Stock Averages Up 1% or More, While Crude Hits 2-Year High

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Includes: DIA, QQQ, SPY
by: Midnight Trader

4:12 PM, Dec 2, 2010 --

  • NYSE up 108.19 (+1.4%) to 7,712.25
  • DJIA up 106.7 (+1%) to 11,362
  • S&P 500 up 15.5 (+1.3%) to 1,222
  • Nasdaq up 29.92 (+1.2%) to 2,579


GLOBAL SENTIMENT

  • Hang Seng up 0.86%
  • Nikkei up 1.81%
  • FTSE up 2.22%


UPSIDE MOVERS

(+) RNN initiated with Buy coverage at Brean Murray.

(+) ANF reports jump in same-store sales.

(+) WTSLA gains after November sales.

DOWNSIDE MOVERS


(-) M gains on November sales, earnings view.

(-) GM making pension payment.

(-) INSM in combination with Transave.

(-) SQNM selling stock.

(-) AEO says November same-store sales flat.

(-) KR declines after results.

MARKET DIRECTION

Stock averages posted another day of strong gains. In fact, the Dow's 100-plus-point gain is its first back-to-back triple-digit advance since late July. Other major averages also closed up over 1%.

Stocks gained as investors mostly shrugged off pre-market news that unemployment benefits claims rose and focused instead on a jump in pending-home sales, the Federal Reserve's move to buy $8.31 billion in Treasury debt as part of its quantitative easing initiative to aid the struggling recovery and several upbeat November same-store sales reports from retailers. Investors took comfort in the European Central Bank's decision to leave a liquidity safety-net in place.

Crude futures scratched back from a weak start, ending up 1.4%. Crude for January delivery added $1.25 to $88 a barrel. Gasoline also extended its rally, settling 2.4% higher at $2.36 a gallon, its best level since early May.

The ECB as expected left its benchmark interest rate unchanged at a record low of 1%.

President Jean-Claude Trichet, speaking at the ECB's monthly news conference Thursday, said the central bank would continue to provide special liquidity measures to commercial banks through the first quarter of 2011 to combat "acute" market tensions, but announced no other new measures.

He specifically declined to comment on speculation that the bank would boost bond purchases, a more aggressive answer to the region's financial concerns that some investors had hoped for.

Closer to home, the National Association of Realtors said its pending-home-sales index climbed 10.4% in October, with the trade group's chief economist saying an improving labor market is giving a lift to the housing industry.

Ahead of the opening bell, the government had reported that initial jobless claims increased by 26,000 to 436,000 last week, while the four-week average declined to a two-year low of 431,000.

Deal news was also mildly supportive. U.S.-listed shares of Wimm-Dann Foods (NYSE:WBD) surged 28% after PepsiCo Inc. (NYSE:PEP) said it would buy a majority stake in the Russian company for $3.8 billion.

In company news:

Merck & Co. (NYSE:MRK) gained after the drug maker agreed to buy privately-held SmartCells for $500 million.

Shares of Chevron (NYSE:CVX) gained following a Reuters report saying that China petrol giant Sinopec would buy a minority stake in its deepwater gas fields in Indonesia. The deal is still subject to review by Indonesia and Chinese regulators.

Shares of Clearwire (CLWR) fell after it announced that its operating subsidiary Clearwire Communications LLC plans to raise over $1.1 billion through the offering of debt securities in private placement transactions.

Google (NASDAQ:GOOG) and Yahoo (YHOO) are higher in the regular session following news that the anti-monopoly agency in Japan gave the nod to an alliance between Yahoo Japan and Google, Reuters reported. Yahoo Japan is that country's top Internet portal and said it would adopt Google's search engine, which would collectively give the companies control over nearly all Japan's domestic search market.

Janus Capital (NYSE:JNS) shares were higher after the Denver-based mutual fund firm said that it is not a target in the insider trading probe the government initiated last month, Reuters reported. Last week, news that the federal government had asked Janus to deliver information for the probe had sent shares plunging.

Shares of retailers were mixed after pre-market November same-store sales results:

--Pier 1 Imports (NYSE:PIR) slipped after reporting Q3 same-store sales increase 10.2%

--Costco (NASDAQ:COST) fell after reporting November comparable store sales increased 9%.

--Limited Brands (LTD) gained after saying November comparable store sales increased 10%.

--The Wet Seal (WTSLA) gained after saying November comparable store sales increased 7%.

--Macy's (NYSE:M) shares gained then fell after saying November comparable store sales increased 6.1%.

--Abercrombie & Fitch (NYSE:ANF) jumped after saying November comparable store sales increased 23%.

--American Eagle Outfitters (NYSE:AEO) fell after saying November comparable store sales dropped 4%.

--Nordstrom (NYSE:JWN) shares fell after saying November comparable store sales rose 5.1%.

--Saks (NYSE:SKS) gained after saying November comparable store sales rose 5.3%.