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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.658375 |
| Euro to US Dollar | 1.495886 |
| Japanese Yen to US Dollar | 0.011301 |
| Canadian Dollar to US Dollar | 0.943931 |
A big rally set off by surging tech stocks and plunging oil prices powered the Dow Jones industrials to a new closing high this afternoon.
The blue-chip index finished up 73 points, 0.6%, to 12,515, passing the closing high of 12,510.57, set on Dec. 27. The index was up as much as 102 points during the day.
The Standard & Poor's 500 Index was up 8.9 points, or 0.6%, to nearly 12,424, and the Nasdaq Composite, laden with stocks that helped fuel the rally, was up nearly 26 points, 1%, at 2,485. The Nasdaq-100 Index ($NDX.X), which includes the bigger-capitalization stocks on the Nasdaq, was also up 1% at nearly 1,835.
The market shrugged off an earnings warning from software giant SAP (SAP, news, msgs), which pushed the stock down 7.8%, and a surprise rate increase by the Bank of England. While the dollar was lower against the pound, it was higher against the euro and the Japanese yen.
Twenty-five of the 30 Dow stocks were higher on the day, along with 381 stocks in the S&P 500 and 73 stocks in the Nasdaq-100.
The word in the oil pits: 'Sell'
Crude oil, meanwhile, was down to 3.8% to $51.90, the lowest close since May 31, 2005, CNBC's Bertha Coombs said.The price is falling because forecasts suggest winter weather in the Midwest and Northeast will continue to be relatively warm. "Traders are simply betting the price will go down," said Phil Flynn of Alaron Futures.
The crude oil drop has been slamming energy stocks since the beginning of the year. ConocoPhillips (COP, news, msgs) fell 4.2% and has fallen more than 15% in the last month. Hornbeck Offshore Services (HOS, news, msgs), which cut its earnings guidance late yesterday, fell 22%.
But airlines, sensitive to changing oil prices, are soaring, as they have been since oil prices peaked last July. The Amex Airline Index ($XAL.X) was up more than 3.1% today and has jumped nearly 44% since hitting a bottom on Aug. 11, 2006.
American Airlines parent AMR Corp. (AMR, news, msgs) jumped nearly 5.4% at $37.93. The stock is up nearly 25% so far in January. Southwest Airlines (LUV, news, msgs) was up only 0.4% today at $16.11 is up and 5.1% on the month. Southwest's policy of hedging fuel supplies is hurting the stock. The hedging protected the airline when oil prices jumped but doesn't let the airline benefit as much when oil prices fall.
Because of falling prices, the Organization of Petroleum Exporting Countries will start a 500,000-barrel-a-day cut in output earlier than it had planned in a move to stop the price decline, Qatar's oil minister told Bloomberg News.
Abdulla bin Hamad al-Attiyah told Bloomberg that he had instructed OPEC to start the cuts immediately.
Video on MSN Money: Oil price plunge? Don't blame the weather
Crude prices are falling, but they're not alone; commodities are broadly selling off. MSN Money's Jim Jubak sees three possible explanations. None, however, is particularly good news for the stock market. Click here to play the video.
OPEC said current oil prices are "unacceptable," as they have fallen nearly 34% since reaching a high of $78.40 a barrel last July.
- MSN Money columnist Robert Walberg discusses why Southwest shares are lagging.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Crude oil (NYMEX) (per barrel) | $51.88 | $54.02 | -$2.14 | -15.02% | -15.02% |
Heating oil (per gallon) | $1.4804 | $1.5255 | -$0.0451 | -7.35% | -7.35% |
Natural gas (per million BTU) | $6.2920 | $6.7550 | -$0.4630 | -0.11% | -0.11% |
Unleaded gasoline (per gallon) | $1.3905 | $1.4292 | -$0.0387 | -13.21% | -13.21% |
As energy fades, techs are the winners -- for now
There's little question that technology stocks still appear to be the biggest beneficiaries of the cash now being sucked out of the energy sector. And it was true today, despite SAP's warning.Software giant Microsoft (MSFT, news, msgs) led the Dow with a 3.6% gain to $30.70. Chip giant Intel (INTC, news, msgs) was the second-best Dow performer, up nearly 1.9%. The Morgan Stanley High-Technology 35 Index ($MSH.X) was up 0.2% this afternoon after SAP warned. (Microsoft is the publisher of MSN Money.)
SAP said it wouldn't meet its 2006 software license sales goals because of a slowdown in the key United States and Asian markets. The company didn't say why growth in those markets basically stalled in the fourth quarter.
Four tech sectors are among the top 10 indexes tracked by Market Dispatches: computer hardware, Internet, semiconductors and networkers. Add to that biotechnology.
Tech mutual fund managers say the sector has long legs.
"There’s skepticism about the economy, but we believe growth fears are discounted in today’s valuation levels, and fundamentals remain solid," Dave Carlsen, manager of Buffalo Science & Technology Fund (BUFTX), told MSN Money columnist Tim Middleton.
| Index | Jan. gain |
|---|---|
Amex Airline Index | 10.77% |
Amex Securities/Broker Dealer index | 5.18% |
Nasdaq-100 Index | 4.44% |
Amex Computer Hardware Index | 4.40% |
Amex Interactive Week Internet Index | 3.96% |
Philadelphia Semiconductor Index | 3.09% |
Dow Jones Transportation Index | 2.91% |
Nasdaq Composite Index | 2.88% |
Amex Networking Index | 2.81% |
Amex Biotechnology Index | 2.58% |
The British surprise with a rate increase
Futures started the day lower after the Bank of England raised interest rates a quarter-point today to 5.25%, the highest level in more than five years."It's a stunning move and will attract criticism," Steven Bell, an economist at hedge fund GLC in London, told Bloomberg News. Most economists had been expecting the bank to keep rates steady until next month, when its quarterly inflation report comes out.
The bank said inflation was 2.7%, above its desired 2% target level. The United Kingdom, Europe's second-biggest economy after Germany, is growing at its fastest pace in two years.
Another player may bid for Equity Office Properties
Hedge fund Cerberus Capital Management is reportedly considering a bid for real estate investment trust Equity Office Properties Trust (EOP, news, msgs), The Wall Street Journal reported today.A Cerberus bid would elbow in on a planned $20 billion deal that Equity made with the Blackstone Group on Nov. 19 because Cerberus would probably offer more for the REIT. Including an additional $16 billion in debt, the Blackstone deal was considered the biggest leveraged buyout ever.
- Video on MSN Money: Private equity bidding war?
Cerberus may not do the deal alone. A few names that have been rumored as possible co-investors include Vornado Realty Trust (VNO, news, msgs), Walton Street Capital and Starwood Capital.
More from MSN Money
The Cerberus consortium's bid is expected to be between $50 and $52 per share, above Blackstone's present offer of $48.50 per share.
Unlike the faltering residential real estate market, the commercial real estate sector seems robust. Office vacancy rates are tightening, and the original Blackstone deal would offer a significant premium compared with current rent rolls, the Journal noted. Equity Office Properties shares were up 1% to $49.26.
'Silly' Cisco, Apple says
Just days after Apple's (AAPL, news, msgs) long-awaited launch of its new cell phone, the company is already facing legal problems.Cisco Systems (CSCO, news, msgs), which owns the rights to the name "iPhone," is suing Apple, seeking an injunction to prevent the company from using the name for its new phone.
"We think Cisco's trademark lawsuit is silly," Apple spokeswoman Natalie Kerris said.
The market wasn't so sure. Apple shares were down 1.24%, to $95.80, on the news. Cisco was up slightly at $28.69.
The companies have been negotiating over a licensing agreement for some time, and news reports earlier this week suggested a deal was close. Not yet, anyway.
- Video on MSN Money: Cisco Sues Apple
"There is no doubt that Apple's new phone is very exciting," Cisco General Counsel Mark Chandler said in a prepared statement, "but they should not be using our trademark without our permission."
Cisco has owned the trademark on the name "iPhone" since 2000, when it acquired InfoGear Technology, which originally registered the name. Three weeks ago, Cisco's Linksys division put the trademark to use, releasing an Internet-enabled phone called "iPhone" that uses increasingly popular voice over Internet protocol, or VOIP.
EBay auctions for tickets
From corncob back scratchers to Britney Spears' chewed gum to a grilled cheese sandwich that resembles the Virgin Mary -- on eBay (EBAY, news, msgs), you can buy and sell almost anything.Now the online auction site is moving into the ticket world. Shares of EBay traded nearly 3.1% higher to $30.23 after confirming it is buying privately held ticket reseller StubHub for $310 million. StubHub is an online site where ticket holders can buy and sell tickets to concerts, sports events and shows.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
Treasurys | |||||
13-week Treasury bill | 4.965% | 4.950% | 0.015 | 1.64% | 1.64% |
5-year Treasury note yield | 4.724% | 4.671% | 0.053 | 0.49% | 0.49% |
10-year Treasury note yield | 4.737% | 4.682% | 0.055 | 0.57% | 0.57% |
30-year Treasury bond yield | 4.822% | 4.770% | 0.052 | 0.08% | 0.08% |
Currencies | |||||
U.S. Dollar Index | 85.09 | 84.85 | 0.24 | 1.99% | 1.99% |
British pound in dollars | $1.946 | $1.933 | 0.012 | -0.72% | -0.72% |
Dollar in British pounds | £0.514 | £0.517 | -0.003 | 0.73% | 0.73% |
Euro in dollars | 1.291 | 1.294 | -0.003 | -2.18% | -2.18% |
Dollar in euros | € 0.7745 | € 0.7725 | 0.002 | 2.23% | 2.23% |
Dollar in yen | 120.42 | 119.59 | 0.83 | 1.18% | 1.18% |
Commodities | |||||
Gold | $613.90 | $613.40 | $0.50 | -3.78% | -3.78% |
Copper | $2.6590 | $2.6640 | -$0.01 | -7.38% | -7.38% |
Silver | $12.4600 | $12.5950 | -$0.14 | -3.67% | -3.67% |
Crude oil (NYMEX) (per barrel) | $51.88 | $54.02 | -$2.14 | -15.02% | -15.02% |
AirTran increases bid for Midwest
One day after Midwest Air Group (MEH, news, msgs) said it would increase capacity by 15% this year in a move to bolster its independence as a stand-alone company, AirTran Holdings (AAI, news, msgs) increased its bid for Midwest. AirTran is now offering $345 million for Midwest, 18% more than a $290 million bid Midwest rejected last month.Stock Charts (Year)
Midwest Air Group
Yesterday, US Airways Group (LCC, news, msgs) increased its bid for bankrupt Delta Air Lines (DALRQ, news, msgs) to $10.2 billion from $8 billion.
Genentech profit soars
Shares of biotech company Genentech (DNA, news, msgs) rose nearly 4.4% to $87.40 today, after it reported earnings per share of $2.23 for 2006, excluding charges, up 74% from 2005.Genentech reported after the close yesterday. With charges, the company said earnings were $1.97 per share.
Excluding charges, Genentech earned 61 cents per share for the fourth quarter, beating analysts' estimates of 55 cents per share.
Sales for the year totaled $7.6 billion, an increase of 36%, thanks to strong sales for its cancer drugs.
"With $5 billion in oncology sales, we are now No. 1 in the U.S. for both sales and service," Executive Vice President Ian Clark told analysts on a company webcast.
Genentech's lead drug, Rituxan, is a treatment for non-Hodgkin's lymphoma and rheumatoid arthritis. Sales of Rituxan increased 13% in 2006, rising above $2 billion.
Home Depot group says no to Nardelli payout
An exit package of $210 million sure seemed like a sweet deal.That's what former CEO Bob Nardelli received when he was pushed out of Home Depot (HD, news, msgs) last week. And Home Depot shareholders were not pleased. One group of shareholders decided to do something about it, requesting a temporary restraining order to keep the home-improvement retailer from paying Nardelli any more of his severance package.
The restraining-order request was part of a previously filed lawsuit charging that the company had overpaid its top executives.
Nardelli became CEO in 2000 and had been criticized by investors for the company's lagging stock price. Shares of Home Depot had lost 7% since December 2000, when he became CEO. Home Depot was up 0.75% to $40.08 today.
By Charley Blaine and Elizabeth Strott
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