52 billion. Last quarter, the company posted a 19.2% upside earnings surprise, as it earned $6.40 per share.
First Solar (NASDAQ:FSLR), the largest maker of thin film solar modules in the world, surged 6.80%, posting one of the biggest percentage gain in the NASDAQ-100 and closing just below its calculated resistance at $126. A bullish research note from Jefferies helped the stock during the session. The firm said that the company has taken on a robust project opportunity that will insulate it from further price declines in the spae.
Sina Corp. (NASDAQ:SINA), the Chinese online media company and owner of the Weibo microblogging service commonly referred to as the Twitter of China, rallied 6.05% to $100.54, extending the prior session rally, sparked by an upgrade to a Neutral rating at Goldman Sachs. The company entered a partnership with a Japanese company to market its Weibo service in Japan. Sina also started testing an online photo album service with editing functions. Last Week Jefferies reiterated its Buy rating, but trimmed its target price to $121.
Mid week, stocks advanced for the third straight session, led by financials after Greece passed its austerity measure plan, the Fed unveiled its debit card sweep fees, and after an encouraging pending home sales report.
In Asia, stocks ended mostly higher on the back of the strong performance in the U.S. market, hopes that the Greek parliament will pass the austerity measure plan to help the euro zone avoid default, and better than expected industrial output in Japan, jumping 5.7% in May, the biggest expansion monthly in 60 years, which helped the Nikkei to close at a 7-week high.
Among the S&P 500 sectors, financials, energy, and materials led the advance. Financials were the best sector as the Greek vote eased concern of systemic risk entering in the banking system, as the Fed proposed less onerous debit cards interchange fees than previously fear, and with Bank of America (NYSE:BAC) jumping 2.96% to $11.14 after trading as high as $11.25 and trading above calculated resistance at $10.94. The Charlotte, NC based bank reached a final settlement with mortgage back securities investors in which it will pay $8.5 billon, putting to rest charges that the bank failed to service mortgage loans properly leading to losses for investors who bought at least $47 billion worth of mortgage backed securities. Earlier in the year, Bank of America had estimated losses from mortgage put-backs at $7 to $10 billion. Shares were losing some steam towards the end of the session, but received a jolt after the Fed announced that debit card swipe fees would be capped at 22 cents, higher than initially proposed.
Rival Citigroup (NYSE:C), the third largest lender in the U.S., also benefited in the sector. Shares jumped 3.36% to $41.50, closing above calculated resistance at $41.17, after Bank of America Merrill upgraded the stock to a Buy.
Also in the sector, NASDAQ OMX Group (NASDAQ:NDAQ), the global operator of stock markets and owner of the NASDAQ market site, rallied 4.71% to $25.14 on news that the Toronto and London Stock Exchanges abandoned plans for a $3.7 billion merger, leaving both in play in a world already facing a wave of exchange consolidation, which could lead to a potential tie-up with the NASDAQ.
Both operators of global payment networks, Visa (NYSE:V) and MasterCard (NYSE:MA) surged on news that less onerous cap for debit card swipe fees that its was previously expected. In addition to the 21 cents fee, banks would be allowed to charge 5 basis points per transaction to cover fraud losses. Visa soared to the top of the S&P 500, rallying 15% to $86.57 and posting a new 52-week high at $87.32; while MasterCard surged more than 11% to $309.70, posting a new 52-week high.
The euro gained against the Dollar with as the Greek austerity plan moved forward, this bode well for commodities, like gold, silver and crude oil. Gold rallied for 0.7% to close at $1510.60 per ounce, while July silver surged 3.5% to end at $34.80 per ounce.
iShares Silver Trust ETF (NYSE:SLV), the fund that corresponds to the price of silver owned by the Trust less expenses and liabilities, jumped 3.33% to $34.01, as silver prices traded near $35 an ounce, with the metal attracting a bid on Dollar weakness following the Greek vote on its austerity plan. The trust extended its year to date gain 12.69%, with shares trimming its June decline to 9.55%. The Silver Trust has calculated support at $32.53 and resistance at $35.85.
The material sector also received a major lift from steelmakers and from better than expected earnings from Monsanto.
AK Steel (NYSE:AKS), the Ohio based steel company, and U.S. Steel (NYSE:X), the integrated steel producer with operations in North America and Europe, were upgraded to a Buy from Hold at Deutsche Bank. Both stocks rallied more than 5%, with U.S. Steel closing above calculated resistance at $43.47 and AK Steel closing above calculated resistance at $14.87.
Monsanto (NYSE:MON), the agricultural business company, surged 5.02% to $70.26 after an upside earnings surprise, thanks to robust sales of its seeds and genetic traits business. Monsanto earned for the quarter $1.26 per share, $0.15 better than consensus, on revenues that jumped 21% to $3.59 billion. The company also guided fiscal 2011 earnings per share above consensus. Argus reiterated its Buy rating on the stock, following the strong quarterly results.
Crude oil benefited from the weakness in the Dollar, coupled with a sense that the global economy is in better shape than estimated and after a bullish inventory report for last week in the U.S. Oil rallied 2% to $94.77, while Brent pushed also higher expanding the gap from WTI, to levels before the IEA announcement of the release of the 60 million reserves.
Chevron (NYSE:CVX), the second largest U.S. energy producer, climbed 0.93% to $101.28, as crude oil rallied above $94 per barrel, closing practically at the level before the IEA announcement of release of reserves last week. Chevron has calculated support at $9 and resistance at $105.21.
Technology slightly underperformed the broad market index, receiving a jolt toward the end of the session from MasterCard and Visa. But Apple (NASDAQ:AAPL) dragged, with shares falling 0.36% to $334.04 as the iPhone speculation continued. RBC Capital noted in a research note that Apple is expected to cut the iPhone 3GS price to $0 on a 2-year contract in conjunction with the iPhone 5 launch, which the firm continues to expect for September. According to the firm, this approach is intended to target mid-market smartphone buyers and counter Android's mid-market expansion.
On Thursday, the market started on a positive note amid overseas gains o optimism surrounding the Greece debt situation and the state of the global economy as weekly jobless claims came more or less in line with expectations, with participants dismissing the continued weakness in the labor market.
In Asia, the Nikkei under performed, ending slightly higher after pulling back at 7-week highs, as Manufacturing PMI slowed down slightly from the prior month. Shanghai rebounded from the prior session loss on news report that suggested first half GDP growth would reach 9.5% and CPI of 5.3%.
In Europe, equity markets moved to their highest level in almost 4-weeks after the Greek parliament voted on a final passage of the austerity measures plan that will help the debt-stricken country secure additional emergency financial aid to meet their short-term debt obligations.
The market also received a boost from a surprise in the Chicago Fed manufacturing reading. The Purchase Manager's Index registered a 61.1 reading, up from May's 56.6 and ahead of expectations for a 53.
All of the S&P 500 sectors finished in positive territory, with industrials, energy, and technology posting the biggest gains, while utilities, healthcare, and financials under performed. The industrial sector climbed 1.58% as a group, with Caterpillar (NYSE:CAT) rallying 3% to $106.46, posting the second biggest percentage gain in the Dow Jones Industrial Average. Caterpillar moved higher on Dollar weakness and after surprise PMI reading. During the first quarter, Caterpillar was one of the top Dow components; in this quarter the stock didn’t fare as well, losing 4.36%.
While the energy sector climbed close to 1.5%, as natural gas finished higher by 1.4% following bullish inventory data and after crude oil edged higher to close at $95.42 per barrel. Big oil was active on the back of the higher prices in the energy complex. BP (NYSE:BP), the London, UK based energy giant, jumped 1.9% to $44.29, closing above calculated resistance at $43.50 and turning positive for the year, climbing 0.27%.
Chevron (NYSE:CVX) gained 1.54% to $102.84, as it also outperformed. The stock ha calculated support at $97 and resistance at $105.21. Chevron closed the quarter with a 4.33% loss.
Tesoro (NYSE:TSO), the crude oil refiner based in San Antonio, TX, was a top performer in the sector, as shares surged 3.57% to $22.91 buoyed by higher gasoline prices. Tesoro was initiated earlier in the week with a Neutral and a target price of $23 at UBS.
Financials underperformed on the session, climbing 0.39% as a group, with big banks struggling in the day. Bank of America (NYSE:BAC) gave back a portion of its prior session rally, with shares falling 1.62% to $10.96. The stock was able to held its calculated resistance level at $10.91. The stock finished the first half of the year with 17.8% loss.
Morgan Stanley (NYSE:MS), the operator of a global securities business, fell 1.6% to $23.01 after Mitsubishi UFJ completed its conversion of Morgan Stanley shares, causing the bank to take a $1.7 billion charge for the second quarter. For the quarter, Morgan Stanley tumbled 15.78%.
The tech sector was active, with participants bidding the sector higher. First Solar (NASDAQ:FSLR) jumped 2.2% to $132.27 after the Energy Department offered $4.5 billion in loan guarantees to back three projects by the Tempe, Ariz.-based company. First Solar was also initiated with a Positive at a target price of $160 at Avian.
Apple (NASDAQ:AAPL) was able to climb 0.49% to $335.67, despite reports that Samsung Electronics filed a complaint with the U.S. International Trade Commission (ITC) over Apple’s violation of five patents held by Samsung related to wireless communications standards and mobile device user interface. On its compliant, Samsung is seeking for the commission to ban iPhone imports into the U.S., in which is the latest fight in a long series of suits between both companies. Apple was able to trim its quarterly loss to 3.68%
In the materials sector, precious metals had somewhat muted session following the austerity vote in Greece. Gold fell 0.5% to $1502.90, while silver closed nearly unchanged at $34.76.
Monsanto (NYSE:MON) was a top performer in the materials sector, with shares extending the prior session rally by 3.25% to $72.54. Ticonderoga raised its target price to $82 from $80, as the firm noted the seed industry will have pricing flexibility, mostly a richer product mix of brand new products this autumn for the upcoming 2012- 2013 crop year given the tailwind of sharply higher crop prices.
At the end of the week, stocks closed sharply higher ahead of the long holiday weekend to finish their best week in almost 2-years after Wall Street cheered a better than expected manufacturing report, which helped eased concern about the state of the U.S. economic recovery.
In Asia, stocks closed with modest gains. Shanghai closed in positive territory after China’s manufacturing PMI data hit a 28-month low, which tempered gains, while the Nikkei added 0.5%, despite the Tankan Survey data that was weaker than expected.
In Europe, shares closed higher for a fifth day, led by banks, which continued their rally after the Greek parliament passed the country’s austerity measures plan that eased concern that systemic risk will enter the banking system from a potential Greek default.
Stocks moved from near the neutral line to significant gains after the Institute for Supply Management said its index of national factory activity rose to 55.3 from 53.5 the month before. The reading was better than expected.
Participants shrugged off news that the U.S. consumer sentiment worsened in June as consumers worried amid economic uncertainty despite falling gasoline prices. The final reading for the consumer sentiment index came in at 71.5, down from 74.3 the month before and slightly below the preliminary June figure of 71.8.
All of the S&P 500 key sectors finished with gains, with consumer discretionary, financials and industrials leading the advance, while consumer staples, materials, energy, and healthcare underperforming the broad market index.
The consumer discretionary sector was the top performer, jumping more than 2%, with Apollo Group (NASDAQ:APOL), the provider of educational programs, was surging more than 6% to $46.46 following an upside earnings surprise and after the company issued inline guidance. FBR Capital raised its target price to $47 from $45 following the Apollo’s earnings beating consensus by $0.12 per share.
Wynn Resorts (NASDAQ:WYNN) rallied more than 4% to $149.57, after the Macau Gaming Inspection and Coordination Bureau reported June gross revenues that jumped 52% year over year to 20.79 billion patacas or about $2.59 billion, following a prior surge of 65% in May. Macau’s gaming revenue surged 44% in the second quarter and is now posting an increase of 45% year to date, according to the Bureau. Wynn generated about 69% of its first quarter revenue and approximately 67% of its first quarter adjusted EBITDA from Macau. The casino space was also benefiting from increased economic optimism.
Las Vegas Sands (NYSE:LVS), the owner and operator of casino resorts and convention centers in the U.S., Macau, and Singapore, jumped 3.98% to $43.89, closing above its 200day moving average at $43.48, also benefiting from the Macau gaming numbers. Las Vegas Sands generated about 55% of its first quarter revenue and approximately 51% of its first quarter adjusted EBITDA from Macau.
Financials gained 1.8%, as the sector received a lift from the performance in shares of NASDAQ OMX (NASDAQ:NDAQ), JPMorgan (NYSE:JPM) and Citigroup (NYSE:C). NASDAQ OMX surged 3.24% to $26.12, trading above calculated resistance at $25.70, on continued M&A speculation in the space.
JPMorgan (NYSE:JPM) jumped 2.19% to $41.58, posting the second biggest percentage gain in the Dow Jones Industrial Average, while trimming its year to date decline to 1.98%.
Citigroup (NYSE:C) rallied 2.98% to $42.88, after trading as high as $43.06, on the back of strength in the financial sector. Citi was seeing a strong bid at the start of the second half of the year, trimming its year to date decline to 9.34%.
The industrial sector received the boost from the better than expected manufacturing report. Caterpillar (NYSE:CAT) jumped more than 2% to $108.62, posting one of the biggest percentage gains in the blue chip index.
In tech land, Apple (NASDAQ:AAPL) rallied 2.26% to $343.26, as the company was part of a consortium, which includes LM Ericsson, EMC Corp, Sony, Research In Motion, and Microsoft, and will be acquiring Nortel Networks’ patent portfolio for $4.5 billion. The extensive patent portfolio touches nearly every aspect of telecommunications and additional markets as well, including Internet search and social networking. Apple fared well after the International Trade Commission delayed its final ruling on Eastman Kodak’s complaint that Apple’ iPhone and Research In Motion violated its patent related to the method used to preview images, while upholding portions of a ruling unfavorable to the maker of digital cameras, film and printers.
On the flip side, shares of Eastman Kodak (NYSE:EK) plunged more than 14% to $3.07 on the unfavorable news for the company, regarding its patent complaint against Apple and RIM, which could have represented about $1 billion in licensee fees.
In the material sector, Alcoa (NYSE:AA), the aluminum producer, was a top performer in the sector, with shares jumping 2.84% to $16.31, posting the biggest percentage gain in the blue chip index, on the back of the improved numbers in manufacturing and as automakers reported their June sales.
But precious metals performed poorly, with the safe haven trade unwinding following eased concerns over a Greek default and economic uncertainty. Gold prices dropped 1.3% to $1483.80 per ounce while silver sank 3.2% to $33.72 per ounce.
iShares Silver Trust ETF (NYSE:SLV), the fund that corresponds to the price of silver owned by the Trust less expenses and liabilities, fell 2.48% to $33, as silver prices closed below the $34 an ounce level. The trust closed the first half of the year with a gain 12.13%, with shares falling 10% in June, which followed a 19.8% plunge in May. The Silver Trust has calculated support at $32.53 and resistance at $35.85.
Energy finished in positive territory despite lower prices in the energy complex. Crude oil prices pared losses seen in early pit trade to log a 0.7% loss at $94.79 per barrel, but the energy component finished the week 4% higher. Natural gas prices fell 1.4% to $4.34 per MMBtu. The commodity was under pressure all session, but it was able to advance almost 3% for the week.
Marathon Oil (NYSE:MRO), the integrated oil company based in Houston, TX, surged 3.03% to $32.95 after the company has just completed its spinoff of its downstream business, creating a new company called Marathon Petroleum (NYSE:MPC). Marathon Oil will maintain its ticker and will now be a company solely focusing in exploration and production of crude oil and natural gas. Oppenheimer set its target price on the new Marathon Oil (NYSE:MRO) at $40, noting that the stock is now one of the most undervalued large E&P companies with its shares trading at lower multiples of earnings, cash flow, and EBITDA than most of its peers.
Marathon Petroleum (NYSE:MPC), the second largest independent refining company in the U.S., gained 1.93% to $42.20 on its debut in the NYSE. Marathon Petroleum was initiated with an Outperform and a target price of $50 at Oppenheimer and with a Buy at Deutsche Bank. The stock also received an Outperform rating at Oppenheimer. Marathon Petroleum replaced Radio Shack on the S&P 500 Index.
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