Nasdaq at 10-Year High; S&P Races Ahead

Bikram Pandey
16 Feb, 2012
New York City

U.S. stocks advanced and popular indexes reached near highs of the decade after the latest data on manufacturing, housing and jobless claims stoked enthusiasm. Investors also noted willingness of the European Central Bank and Germany to push through Greek bailout at the next meeting next week.

[R]5:10 PM New York – U.S. stocks advanced and popular indexes reached near highs of the decade after the latest data on manufacturing, housing and jobless claims stoked enthusiasm. Investors also noted willingness of the European Central Bank and Germany to push through Greek bailout at the next meeting next week. Oil traded above $102 a barrel.[/R]

U.S. stocks traded higher after investors focused on domestic economic data and overlooked gathering storms in Europe. S&P 500 index and the Nasdaq are inching closer to the highs of the last decade as the market extends six-month rally.

The growing optimism in the market is rooted in the latest string of data from the weekly jobless claims, manufacturing growth, auto sales and stable unemployment rate. The landscape is still littered with low new job creations and several more millions of people unemployed before the onset of the recession and housing market shows no end in sight of the deep freeze.

However, corporate earnings have generally held up in the last five quarters despite the banks’ reluctance to lend to consumers and home buyers.

The rally was stoked in the afternoon after European Central Bank officials indicated that the central bank is willing to participate in a complex scheme to distribute the gains in Greek bonds to member nations.

In addition, German officials also confirmed that Germany is likely to push for the release of bailout funds for Greece at the next meeting on February 20.

In earnings news, Apache fourth quarter net surged to $1.17 billion. ABB fourth quarter net increased 19% to $830 million. Devon Energy fourth quarter net declined to $507 million. General Motors fourth quarter net was flat at $500 million. V.F. Corp. fourth quarter net surged to $257.3 million.

European markets eased on the renewed worries linked to Greek bailout and fresh downward view on European banks from a credit opinion firm. Fraport AG, the operator of Frankfurt airport faces a union strike that may cancel 10% of flights as early as today.

The Nikkei index in Japan closed lower as Greek negotiations drag on and oil prices rise. However, metals and other commodities edged lower. Three former executives of Olympus were arrested by Tokyo police for the accounting scandal.

Australian stocks faced selling pressure after Westpac Bank reported weaker than anticipated earnings. Investors took the latest monthly decline in unemployment in stride. Weak copper prices also dragged resource sector. Wesfarmers reported flat net income growth.

Commodities, Bonds and Currencies

The yield on 10-year U.S. bond increased to 1.98% and 30-year bond advanced to 3.14%.

The U.S. dollar traded down 0.5% to $1.313 to one euro and edged down against the Japanese yen at 78.90.

Immediate delivery futures of Texas crude oil rose 50 cents to $102.30 a barrel and futures of natural gas added 14 cents to $2.56 per mbtu and gasoline price increased 3.2 cents to 303.90 cents a gallon.

In metals trading, copper increased 0.60 cents to $3.81 per pound, gold increased $2.10 to $1,730.20 per ounce and silver increased 11 cents to $33.52.