Markets Higher, Closing News 7/7/11

The recent rally continued today on the back of good economic data, as the ADP report and initial jobless claims boosted investor confidence ahead of tomorrow’s non-farm payrolls and unemployment report.  The Dow closed up 93 points, higher for the seventh time in eight sessions: the Rally Monkey is out and in full effect.


ADP Non-Farm Payrolls crushed expectations this morning, coming in at +157k in June vs. forecasts of +68k for the month.  The report was encouraging across the board, as small, medium and large business hires were reported higher than expected, and the service-providing industry reported 18 consecutive months of employment gains. 


The European Central Bank raised interest rates 25 basis points to 1.50% for the second time in three months.  The ECB also announced that it will continue to provide Portugal with liquidity regardless of ratings, trying to calm investors’ fears after Moody’s downgraded Portugal into junk status earlier in the week.


Jobless Claims were reported slightly better than expected, falling 14k to 418k from 432k the prior week.  Economists had been expecting initial claims to fall 12k to 420k for the week of July 3.  The claims are expected to undergo revisions next week because six states were unable to provide complete readings on the labor market.


Oil traded higher (+1.90%) after today’s economic reports, despite oil inventories falling less than analysts had been expecting.  The Department of Energy reported that oil inventories fell by 889k barrels last week, much lower than the 3.2  million barrels that analysts were forecasting.


Derek Jeter got his 2,997th hit last night, and is now only three away in his march towards 3,000.  It looks like most fans are expecting the historic hit to come tomorrow night against the Tampa Bay Rays, even the seats up in the “nose bleeds” are going for almost $100 each.


Market Indices/Statistics:



  • Dow closed up 93.47 pts/+0.74% to 12,719.49

  • S&P closed up 14.00 pts/+1.05% to 1,353.22

  • Nasdaq closed up 38.64 pts/+1.36% to 2,872.66

  • 26 of the 30 Dow stocks closed higher / 3 closed lower / AT&T was flat

  • 8 of the 10 S&P 500 sectors closed higher

  • Financials was the best performing sector (up 1.58%)

  • Health Care was the laggard (down 0.07%)

  • The VIX is down 0.39 pts to 15.95

  • Oil is up $1.90 to $98.55

  • Nat Gas is down $0.053 to $4.169

  • Gold is up $1.80  to $1,531.00

  • Euro vs. Dollar up $0.0040 to $1.4357

  • Dollar vs. Yen up $0.28 to $81.20

Companies in the News:


Shares of NYSE Euronext traded higher (+3.03% to $35.40) after announcing that its shareholders have approved the business combination agreement with Deutsche Boerse AG.  Based on preliminary results, 96.09% of the shares present at the special meeting voted for the approval of the combination, representing 65.68% of NYX’s outstanding common shares.


Several retailers reported June same store sales before the market opened, reporting positive growth on sales over the same five week period in 2010. TJX Companies (+2.23% to $54.99), Macy’s (+5.51% to $30.46), and Target (+6.67% to $51.67) all traded higher in today’s session.


JP Morgan traded higher (+1.87% to $41.32) after reaching a settlement with the SEC relating to discontinued municipal derivatives activities that took place in or before 2006.  As part of the settlement JP Morgan will pay a net amount of $211 million to the SEC, IRS, Department of Justice, and other regulators.


The Commonwealth of Kentucky awarded new contracts for Medicaid managed care to Coventry Health Care, Wellcare Health Plans, and Centene Corporation.  The contracts are for three years, and operations are expected to begin in October 2011.  CVH (+0.83% to $37.72), WCG (+2.94% to $54.96), and CNC (+3.05% to $37.87) all traded higher on the news.


Parkway Properties announced the sale of their joint venture, Maitland 200, an office property located in the Maitland submarket of Orlando for $23 million before the bell this morning.  Shares of PKY traded 2.55% higher to $17.71 in today’s trading.


Earnings:


Shares of Zep Inc. traded higher (+2.64% to $20.22) after reporting their Q3 earnings this morning.  ZEP reported Q3 earnings per share of $0.32 (in-line), and shares traded higher because the company announced it expects to see benefits from price increases in Q4.


AAR Corp. also traded higher on earnings news (+4.99% to $30.10) after reporting Q4 results after the bell last night.  AAR Corp. beat analysts’ expectations on both the top and bottom line, reporting Q4 earnings per share of $0.55 from continuing operations on revenue of $479 million vs. consensus of $0.46 per share on revenue of $459 million.


Lumber Liquidators slid today (-28.55% to $18.32) after updating their Q2 and FY guidance.  The company announced they are cutting their Q2 earnings outlook to $0.18-$0.20 per share and their FY earnings outlook to $1.00-1.15, well below analysts’ forecasts of $0.30 for Q2 and $1.19 for the year.


Coming Friday:


Economic Reports:Non-Farm Payrolls (expected to be 90k) and Unemployment Rate (expected to be 9.1%) at 8:30 am, Wholesale Inventories (expected to be 0.7%) at 10:00 am, and Consumer Credit (expected to be $3.5 billion) at 3:00 pm.