Closing Update for Monday, August 3

4:16 PM, Aug 3, 2009 --

• NYSE up 141.4 (+2.2%) to 6,565.65.
• DJIA up 114.9 (1.3%) to 9,287.
• S&P 500 up 15.15 (1.5%) to 1,003.
• Nasdaq up 30.1 (1.5%) to 2,009.

GLOBAL SENTIMENT

• Hang Seng up 1.14%
• Nikkei down 0.04%
• FTSE up 1.61%

DOWNSIDE MOVERS

(-) HURN saw continued selling after Friday's restatement, warning.

(-) SVNT gets FDA complete response letter for Krystexxa.

(-) CNB fails to get investment, posts wider Q2 loss.

(-) GENZ gets downgrade.

UPSIDE MOVERS

(+) MGM reports Q2 loss.

(+) BCS beats with earnings.

(+) HBC also gains after earnings.

(+) UBS gets upgrade.

(+) F made new 52-week highs in continued reaction to extended cash-for-clunkers sales incentive; WSJ story on sales.

(+) AAPL firmer, Google's (GOOG) Eric Schmidt resigns from Apple board.

(+) AEZS with Keryx (KERX) gets FDA agreement on Special Protocol Assessment (SPA) on the design of a Phase 3 trial for PI3K/Akt pathway inhibitor compound perifosine (KRX-0401).

MARKET DIRECTION

Stocks end higher, though off their best levels of the day, having hit new highs in afternoon action before falling back in the final minutes of the session. Still, Monday's 1% to 1.5% advance was enough to land all major averages at their highs for the year. The S&P 500 cleared the much-scrutinized 1,000 barrier.

Commodity-related and financial shares set the tone, helped by a flurry of improved manufacturing data in the U.S. and abroad.

The Institute for Supply Management said its U.S. factory index rose to 48.9% in July compared with a 44.8% June. The consensus view among economists was for a reading 46.2%. Both production and new orders rose above 50%, their highest in two years. Those readings prompted the group to predict that its main manufacturing index could turn positive as soon as next month.

The ISM index has been improving slowly since hitting a low of 32.9% in December. The index was last above 50%, the dividing point between expansion and contraction, in January 2008. Surveys in China and Europe also showed stronger manufacturing activity.

Positive reports from European banks lifted Wall Street's mood early in the day.

Barclays (BCS) said its first-half net profit increased 10% on stronger earnings from its investment banking division. HSBC reported a 57% decline in its first-half profit, but results were better than expected. But both banks are still experiencing a rise in bad loans, as consumers in the U.S. and Britain struggle to repay debt.

Intel (INTC) and Caterpillar (CAT) sweetened Street sentiment with new guidance that suggested business conditions are indeed improving.

Oil futures ended sharply higher. Crude for September delivery rose $2.13, or 3%, to end at $71.58 a barrel. Earlier, the contract hit an intraday high of $72.10 a barrel, marking its highest level since June 11. In after-hours electronic trading, crude is down $0.34 at $71.24.

The CRB Commodity Index up a sharp 2.8% this session and up more than 8.5% during the course of the past three sessions. The latter marks the best three-session percentage gain for the CRB since the beginning of January, according to Briefing.com.

As a results, materials stocks continued to advance and are up more than 7% during the past three sessions, outpacing broad-market gains.

Comments

[jann:]

You have got to understand that Price to Earnings has no value in the modern era. I keep on hearing the disgusting older people talk about price to earnings. Ha! What nonsense in the new era.

Might as well talk about Model T Fords and acceleration.

Aug 03 05:32 PM

[Moon Kil Woong:]

This was all a dollar depreciation fueled global fund rebalancing story again. And the bonus was the whopping increase the US Treasury gets to pay on their US Treasury bonds. I'd like to be happy, but this clearly wasn't a rise based on fundamental strength again, rather it is based upon our glaring weakness.

Aug 03 10:06 PM