Markets Higher, Closing News 10/12/11

Gumby and Pokey

Image by katerha via Flickr

Markets traded higher today after European Economic and Monetary Affairs Commissioner Olli Rehn told a conference that “If we can agree on determined policy action, we have a good chance of not only avoiding financial calamity, but to put Europe back on the path of sustained recovery.” The Dow closed up 102.55 points on optimism on the progress being made in Europe as Slovakia looks set to approve the EFSF funds.

Members of the ruling party in the Slovakian government struck a deal with the leftist opposition today, one day after the current government failed a vote of confidence and the vote needed to approve increasing the European Financial Stability Fund. Slovakia is the last of the 17 member states to approve the measures, and the final vote to pass the plan is expected tomorrow or early Friday.

The Federal Open Market Commission (FOMC) released the minutes from their most recent meeting this afternoon, which signaled that Fed officials were split on what actions to take. Two officials favored taking bolder action, but were unable to commit to any specific movement. The FOMC noted that they continue to see outlook for growth, but inflation remains uncertain and the jobless rate will only fall gradually.

Harrisburg, the capital of Pennsylvania, filed for municipal bankruptcy today, after the city council approved the move in a 4-3 vote. The city of 50,000 has struggled to pay civil workers and its commitments to bond holders, who hold $300 million in debt, and officials are hoping that the move will give the city more bargaining power with its creditors.

Today marks what would have been the late Art Clokey’s, the creator of Gumby, 90th birthday today. Gumby, Clokey’s most famous character who made his first appearance on the Howdy Doody Show, got his name from the muddy clay called “gumbo” that Clokey used to play with growing up on his grandparents’ farm. Google honored Clokey with a unique animation on its home page.

Market Indices/Statistics:

  • Dow closed up 102.55 pts/+0.90% to 11,518.85
  • S&P closed up 11.71 pts/+0.98% to 1,207.25
  • Nasdaq closed up 21.70 pts/+0.84% to 2,604.73
  • 25 out of 30 Dow stocks closed higher/ 5 closed lower 
  • 9 of the 10 S&P 500 sectors closed higher
  • Financials was the best performing sector (up 2.67%)
  • Utilities was the only negative sector (down 0.14%)
  • The VIX was down 1.60 points to 31.26
  • Oil is down $0.74 to $85.28
  • Nat Gas is down $0.052 to $3.956
  • Gold is up $17.50 to $1,678.50
  • Euro vs. Dollar up $0.0139 to $1.3785
  • Dollar vs. Yen up $0.60 to $77.24

Companies in the News:

Shares of Liz Claiborne jumped higher today (+34.12% to $6.84) following the announcement that it has entered into a definitive agreement to sell its Liz Claiborne, Monet and Kensie brands for gross proceeds of $328 million.

Neustar Inc. entered into a definitive agreement to acquire TARGUSinfo, a provider of real-time, on-demand information and analytic services, for $650 million in cash. Shares of Neustar, Inc. traded higher (+7.35% to $30.10) in today’s session.

Cliffs Natural Resources Inc. also traded higher (+2.84% to $62.75) after last night’s announcement that operations at CLF’s Pinnacle Mine in West Virginia have resumed. Operations at the mine were suspended in May because of detected levels of carbon monoxide.

Earnings:

Alcoa traded lower today (-2.43% to $10.05) after kicking off earnings season last night. Alcoa reported earnings per share of $0.15 from continuing operations on $6.4 billion in revenue vs. analysts’ consensus of $0.22 per share on $6.22 billion in revenue.

Shares of Pepsico Inc. traded higher (+2.87% to $62.70) after reporting Q3 earnings per share of $1.31 on $17.58 billion in revenue. Analysts had been forecasting $1.30 per share on revenue of $17.18 billion. Chief Financial Officer Hugh Johnston commented on the growing speculation that Pepsi will spin-off the Frito Lay business, saying that keeping the companies together is the best way to promote shareholder value.

Host Hotels and Resorts Inc. reported funds from operation of $0.16 per share on $1.14 billion revenue, in line with analysts’ forecasts. Shares traded higher today (+4.23% to $11.84) because management sees revpar increasing 6.25-6.75% for 2011.

Coming Thursday:

Economic Reports:Trade Balance (expected to be -$45.8 billion) and Initial Jobless Claims (expected to be 405k) at 8:30 am; Earnings from Fairchild Semiconductor, JP Morgan, Safeway Inc., and Tempur-Pedic

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