Markets Higher, Closing News 4/11/12

Markets snapped a 5 day losing streak though closed off the highs of the session. Encouragement over domestic earnings and ECB comments added to the buying trend.

Alcoa, the first Dow 30 company to report earnings for the first calendar quarter, reported better than expected earnings and expressed positive sentiment for its global business in the upcoming year.  The report gave investors the push they needed to buy into the recent sell off in the markets.

ECB board member, Benoît Cœuré, said that the ECB may need to step in and buy Spanish bonds, which drove yields lower below 6% and gave investors hope that ECB support remains a factor in the Euro zone recovery.

As headlines from the Fed’s Beige Book report started to run, markets trimmed their gains somewhat deflated by the conservative tone despite it providing more optimism than in recent quarters.  The Federal Reserve noted that the economy is in the midst of a modest to moderate recovery as consumer spending trends are encouraging; hiring is accelerating; retail is improving and the real estate market is turning.  The Federal Reserve remains concerned over higher gas prices and the financial recovery in Europe.

Oil prices rose today after a report showed that domestic fuel stocks fell more than expected last week.  Natural Gas fell below $2.00 today due to an abundance of supply; concern over the support level extends pressure on the commodity and natural gas companies.

Market Indices/Statistics:

  • Dow closed up 89.46 pts/+0.70% to 12,805.39

  • S&P closed up 10.12 pts/+0.74% to 1,368.71

  • Nasdaq closed up 25.24 pts/+0.84% to 3016.46

  • 24 of the 30 Dow stocks closed higher

  • All 10 S&P 500 sectors closed up

  • Financials was the most positive sector (+1.59%); Energy was the least positive sector (+0.02%)

  • The VIX was down 0.37 to 20.02

  • Oil is up $1.54 to $102.56

  • Nat Gas is down $0.046 to $1.985

  • Gold is down $1.80 to $1,658.90

  • Euro vs. Dollar is up $0.0028 to $1.3109

  • Dollar vs. Yen is up $0.15 to $80.85

Companies in the News:

Alcoa Inc. (AA, +$0.58/+6.2% to $9.90) is the leading Dow performer today a day after posting better than expected earnings amidst hopeful comments from management on the health of the aluminum sector as well as the global growth prospects for the company’s other business units.

Apple Inc. (AAPL, -$1.77/-0.3% to $626.20) is trading lower after the Justice Department announced that it had settled an antitrust lawsuit against the company and other e-book retailers over alleged e-book pricing control strategies.  Barnes & Noble Inc. (BKS, -$0.19/-1.6% to $11.73) was under pressure on the announcement as well.

Google (GOOG, +$8.68/+1.4% to $365.96) is up on positive speculation over earnings coming out tomorrow, particularly as investors eye stronger pay for click metrics.

Nokia Corp (NOK, -$0.79/-15.7% to $4.24) shares were under pressure after the company offered updated first quarter and FYE outlook that was negatively affected by the company’s devices and services business to a greater degree than previously anticipated.  The company now expects the division to experience a 3% decline in its margins vs. previous guidance of break even for the first quarter.

Owens Illinois (OI, +$1.51/+6.9% to $23.52) shares traded higher after pre-announcing better than expected Q1 earnings.  The company reported that they expect to see a 35% improvement over Q1 2011 EPS of $0.50.  The positive results are due to solid manufacturing performance thanks to efficient production at the companies’ facilities.

PulteGroup, Inc. (PHM, +$0.70/+9.1% to $8.39) was one of the biggest gainers among the S&P companies.  Encouragement over a mild winter and an early spring selling season have brought the homebuilders in focus as some believe 2012 might be the recovery year for the industry.  Beazer Homes USA Inc. (BZH, +$0.19/+7.1% to $2.87), Lennar Corp (LEN, +$1.25/+5.1% to $25.75) and D.R. Horton (DHI, +$0.68/+4.8% to $14.73) were also higher today.

SUPERVALU Inc. (SVU, +$0.42/+6.9% to $6.55) continued its forward momentum after reporting Q4 EPS of $0.38 above expectations of $0.35.  Earnings were better than expected as the company had been trying to cut costs in order to lower prices and attract competitors’ customers.  Those strategies, coupled with a positive report that is reshaping a broad view that the company is heading for financial distress, has the stock reacting positively.  The company gave a strong FYE outlook of $1.27-$1.42 above estimates of $1.19.

Coming Thursday:

Economic Reports:  Feb. Trade Balance (-$51.8 bil. expected), March Producer Price Index (+0.3% expected), Jobless Claims (355k expected) at 8:30 a.m.  

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