Stocks Rally On Central Bank Talk

Includes: DIA, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Index up 155.53 (+1.24%) to 12,651.91
  • S&P 500 up 14.22 (+10.8%) to 1,329.10
  • Nasdaq Composite Index up 17.72 (+0.63%) to 2,836.33


  • Hang Seng Index down 1.15%
  • Shanghai China Composite Index down 0.99%
  • FTSE 100 down 0.23%

Markets rallied today, picking up steam near the close following reports central banks from the world's major economies stand ready to take steps to prop up financial and credit markets if the Greek elections Sunday cause upheaval.

"The central banks are preparing for coordinated action to provide liquidity," a senior G20 aide familiar with discussions among international financial diplomats told Reuters today. His statement was confirmed by several other G20 officials. But the same senior U.S. official cautioned that the Greek election will not provide "the definitive signal on what happens next" in the eurozone debt crisis.

Bloomberg was reporting that the Bank of England would pump at least 5 billion pounds of new liquidity into its markets each month.

Earlier today, stocks were moderately higher despite mixed economic reports, including a small rise in new jobless claims last week and the nation's account deficit rising to $137.3 billion - $5 billion higher than projections.

But adding to the positive mood was the Consumer Price Index falling during May to 0.3%, down from no change the month before and also beating consensus estimates for a 0.2% decline. Excluding food and energy, the CPI gained 0.2%, in-line with predictions and unchanged from the prior month.

All 10 industry sectors in the S&P 500 finished with strong gains, led by energy stocks, which rallied on speculation the central bank stimulus would boost demand.

In company news, shares of Nokia Corp. (NYSE:NOK) slid over 15% today after the Finnish smart phone maker announced plans to cut 10,000 jobs and shake up its management. The move was the largest one-day drop since June 2001, according to FactSet. NOK also warned that it would see a larger-than-forecast fiscal Q3 loss at its mobile devices unit.

Commodities ended mixed. Crude oil for July delivery closed $1.29 higher at $83.85 a barrel while July natural gas rose 32 cents to $2.50 per 1 million BTU after the Energy Information Administration said that natural gas inventories rose 67 billion cubic feet, trailing forecasts for a 80 billion cubic foot build. August gold settled unchanged at $1619.90, July silver fell $0.46 to $28.47, while July copper rose 1 cent to $3.35.


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