Markets Higher, Closing News 4/12/12

Stocks continued the rally for a second day, as investors’ optimism over 1st quarter earnings outweighed weaker than forecasted economic data and a worsening Euro Zone debt crisis.  The Bank of Japan and several Federal Reserve (“Fed”) members speaking at various events added to buoyancy from investor expectations that central banks will provide additional stimulus to jump start the recovery.

The Labor Department reported that weekly initial jobless claims increased by 13K in the week ended April 7, which is the sharpest weekly climb since January 28.  The median forecast in a Bloomberg News survey called for 355K claims.  This could be a sign the labor market may be losing momentum and confirming the Fed’s concern that stronger demand is required to bolster labor market. 

The Bureau of Labor Statistics’ Producer Price Index (PPI) was unexpectedly weak in March, falling 1 percent, following a spike in February of 1.3 percent, the as a result of lower gasoline prices which offset minimal increases in food prices.  The Fed’s beige book said the central bank is concerned with higher transportation costs, as it might cause demand destruction.

According to the Commerce Department, the trade deficit narrowed more than forecast in February as imports fell by the most in three years, as a result of lower demand for crude oil and a drop-off in demand for Chinese goods.   The trade gap fell 12 percent to $46 billion, the smallest since October, from a revised $52.5 billion in January.  CNBC economic reporter Steve Liesman pointed out that  the Chinese Lunar New Year holiday may have also contributed to the slump in imports.

Market Indices/Statistics:

  • Dow closed up 181.19 pts/+1.41% to 12,986.58

  • S&P closed up 18.86 pts/+1.38% to 1,387.57

  • Nasdaq closed up 39.09 pts/+1.30% to 3055.55

  • 26 of the 30 Dow stocks closed higher

  • All 10 S&P 500 sectors closed up

  • Energy, Materials, Technology, and Industrials were the best performing sectors

  • The VIX was down 2.82 to 17.20

  • Oil is up $0.93 to $104.56

  • Nat Gas is down $0.001 to $1.986

  • Gold is up $17.80 to $1,677.90

  • Euro vs. Dollar is up $0.0079 to $1.3189

  • Dollar vs. Yen is up $0.015 to $80.86

Companies in the News:

Google Inc. (GOOG) reported better than expected first quarter earnings with $10.65 billion in revenues, a profit of $10.08 a share despite their cost of clicks decreasing by 12%.  The company also proposed a new class of non-voting stock which would create a 2-for-1 stock split.  Google closed at $651.01, up $22.05.

Royal Dutch Shell (RDS.A) said it is investigating a report of an oil sheen spotted in the Gulf of Mexico. The company has wells in the area, but it said it is not the source of the oil sheen.  Royal Dutch Shell closed at  $67.86, up $0.11.

Reports indicate Best Buy Inc.’s (BBY) board is investigating allegations that former CEO Brian Dunn used the company’s resources during an inappropriate relationship with a female employee.  The company declined to comment.  Best Buy closed at $22.24, up $0.28.

Hewlett-Packard Company (HPQ) rose the most in more than five months after PC shipment unexpectedly grew in the first quarter of 2012.  Hewlett-Packard closed at $25.10, up $1.69.

Alpha Natural Resources Inc,. (ANR) closed higher despite Goldman Sachs lowering its forecast for natural gas prices. Alpha Natural closed at $16.08, up $1.45.

Rite Aid (RAD) reported a quarterly loss of 18 cents a share on $7.1 billion in revenue, in line with expectations.  Rite Aid closed at $1.72, up $0.02.

Coming Friday:

Economic Reports:  Consumer Price Index at 8:30 a.m. and Consumer Sentiment  at 8:30 a.m. 


Paras Madho

NYSE Euronext

Market Watch & Corporate Actions

20 Broad Street | New York NY 10005
P:  (212) 656-5404


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