Wall Street in 3-Day Rally, Earnings Dominate Sentiment

Bikram Pandey
07 Aug, 2012
New York City

U.S. stocks traded higher for the third day in a row and earnings dominated trading. Knight Capital rebounded from 7% decline after it arranged emergency financing at a steep discount. MGM Resorts, Sirius XM Radio and Tower International gained on earnings.

[R]4:55 PM New York – U.S. stocks traded higher for the third day in a row and earnings dominated trading. Knight Capital rebounded from 7% decline after it arranged emergency financing at a steep discount. MGM Resorts, Sirius XM Radio and Tower International gained on earnings.[/R]

U.S. indexes extended gains in the third day on the hopes that central banks on both sides of the Atlantic are readying a plan to boost economic growth.

On the deal front, Kinder Morgan Energy acquired interest in U.S. pipeline assets for $6.2 billion and Campbell Soup Co completed the acquisition of the juice maker Bolthouse for $1.55 billion.

In the earnings news, MGM Resorts International jumped more than 7% after the company reported smaller than expected loss after including the results of its China based subsidiary.

The largest independent petroleum refiner Tesoro Corp gained 5% on the speculation that wholesale gasoline prices may higher after a fire at a Chevron controlled plant in California.

Leap Wireless International Inc plunged 19% after the wireless carrier said its net subscriber loss tripled last quarter.

BroadSoft Inc soared by a third after the telecom software developer lifted its annual earnings outlook and announced a plan to acquire Adaption Technologies Ventures Ltd.

In Europe, Italian economy extended the decline for the fourth quarter in a row and German factory orders fell 1.7%, more than estimated in June. The UK retail sales rose unexpectedly in July. Standard Chartered plunged 22% on money laundering charges.

Stocks in Tokyo advanced for the second day in a row in lock steps with the world markets ahead of the announcements from the Bank of Japan and economic releases from China. A glitch in futures market affected trading.

Australian stocks extended gains for the second despite weak earnings from Transurban, Cochlear and Leighton. Mining equipment maker Bradken reported higher than expected earnings on strong demand.

Commodities, Bonds and Currencies

The yield on 10-year bond traded higher to 1.62% and on 30-year bond edged higher to 2.72%.

The U.S. dollar inched lower to $1.2399 to a euro and increased against the Japanese yen to 78.64 yen.

Immediate delivery futures of Texas crude oil increased $1.26 to $93.40 a barrel and Brent crude added $2.34 to $111.89, futures of natural gas increased 6 cents to $2.96 per mbtu and gasoline price increased 6.6 cents to 298.80 cents a gallon.

In metals trading, copper increased 4.4 cents to $3.43 per pound, gold fell $1.50 to $1,614.70 per ounce and silver added 19 cents to $28.02.