Markets Up, Closing News 5/27/11

The Dow closed 38 points higher today building a three-day winning streak going into the holiday weekend. Markets were higher on the University of Michigan Consumer Sentiment Report, which reported an increase in consumer sentiment for May, and commodities, which pushed the energy and materials sectors higher.

The University of Michigan Survey of Consumer Sentiment reported today that consumer sentiment rose to 74.3, a 0.9 increase from the preliminary May reading of 72.4. Economists had expected the reading to remain unchanged.

Personal Income was reported in-line with expectations, increasing by 0.4%, before the bell this morning, but personal spending raised concerns, reporting a 0.4% increase vs. 0.5% expected. Spending grew less than expected because high food and gas prices were placing a strain on consumers’ budgets. While the increase was less than expected, it did mark the tenth straight month of spending increases.

Greece failed to reach an agreement today on its austerity measures as the tax cuts to reduce budget deficit were rejected. EU and IMF officials maintain that time is running out for Greece to come to an agreement on how to use the bailout funds in a way that will guarantee Greece can meet its funding needs.

Happy Memorial Day weekend everyone, and don’t forget to thank a veteran as you soak in the sun, beach, barbeques and the unofficial start of summer!

Market Indices/Statistics:

  • Dow closed up 38.82 pts/+0.31% to 12,441.58
  • S&P closed up 5.41 pts/+0.41% to 1,331.10
  • Nasdaq closed up 13.94 pts/+0.50 to 2,796.86
  • 23 of the 30 Dow stocks closed up / 7 closed down
  • All 10 S&P 500 sectors closed up
  • Materials was the best performing sector (up 1.03%)
  • The VIX is down 0.12 pts to 15.97
  • Oil is up $0.39 to $100.62
  • Nat Gas is up $0.161 to $4.521
  • Gold is up $13.60 to $1,537.30
  • Euro vs. Dollar up $0.0159 to $1.4294
  • Dollar vs. Yen down $0.51 to $80.84

Companies in the News:

CVS shares closed higher today (+1.70% to $38.80) after announcing it has won a three-year contract with the Blue Cross Blue Shield Association for specialty-pharmacy benefit coverage for federal employees. Medco Health Solutions Inc., who had the contract before CVS, closed lower (-8.97% to $58.66) on the day.

Boardwalk Pipeline Partners closed lower (-2.99% to $29.20) today after announcing it priced its public offering of six million common units at $29.33 per unit. Proceeds from the offering will be used to repay borrowings from the outstanding credit facility or general partnership purposes.

Chipotle Mexican Group (+0.71% to $292.94) hit $293.99 and The JM Smucker Co. (+1.22% to $78.26) hit $78.44, both marking all time highs in today’s trading session.

Shares of Aflac were lower on the day (-3.21% to $48.00) after Morgan Stanley announced it is cutting the outlook on the insurer from overweight to equalweight. The cut came after Morgan Stanley examined capital levels for life insurers in Japan and determined that the capital levels relative to their peers will restrict AFL’s management opportunities.

Earnings:

Shares of Paragon Shipping Inc. slid today (-6.45% to $2.61) after reporting Q1 earnings per share of $0.12 on revenue of $29 million. The news driving the decline was that the Board of Directors decided to suspend the $0.05 per share quarterly dividend.

Royal Bank of Canada also fell today (-2.62% to $58.71) after announcing their quarterly earnings before the bell this morning. RY reported Q2 earnings per share of C$1.00 vs. estimates of C$1.12. Adding to pressure on the shares was speculation that the bank was under regulatory pressure to raise capital.

Coming Tuesday:

Economic Reports: Case-Shiller Home Price Index at 9:00, and Consumer Confidence Index at 10:00 am; Earnings from Hovnanian Enterprises, Lions Gate Entertainment and Phillips Van Heusen.