Stocks Surge on Stimulus Speculation

Includes: DIA, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Average up 286.84 (+2.37%) to 12,414.79
  • S&P 500 up 29.63 (+2.30%) to 1,315.13
  • Nasdaq Composite Index up 66.61 (+2.40%) to 2,844.72


  • Hang Seng Index up 1.43%
  • Shanghai China Composite Index down 0.10%
  • FTSE 100 up 2.36%

Stocks closed broadly higher, posting their best day of 2012 with the Dow Jones Industrial Average returning back into the black for the year as traders speculated central banks may soon provide additional stimulus to keep the global economy from sliding into recession. Energy and financial stocks led all 10 industry sectors in the S&P 500 higher, with shares of technology and industrial companies also each rising more than 2% as a group. Crude oil eased slightly near the close but finished with a 1% advance at $85.03 a barrel. Gold also rose moderately with traders expecting currencies to weaken if the Federal Reserve or other central bankers follow through with stimulus plans.

The Fed today said in its Beige Book survey of business conditions that the U.S. economy maintained a moderate pace of growth. The policy-setting Federal Open Market Committee meets next week starting June 19 to consider whether more stimulus is needed after the economy added the fewest jobs in a year in May. Fed Bank of Atlanta President Dennis Lockhard helped ignite speculation prior to the market open today, telling an audience in Jacksonville, Fla., that an extension of Operation Twist is an "option on the table."

Earlier today, the European Central Bank (ECB) kept its benchmark rate at 1%, as expected, even as some members preferred a rate cut. EBC President Draghi said officials stand ready to act as the euro region's outlook worsens. A deal that would allow Spain to recapitalize stricken banks with aid from its European partners is in the works, Reuters reported, citing German officials.

In company news, Supervalu Inc. (NYSE:SVU) finished with a 0.8% decline after the grocery store chain announced plans to eliminate as many as 2,500 positions at its Albertsons stores in California and Nevada. The layoffs are expected to begin next week and should be completed near July 1, according to a statement today. Albertsons is the biggest retail chain in Supervalu's family of grocery stores.

Also, LinkedIn Corp (LNKD) shares slid today and the professional social networking company saying it is unable to confirm whether hackers have accessed as many 6 million LinkedIn passwords. In a Twitter feed, the company said, "Our team continues to investigate, but at this time, we're still unable to confirm that any security breach has occurred."

Researchers at Sophos, an U.K. Web security company, earlier said they found a file posted online containing LinkedIn password "hashes" - a form of unencrypted passwords. A Sophos consultant recommended LinkedIn users change their passwords immediately.

Commodities were mostly higher. Crude oil for July delivery rose 77 cents at $85.06 with July natural gas falling 3 cents to $2.42 per 1 million British thermal units. August gold rose $17.40 to finish at $1634.40 an ounce with July silver adding $1.13 to $29.55 per ounce. July copper rose 7 cents to $3.37.


LPI, Revised 2012 production guidance and capital program.

LOW, Barron's story said retailer is streamlining its operations.

AONE, Plans to hire up to 400 people in response to increased business.


BOBE, Posted Q4 EPS of $0.68, ex items, on $413.5 million in revenues, trailing estimates.

MIND, Missed Q3 performance expectations.

NDZ, Adjusted EPS of $0.08 was $0.03 a share below Capital IQ consensus.