Equity markets had a solid day after the big intra-day reversal yesterday. The S&P 500 closed the day 1.17% higher at 1,324.18 points. The Dow Jones Industrial Average managed to gain 1.31% and the Nasdaq closed 1.19% higher.
Markets in Europe ended with small gains. The EuroStoxx 50 ended the day with a modest gain of 0.27%. The German DAX-30 gained 0.33% while the Spanish IBEX-35 rose 0.09%. Despite modest gains in equity markets the sentiment on bond markets remained grim. Spanish yields hit new records, while Italian yields were on the rise as well. Rating agency Fitch warned that ratings of AAA-countries might be at risk of being downgraded as European leaders fail to bring the crisis under control. Consequently, yields on the German 10-year bund rose 12 basis points to 1.4%. Italian yields rose 12 basis points to 6.30% indicating that it might be the next victim of speculators in the continuation of the crisis.
Wall Street Opening
Equity markets opened with small gains, but lost ground during the opening hour. From that point in time the markets started a broad-based rally after President Evans from the Chicago Federal Reserve Bank said he supported actions to produce faster job growth, which includes maintaining the policy of super-low interest rates, until employment recovers. The major averages ended the trading day on their highs.
Michael Kors (KORS) the designer and marketer of luxury apparel and accessories rose 7.7% after the company reported strong fourth quarter results. The company tripled its net profits to $43.6 million, or $0.22 per share. Revenues grew 58% to $380 million as a result of new store openings and same store sales growth. Strong fourth quarter results and a decent outlook for the first quarter of its fiscal 2013 lured investors into buying shares. Closing at $41 today, shares trade almost 20% from their highs in March as investors worry about the resilience of the luxury market in a possible worldwide economic slowdown.
FirstSolar (FSLR) the hard hit solar company, which lost 95% of its share price since the all time highs set in 2008, finally managed to gain some ground back. Shares ended the day up 21% at $15 per share after the company announced that it will hold off on closing a German solar module plant until the end of the year due to strong demand from the Eurozone. The positive news combined with massive short positions in the stock triggered a traditional short stock squeeze.
Dell (DELL) surprised the markets after the close by initiating a quarterly dividend of $0.08, for an annual dividend yield of 2.7%. Shares rose more than 2.5% in after hours trading. Shareholders urged the company already last year to start paying a dividend as many other technology companies were initiating or raising their dividends. Dell held about $17.2 billion in cash and equivalents by the end of the first quarter. The dividend payout will be around $140 million per quarter.
FactSet Research Systems (FDS) the provider of integrated financial information ended the day 12.3% lower after the company lowered the outlook for its fourth quarter. FactSet expects earnings to come in at $1.17 per share on revenues of $208 million. The outlook fell short of analyst consensus who were looking for profits of $1.21 per share on $210.5 million in revenues.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.