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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.633720 |
| Euro to US Dollar | 1.398406 |
| Japanese Yen to US Dollar | 0.010414 |
| Canadian Dollar to US Dollar | 0.861846 |
In a day for the record books, the Dow Jones Industrial Average and the Standard & Poor's 500 Index both set new highs as merger news and generally stronger-than-expected reports of retail sales stoked investor giddiness.
The Dow crossed 13,800 for the first time as it jumped 284 points, or 2.1%, to just under 13,862. That was the biggest percentage gain since October 2003 and the largest one-day point gain since Oct. 15, 2002. All 30 stocks in the index were higher.
The S&P 500 rose 1.9% to 1,547.70, topping its best close of 1,539.18 set on June 4. Its point gain was its biggest single-day change since March 2003. A total of 459 of the 500 stocks in the index finished with gains.
The Nasdaq Composite was up nearly 50 points, or 1.9%, to just under 2,702, its best close since Feb. 1, 2001, when it ended at nearly 2,783. Technology stocks have been especially strong in recent weeks.
Chip giant Intel (INTC, news, msgs), whose prospects seem to be improving, was up more than 5.8% to $26, second-best among Dow stocks and tops among the 19 stocks in the Philadelphia Semiconductor Index ($SOX.X). The chip index was up 2.9% to 531.
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The rally began when retailers released their reports on June sales, and the momentum forced many short sellers to cover their positions, adding to the market's upward momentum.
Today's gains mirrored a rally that began roughly a year ago and fanned talk the Dow will hit 15,000 or even 16,000 this year.
British mining giant Rio Tinto's (RTP, news, msgs) $101-a-share, $38 billion bid for Canadian aluminum maker Alcan (AL, news, msgs), a $10 billion premium over a bid from Alcoa (AA, news, msgs), was the big news. Alcan was up about 10% on the day to $98.45. Alcoa withdrew its bid Thursday night after the stock had jumped 6.7% to $45.29, the biggest percentage gain among Dow stocks.
Many investors now believe the U.S. aluminum giant is itself now a takeover candidate. Australian mining company BHP Billiton (BHP, news, msgs) is said to be the likeliest acquirer.
Alcoa CEO Alain Belda said Rio Tinto's bid "strongly reinforces our view of the underlying value in the aluminum industry and its bright prospects for the future." But he said Alcoa has "more attractive options for delivering additional value to shareholders."
Whether that is as an independent company, however, remains to be seen.
The frenzy for metals and other materials stocks pushed the Select Sector SPDR Materials (XLB, news, msgs) exchange-traded fund up more than 2.5%, tops among ETFs based on the sectors of the S&P 500.
Global growth, a big theme in this year's market gains, was also a force today. Caterpillar (CAT, news, msgs) was up 2.3% to $84.09; Hewlett-Packard (HPQ, news, msgs) was up 3.7%.
Financial services stocks were recovering as well. American Express (AXP, news, msgs) added 23 points to the Dow, better than even Alcoa, after a Lehman Bros. analyst said greater international spending and the weak U.S. dollar will boost the stock, and raised his 2007 and 2008 estimates for the credit card issuer. The stock itself was up 5.1% to $63.33, third among the Dow stocks.
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The Standard & Poor's Banking Index ($BIX.X) was up 2.3% to 392; the Amex Securities Broker/Dealer ($XBD.X), among the weakest groups this year because of the subprime mortgage crisis, also moved 2.3% higher.
The gains came as crude oil slipped to $72.50 after jumping well above $73 earlier in the day. Stocks pulled money from bonds, forcing interest rates higher. The 10-year Treasury note was yielding 5.12% today, up from 5.08% Wednesday.
| Company | Ytd chg. | Company | Ytd chg. | Company | Ytd chg. |
|---|---|---|---|---|---|
| Alcoa | 50.9% | Hewlett-Packard | 15.0% | American Express | 4.4% |
| Caterpillar | 37.1% | Boeing | 13.4% | JPMorgan Chase | 2.6% |
| Honeywell Intl. | 33.6% | AT&T | 13.2% | Home Depot | 1.9% |
| Intel | 28.4% | Altria Group | 13.0% | Microsoft | 0.7% |
| General Motors | 22.2% | IBM | 12.5% | Pfizer | 0.3% |
| United Technologies | 18.3% | Verizon | 11.3% | Walt Disney Co. | -0.1% |
| Exxon Mobil | 17.0% | Coca-Cola | 9.1% | Procter & Gamble | -2.1% |
| McDonald's | 16.5% | Wal-Mart Stores | 5.7% | American Int. Group | -3.3% |
| Merck | 16.4% | DuPont | 5.7% | Johnson & Johnson | -4.0% |
| 3M | 15.4% | General Electric | 4.6% | Citigroup | -5.1% |
A big relief rally for retailers
Retailers, meanwhile, had a lovely day, thanks to the June sales reports that were better than expected. In fact, only yesterday, CNBC reported that the whispering on Wall Street was that the sales reports were going to be awful.The Standard & Poor's Retail Index ($RLX.X) was up 2.35% to 527.
Stock Charts (Year)
Abercrombie & Fitch
Wal-Mart Stores
Retail giant Wal-Mart Stores (WMT, news, msgs) said sales rose 2.4% in June, above its expectation that sales would be no more than 2% or even flat. The company also said July's same-store sales -- sales at stores open at least a year -- would rise between 1% and 2%.
Shares of Wal-Mart were up 2.5% to $48.86.
Rival Target (TGT, news, msgs) was up 6.8% to $70.04, largely on a Bloomberg News report that activist investor William Ackman has accumulated a stake of more than 5% in the discount retailer.
The Bloomberg report cited "a person with direct knowledge of his plans." Ackman has been calling on the company to sell its credit card business.
Meanwhile, Target's June sales gain was 3.3%, about in line with its own forecast.
For retailers overall, the International Council of Shopping Centers predicted earlier that same-store sales for June would show a rise of 1.5% to 2%. Thomson Financial's forecast, which follows 52 retail chains, was for a rise of 1.8%, down from 3% in June 2006.
Excluding Wal-Mart, Thomson was predicting same-store sales for June to show an increase of 2.6%, down from 4.3% a year earlier.
Good news for Limited, Nordstrom; Macy's disappoints
Limited Brands (LTD, news, msgs) also reported better-than-expected same-store sales in June. The apparel company, which just announced plans to sell its namesake brand and focus on its Victoria's Secret lingerie chain, reported a 3% increase in sales at stores open at least one year. Analysts were looking for a rise of 2.8%. Shares were up slightly at $27.58.Nordstrom (JWN, news, msgs) said same-store sales rose 2% in June, above the 1.1% increase analysts had been expecting. Nordstrom also said it expects second-quarter same-store sales to rise to between 2% and 3%. Shares were up 1.5% to $48.94.
It wasn't all good news for retailers, however.
Shares of Macy's (M, news, msgs) tumbled 2.9% to $39.25 after the department-store giant said same-store sales fell 2.7% in June, worse than the 0.8% decline analysts had expected.
The company, which recently changed its name from Federated Department Stores, said July same-store sales would be flat to down 3%. Macy's also said second-quarter profit would be between 20 and 30 cents per share, down from a previous forecast of between 35 and 45 cents per shares.
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| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $72.50 | $72.56 | -$0.06 | 2.57% | 18.76% |
| Heating oil (per gallon) | $2.0957 | $2.1008 | -$0.0051 | 3.14% | 31.15% |
| Natural gas (per million BTU) | $6.4970 | $6.6000 | -$0.1030 | -4.08% | 3.14% |
| Unleaded gasoline (per gallon) | $2.2663 | $2.3063 | -$0.0400 | -1.22% | 41.46% |
Genentech's profit jumps
Biotechnology company Genentech (DNA, news, msgs) said yesterday after the close that it had earned $747 million, or 70 cents per share, in the second quarter. That's a 41% increase from the $531 million, or 49 cents per share, it earned in last year's second quarter.Excluding one-time items, the company earned 78 cents per share, above the consensus estimate of 72 cents per share.
Genentech, which makes multiple cancer treatments and other drugs, said full-year earnings would be between $2.85 and $2.95 per share, up from a previous estimate of $2.79 and $2.90 per share. Genentech shares fell 0.9% to $75.26.
Yum Brands' tasty earnings
Yum Brands (YUM, news, msgs), the parent of Taco Bell and KFC, also reported strong earnings yesterday after the close.The company earned $214 million, or 39 cents per share, for the second quarter, up nearly 12% from the $192 million, or 34 cents per share, the restaurant chain earned in last year's second quarter.
"Our mainland China business continues to generate strong top-line growth," CEO David Novak said in a news release. Yum Brands earned $65 million from its China stores, up 14% from a year ago.
The strong international growth helped propel Yum Brands to lift its 2007 profit outlook to $1.63 per share, in line with the consensus estimate.
The company's shares were down 0.5% to $34.23.
Motorola expects loss for quarter
Things are looking pretty grim for Motorola (MOT, news, msgs).The cell-phone and handset maker said it will miss its earnings forecast for the second quarter. Motorola now expects a loss of 2 to 4 cents per share, below the consensus estimate for a profit of 2 cents per share.
It's the third time the company has slashed its forecast so far this year; Motorola reported its first loss in three years in the first quarter.
Shares of Motorola were up 0.7% to 18.08 on the day.
The company also said sales for the second quarter would be between $8.6 billion and $8.7 billion, below its previous estimate of $9.4 billion. Analysts had been looking for sales of $9.25 billion.
Stock Charts (Year)
Motorola
Motorola has yet to come up with a strong follow-up to its snazzy Razr phone, which it introduced in mid-2004. It introduced the Razr2 in South Korea last month, though the company has yet to state how much the Razr2 will cost.
In May, Motorola announced 7,500 job cuts in an effort to turn things around.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 4.815% | 4.805% | 0.010 | 3.10% | -1.43% |
| 5-year Treasury note yield | 5.018% | 4.964% | 0.054 | 1.66% | 6.74% |
| 10-year Treasury note yield | 5.116% | 5.080% | 0.036 | 1.65% | 8.62% |
| 30-year Treasury bond yield | 5.211% | 5.183% | 0.028 | 1.66% | 8.16% |
| Currencies | |||||
| U.S. Dollar Index | 80.45 | 80.53 | -0.08 | -1.52% | -3.57% |
| British pound in dollars | $2.0300 | $2.0329 | -0.0029 | 0.93% | 3.59% |
| Dollar in British pounds | £0.4926 | £0.4919 | 0.0007 | -0.93% | -3.47% |
| Euro in dollars | 1.3793 | 1.3751 | 0.0042 | 1.77% | 4.50% |
| Dollar in euros | € 0.7250 | € 0.7272 | -0.0022 | -1.73% | -4.30% |
| Dollar in yen | ¥122.45 | ¥122.37 | 0.08 | -0.38% | 2.88% |
| Commodities | |||||
| Gold | $668.30 | $662.10 | $6.20 | 2.67% | 4.75% |
| Copper | $3.5810 | $3.5845 | -$0.003 | 3.78% | 24.73% |
| Silver | $13.1800 | $12.9750 | $0.21 | 5.67% | 1.89% |
| Crude oil (NYMEX) (per barrel) | $72.50 | $72.56 | -$0.06 | 2.57% | 18.76% |
By Charley Blaine and Elizabeth Strott
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