Equities Update: Stocks Strike Fresh Highs

4:19 PM, Nov 9, 2009 --

• NYSE up 177 (2.5%) to 7,135.33.
• DJIA up 203.5 (2%) to 10,227.
• S&P 500 up 23.77 (2.2%) to 1,093.
• Nasdaq up 41.6 (1.9%) to 2,154.

GLOBAL SENTIMENT

• Hang Seng up 1.73%
• Nikkei up 0.25%
• FTSE up 2.09%

UPSIDE MOVERS

(+) GE report says co. agrees to $30 bln value on Comcast JV.

(+) EWBC buying banking operations of United Commercial Bank.

(+) ARIA upgraded to Overweight at JP Morgan.

(+) CGEN reports discovery of genetic biomarker related to diabetes.

(+) NOC sells TASC for $1.65 bln.

(+) CMED gets SFDA approval for leukemia fusion gene detection FISH probe.

(+) CBY rejects new Kraft offer.

(+) ANF gets upgrade.

(+) ADBE gets upgrade.

(+) RSH gets upgrade, turns higher

(+) DISH results fall vs year-ago, but rise in subscribers draws investors.

DOWNSIDE MOVERS

(-) FUQI results top year-ago period.

(-) TEC files for Ch. 11.

(-) RPRX reports wider loss, gets going concern notice.

MARKET DIRECTION

Global recovery optimism sends stocks broadly higher, finishing in the upper end of the day's trading range. The blue-chip Dow Jones Industrial Average shoots up over 200 points to end at its highest mark since October 2008. The dollar index hit a 15-month low, sending gold to fresh highs and crude up nearly 3%. Treasurys rose on solid demand at a sale of 3-year notes.

Stocks charged higher from the get-go Monday after finance ministers of the Group of 20 nations injected some optimism into markets with their weekend assurance for ongoing stimulation.

In company news:

Kraft Foods Inc (KFT) formalized a proposed takeover of Britain's Cadbury Plc (CBRY.L), but failed to improve the terms of its initial approach. Cadbury immediately rejected the renewed offer.

General Electric Co (GE) gained after a source said the company and Comcast Corp (CMCSA) agreed that a joint venture between NBC Universal and Comcast is worth about $30 billion, moving the deal forward.

The House of Representatives approved a health care reform bill, Saturday, that will include a government-run health insurance option to compete with private insurers, and the news is having some impact on health care stocks.

Google (GOOG) was up after it said today it will buy AdMob, a mobile display ad technology provider, for $750 million in stock. The deal is expected to bolster Google's existing expertise and technology in mobile advertising, the Internet company said in a statement.

Comments

[MikeD71:]

"Stocks charged higher from the get-go Monday after finance ministers of the Group of 20 nations injected some optimism into markets with their weekend assurance for ongoing stimulation."

So again we kick the reality can down the road a bit further. Oh the tangled webs we weave...

Nov 09 04:51 PM

[LeadingEdge:]

The sad reality is that most investors "fear the future" and will sit on the sidelines until it "feels right" .... by then, it will be too late .... as usual.

Nov 09 04:57 PM

[Thomas J. G...:]

I'm a little nervous that the u.s. stock market is going up because the dollar is going down. I understand all the arguments that u.s. compaines may benefit from a lower dollar and they are real terms producers. But it doesn't seem good for the u.s. that their currency is going down. Especially since the reason it's going down is the gov't is spending a bunch of money it doesn't have.

Nov 09 05:08 PM

[TraderShan:]

The primary reason for the inverse relationship between the dollar and equities is the dollar is being used as the funding currency for a carry trade.

Nov 09 05:46 PM

[Thomas J. G...:]

TraderShan, but money is being carried out of the u.s.. we have the low interest rates and declining currency attractive to carry traders. Is some of that money staying in the u.s. to buy stocks?

Nov 09 06:03 PM

[Shabba:]

People are converting their yen/euro/pound etc into dollars. When you do this you can borrow dollars at a very low interest rate AND you pick up an extra bonus in the appreciation of your currency vs. the dollar. The money is going into stocks apparently.

The decrease in the dollar is good for exports from the US, but it is bad for imports to the US (it increases the price). You could also argue that the importers won't be able to raise their price because demand is so weak, and that might be true.

At any rate it is a very bad sign that stock are rising along with a falling dollar. It probably indicates mass buying of equities by foreigners. In other words, Bernanke is effectively selling off the country by keeping rates low.

Nov 09 07:02 PM

[E Nuff Sed:]

Why is this bad? There is money coming into the US, which raises the prices of assets. This is good for Americans who own stock. I wish they'd open up the housing market to foregin investment - the real estate bust will turn into a boom pretty darn quick.

On Nov 09 07:02 PM Shabba wrote:

> At any rate it is a very bad sign that stock are rising along with
> a falling dollar. It probably indicates mass buying of equities
> by foreigners. In other words, Bernanke is effectively selling off
> the country by keeping rates low.

Nov 09 08:14 PM

[Thomas J. G...:]

E Nuf Said, What else are you willing to sell to the furiners? We used to be a nation that owned our base and invested in other countries.

Nov 09 09:41 PM

[Options Tra...:]

Anything done to help stem the recession and promote growth is good at this point. Anyways, the Dow did breakout as expected and if the persistent bears are still skeptical (as they did since Jan 2009), imagine the amount of money that has cost you so far. Sometimes the fear of losing overcomes the drive to win.

Nov 09 09:41 PM

[ebworthen:]

Bad, bad, bad.

Rising gold and stock markets with a falling dollar on FED liquidity, bailout money, and stimulus = reflation of the bubble.

This is not 1982, Reagan is not President, our productive capacity is half what it was (real goods, not paper and "services"), our unfunded social programs twice what they were, debt twice what it was, deleveraging twice what it was.

Combine 1930 and 1974 and you have the stew we are cooking in. The temperature is slowly coming to a boil so all the frogs won't jump out until it is too late.

Nov 09 09:51 PM

[ebworthen:]

Actually, made lots with Gold, and I won't lose it when this all collapses due to hopium, government spending of TRILLIONS of paper money, unfunded SS and Medicare, continuing collapse of commercial real estate and regular housing, and the FED purchasing the stock market with free money to banks and insane liquidity. Did I mention 17% true unemployment? Where's that credit card?


On Nov 09 09:41 PM Options Trading wrote:

> Anything done to help stem the recession and promote growth is good
> at this point. Anyways, the Dow did breakout as expected and if the
> persistent bears are still skeptical (as they did since Jan 2009),
> imagine the amount of money that has cost you so far. Sometimes the
> fear of losing overcomes the drive to win.

Nov 09 09:55 PM

[Shabba:]

It's bad because everything you own is denominated in dollars and those dollars are becoming more and more worthless. The fact that foreigners own more and more US stocks can be that positive either.

In essence the federal government if forcing you to accept and asset devaluation and artificially low rates on your savings to bail out the idiots who created this mess. Most people would be &#$! furious if they understood this.

Nov 10 06:45 PM