Stocks Push Higher As Fed Speculation Grows

Includes: DIA, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Average is up 95.51 (+0.75%) to 12,837.33
  • S&P 500 is up 13.20 (+0.98%) to 1,357.98
  • Nasdaq Composite Index is up 34.43 (+1.19%) to 2,929.76


  • Hang Seng Index down 0.06%
  • Shanghai China Composite Index down 0.66%
  • FTSE 100 Index up 1.73%

Stocks rallied into Tuesday's close, rising for a fourth day to a one-month high as traders contemplated whether the Federal Reserve will announce additional liquidity measures tomorrow.

Nearly all industry sectors in the S&P 500 finished with broad gains - led by financial and energy companies, each rising nearly 2% each as a group. The only groups ending in the red today were the normally defensive consumer staples and utilities groups. Crude oil and copper rose on the stimulus speculation while gold declined despite the U.S. dollar weakening.

Economic data released this morning was mixed, with housing starts last month retreating to 708,000, down 9,000 from the prior month and also lagging estimates by 12,000 houses. But new permit activity surprised Wall Street, coming in at 780,000 units in May, easily beating expectation for contractors pulling 736,000 permits last month.

Retail sales at chain stores also improved, rising 2.4% from year-ago levels, according to the weekly Redbook survey. The ICSC-Goldman Store Sales index was up 3.6% over the same week last year.

But today's middling news on housing seemed to spark a risk-on trade, as investors speculated it would encourage further easing by the Fed. The most popular theory has the FOMC extending its Operation Twist program of selling short-term securities while buying longer-term ones, working to keep a lid on long-term interest rates.

In commodities trade, crude oil for August delivery rose 73 cent to $84.33 a barrel while, July natural gas fell 8 cents to $2.55 per 1 million BTU. August gold fell $3.40 to $1623.30 an ounce while July silver gave up 29 cents to $28.37 an ounce. July copper rose 3 cents to $3.43.


(+) NWK, Agreed to be acquired by Sonus Networks for $41.3 million.

(+) VRNG, Wins intellectual property and patent hearing in federal court.

(+) CTRN, Upgraded to Positive from Neutral at Susquehanna.

(+) ROSG, Company's miRview mets2 approved for Medicare reimbursement.

(+) ZLCS, Successfully completes Phase I study of new pain medication.

(+) URZ, Uranium producers rally as two Japanese reactors restart.


(-) BKS, Reports wider-than-expected loss.

(-) JCP, Company's chief marketing officer forced out after only 8 months on the job.

(-) MDGN, Completes $9.5 million private placement.

(-) WAG, Spends $6.7 billion for stake in Alliance Boots.

(-) OINK, Terminates exclusive sales and supply pacts with An Puluo Food Inc.