Modest Gains After Volatile Session

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Includes: DIA, QQQ, SPY
by: Midnight Trader

4:14 PM, Sep 13, 2011 --

  • NYSE up 63.61 (+0.9%) to 7,110.43
  • DJIA up 44 (+0.4%) to 11,106.23
  • S&P 500 up 10.57 (+0.9%) to 1,172.85
  • Nasdaq up 37.06 (+1.5%) to 2,532.15

GLOBAL SENTIMENT

  • Nikkei up 1%.
  • Hang Seng closed.
  • Shanghai Composite down 1%.
  • FTSE-100 up 0.8%.
  • DAX-30 up 1.8%.

DOWNSIDE MOVERS

(-) CODE cuts sales view.

(-) BBY firms despite earnings miss, lowered guidance that straddles Street view.

(-) CSCO slips as company sets mixed targets; pegs 5%-7% revenue growth over three years.

UPSIDE MOVERS

(+) GS initiated with Equal Weight at Morgan Stanley.

(+) FRO terminates charters for three single hull VLCCs.

(+) HRB won't offer RALs for 2012 tax season.

(+) SOL says company and CEO buy shares.

(+) MGM upgraded.

(+) LMT upgraded.

(+) JPM upgraded.

(+) MON upgraded.

(+) LXRX reports positive diabetes drug trial results.

(+) VVUS reports positive Avanfil Phase 3 results.

(+) BQI cancels rights offering.

(+) TASR inks new contract.

(+) SPPI sets buyback.

MARKET DIRECTION

Stock averages end higher as the globe paused its worried vigilance over Europe's debt woes. Wall Street's leading indexes twisted initially in step with European volatility before ending near the top of the day's range. The Nasdaq logged the steepest gain, up 1.5%. Banking shares and the leading averages recovered there as officials spoke out in an effort to calm the debt-contagion fears that dominated trading in the previous session.

Among the public commentary, German Chancellor Angela Merkel expressed optimism that European leaders would resolve Finland's objections to rescue measures for Greece.

A Financial Times report said China could buy Italian bonds and invest in some companies there. According to news reports, strategists at MF Global added: "We would not be surprised to see China come in with a much bigger check-book, perhaps rivaling the size of the stabilization fund itself, in an attempt to shore up the European debt market and preserve an important export hub for themselves."

A senior banking official in China reportedly told Market News International that the government may not agree to a proposal to buy Italian debt owing to the instability of European bond markets.

In the latest economic data, the National Federation of Independent Business small business optimism index fell 1.8 points last month to 88.1. That marks the sixth drop in a row, MarketWatch reported. Also, the Labor Department reported the cost of imports into the U.S. declined 0.4% in August.

Equity gains prompted crude gains. Oil futures closed 2.3% higher at $90.21 a barrel, the best level in nearly six weeks.

In company news:

Shares of Internet giant Google (NASDAQ:GOOG) slipped as Bloomberg reported the Internet giant is allowing users to opt out of its location-based services. The move will take effect later this year following requests by European authorities.

Best Buy (NYSE:BBY) turned lower after initial gains. The electronics retailer said Q2 sales were $11.347 billion, just below the Thomson Reuters mean for $11.47301 billion. Diluted EPS were $0.47, below estimates for $0.53. FY12 sales are seen between $51.0 billion to $52.5 billion, compared with estimates for $52.06612 billion. EPS are seen between $3.35 to $3.65, including the estimated impact from fiscal 2012 share repurchases (expected to benefit annual EPS by $0.20 to $0.25). Estimates, usually less items, are seen at $3.46. Shares are up 0.2%.

Hewlett-Packard (NYSE:HPQ) climbed out of the red after it said it had extended its deadline to buy British software company Autonomy for $11.2 billion. The new deadline is Oct. 3 and the company said 41.6% of shares outstanding had been tendered as part of the offer. The company must snare 33.4% support from Autonomy investors to delist it from the London Stock Exchange.

Shares of Pfizer (NYSE:PFE) traded flat to firmer as the company extended its tender offer for all the outstanding shares of Icagen (NASDAQ:ICGN). The offer, for $6 a share, will expire at 6 p.m. Monday and will not be extended again. Pfizer already owns 67% of Icagen's common stock.

Shares of JPMorgan Chase (NYSE:JPM) firmed after the bank was reportedly upgraded to Buy from Hold at Stifel Nicolaus. The firm has a price target of $40 on JPM shares. In his note, Stifel analyst Christopher Mustascio noted JPM's 25% decline since the end of May and that, given the subdued environment, it is time to start accumulating the stock, as reported by Barron's.