Starting the Week With a Rally

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Includes: BAC, BB, BMY, CSCO, DIA, ICGN, QQQ, SPY
by: Midnight Trader

4:10 PM, Jun 27, 2011 --

  • NYSE up 56.38 (+0.7%) to 8,031.10
  • DJIA up 108.98 (+0.9%) to 12,043.56
  • S&P 500 up 11.65 (+0.9%) to 1,280.10
  • Nasdaq up 35.39 (+1.3%) to 2,688.28


GLOBAL SENTIMENT

  • Nikkei down 1%.
  • Hang Seng down 0.6%.
  • Shanghai Composite up 0.4%.
  • FTSE100 steady.


UPSIDE MOVERS

(+) CSCO downgraded this morning.

(+) AGNC upgraded.

(+) HRZ amends credit agreement.

(+) ICGN confirms it's in talks with PFE.

(+) BHP upgraded.

(+) PHG gains despite downgrade.

(+) CAG upgraded.

(+) LDK announces buyback.

(+) SAPE upgraded.

(+) XOMA gains on discovery news.

DOWNSIDE MOVERS

(-) SONE merging with Fundtech.

(-) AZN gives disappointing diabetes drug update.

(-) PTIE says FDA rejects NDA resubmission for REMOXY.

MARKET DIRECTION

Stocks ended in the upper portion of the day's range as Wall Street welcomed a French proposal to help debt-troubled Greece and positive tech-sector news.

The eurozone debt situation remains a primary factor ahead of a Greek vote this week on additional austerity measures. Approval of the tighter Greek budget measures is a condition for the release of more aid from international lenders from the bailout package agreed last year. The Wall Street Journal reported that French President Nicolas Sarkozy has endorsed a plan drafted by French banks to reinvest half the proceeds from maturing Greek bonds into new 30-year bonds.

As for individual movers, both Bank of America (NYSE:BAC) and Amazon.com (NASDAQ:AMZN) gained on favorable analyst notes.

Stocks gained despite early news showing consumer spending for May was less than expected. Meanwhile, inflation data showed the largest gain in over a year.

Consumer spending was flat in May, making for the weakest reading in almost a year. Consumer spending adjusted for inflation declined 0.1% for the second straight month in May, the Commerce Department said. Meanwhile, personal income rose 0.3% in May.

May's figures came in mixed in terms of market expectations. Spending rose less than the 0.1% expected, while income growth matched the forecast of economists surveyed by MarketWatch.

The personal consumption expenditure index, which Federal Reserve officials say is a more accurate gauge of inflation than the better-known consumer price index, increased 0.2% on the month. On a year-over-year basis, the PCE price index is up 2.5%.

The core rate of inflation, which excludes food and energy prices, rose 0.3% in May, the largest gain since October 2009. The 12-month core rate was up 1.2%, still well below the Fed's implicit target of just below 2%.

Commodities fell. Light, sweet crude oil for August delivery finished down 0.6% to $90.61 a barrel. In other energy futures, heating oil was up 0.54% to $2.76 a gallon while natural gas was up 0.61% to $4.25 per million British thermal units.

Gold futures ended below $1,500 an ounce as the dollar also lost strength. Gold for August delivery finished down 0.3% to $1,496.40 an ounce. In other metal futures, silver was down 2.91% to $33.64 a troy ounce while copper traded down 0.73% to $4.08.

In company news:

Icagen (NASDAQ:ICGN) soared after it said late Friday it is currently engaged in preliminary discussions with Pfizer (NYSE:PFE) regarding a potential strategic transaction. The statement was in response to a PFE SEC filing in which it said it was evaluating a strategic deal with ICGEN that could change or influence the control of ICGN by means of a stock or asset acquisition or merger.

Shares of Bank of America (BAC) firmed as the nation's largest lender received some positive comments from Rochdale Research analyst Richard X. Bove, who said that the bank is "massively undervalued," according to a CNBC report on the comments. Bove said that while he is underweight on banking stocks for a number of reasons, other investors who are willing to accept depressed short-term returns will find BAC to be a "very very undervalued stock," the report said.

Shares of Bristol-Myers Squibb (NYSE:BMY) and AstraZeneca (NYSE:AZN) fell after a release saying that patients taking an experimental diabetes pill developed by the two drug makers--that had been shown to be effective--had more bladder and breast tumors than those on a standard treatment.

Shares of Research in Motion (RIMM) fell as Bloomberg reports the smartphone maker is losing support among some of its software developers who make applications of the company's BlackBerry device. As examples, the report cites the decision of Seesmic and Mobile Roadie--two application developers--to stop masking products for RIM.

Shares of Cisco Systems (NASDAQ:CSCO) gained even as the company is reportedly downgraded to Neutral from Outperform at Cowen. Shares are up 0.4%, or $0.06, to $14.99. Cowen analyst John Marchetti reportedly said in a note to clients that Cisco will see growth remain at "depressed levels," as customers move to products from rivals, according to a MarketWatch report of the note.

Shares of video game makers, including Electronic Arts (ERTS), Activision Blizzard (NASDAQ:ATVI), Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) were mixed as the US Supreme Court struck down a law in California that banned sales and rentals of violent video games to minors. The law was struck down as a violation of free-speech rights. The ruling was the first of the high court in a video game case.