Markets advanced in a narrow range closing off the highs of the day as better than expected economic reports and upbeat corporate earnings kept the rally in equities alive. The Dow inched closer to four-year highs and the VIX dipped below 14 for the first time in five years.
On the economic front, consumer sentiment inched higher to 73.6 in August, its highest level since May, which could encourage more Americans to increase spending and boost economic growth. Leading indicators jumped 0.4% in July to 95.8 due in part to a fall in jobless claims and a rise housing permits.
European shares are trading at their highest levels in over a year, after investors were reassured by German Chancellor, Angela Merkel that the ECB and other European leaders will work together to ease the debt crisis as outlined by Mario Draghi’s earlier this month.
The Dow has rallied 9% since June.
Have a good weekend.
Market Indices/Statistics:
- Dow closed up 25.09 pts/+0.19% to 13,275.20
- S&P closed up 2.65 pts/+0.19% to 1,418.16
- Nasdaq closed up 14.20 pts/+0.46% to 3,076.59
- 13 of the 30 Dow stocks closed higher
- 5 of the 10 S&P 500 sectors closed up
- Technology was the most positive sector (+0.66%); Healthcare was the most negative sector (-0.55%)
- The VIX ended down 0.84 at 13.45
- Oil is up $0.53 to $96.42
- Nat Gas is up $0.021 to $2.970
- Gold is down $0.80 to $1,618.40
- Euro vs. Dollar is down $0.0028 to $1.2326
- Dollar vs. Yen is up $0.22 at $79.54
Top Headlines:
Caterpillar Inc.’s (CAT, +$1.42/+1.6% to $90.01) heavy equipment sales accelerated in Q2 as a pickup in North America and Asia offset sales declines in Europe, Latin America, the Middle East, and Africa.
Forest Oil Corp (FST, +$0.34/+4.4% to $8.01) is trading higher on larger than normal volume as speculation rises that the company is a takeover target.
Gap Inc. (GPS, +$1.65/+4.8% to $35.99) moved higher with increased volume on positive earnings results reported yesterday, strength in the sector and after several analysts raised their ratings on the company. Ralph Lauren Corp (RL, +$7.39/+4.9% to $159.79) was also on the list of most active S&P stocks.
Groupon Inc. (GRPN, -$0.25/-5.0% to $4.75) traded below the $5.00 level in a heavy session as the beleaguered internet coupon site received a downgrade by Evercore in the face of what the firm believes is slowing growth.
MetroPCS Communications Inc. (PCS, +$0.49/+5.1% to $10.03) is the most active S&P security after JPMorgan noted yesterday that there is renewed talk of consolidation coming in the wireless industry.
Molycorp Inc. (MCP, -$1.32/-11.8% to $9.84) was under pressure on heavy volume after the company announced its plans to raise up to $450 million in a debt and equity offering in order to raise capital for its Mountain Pass mine and general business initiatives. Additional pressure resulted from a Dalhman Rose downgrade.
Earnings:
Ann Inc. (ANN, +$5.75/+20.4% to $33.89) reported Q2 EPS of $0.63 vs. estimates of $0.51; revenue was $594.9 million, better than the $585.6 million expected by analysts. Sales were higher as excitement over affordable and colorful clothes drove shoppers to the Ann Taylor and LOFT stores.
Foot Locker (FL, +$0.60/+1.7% to $35.09) reported Q2 EPS of $0.39 vs. estimates of $0.33; revenue was $1.37 billion, better than the $1.35 billion expected by analysts.
J.M. Smucker (SJM, +$3.99/+5.1% to $82.96) reported Q1 adjusted EPS of $1.17 vs. estimates of $1.00; revenue was $1.369 billion, better than the $1.30 billion expected by analysts.
Coming Monday:
Economic Reports:Chicago Fed National Activity Index (-0.15 previously) at 8:30 a.m.
Earnings: Fabrinet (est:$ 0.26), Lowe's Cos. (est:$ 0.7), ShangPharma Corp. ADS (est:$ 0.2)
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