U.S. Stocks Recover, Apple Surpasses Record Microsoft Market Cap

Bikram Pandey
20 Aug, 2012
New York City

U.S. stocks traded sideways after investors turned cautious on stretched valuations. European leaders kicked off another round of talks to renegotiate Greek bailout terms and the distribution process for Spain. Retail gasoline prices gained as summer demand stayed near peak.

[R]4:15 PM New York – U.S. stocks traded sideways after investors turned cautious on stretched valuations. European leaders kicked off another round of talks to renegotiate Greek bailout terms and the distribution process for Spain. Retail gasoline prices gained as summer demand stayed near peak.[/R]

Stocks on Wall Street drifted as six-week long rally in market indexes stretched valuations. Also, investors were on the defensive ahead of the another round of European leaders meeting this week that may decide the fate of Greek bailout terms.

On merger Monday, Aetna agreed to acquire Coventry Health Care for $7.3 billion, including debt. FMC agreed to buy Pure Energy Services for $285 million. Kinder Morgan Energy Partners agreed to sell its Rockies assets for $3.3 billion.

Among earnings, for-profit college operator, Corinthian Colleges Inc declined more than 4% after it estimated fiscal first quarter profit of no more than $405 million. Home improvement retailer Lowe’s Cos dropped 6% after it estimated flat sales for the year and said comparables sales fell in the latest quarter.

Apple Inc soared 2.2% to a new high above $664 a share on a speculation that the company is ready to release its new version of popular mobile phone and a tablet.

Apple’s market cap at $623.1 billion surpassed the previous record market value of Microsoft Corp of $611 billion when the stock closed $59.56 with 10.45 billion shares outstanding on December 27, 1999 of all listed companies on the U.S. based exchanges, according to 123jump.com research team.

The European indexes rose and the ECB may set yield limits for sovereign bonds. Construction output in the euro zone fell in June. UK home prices slumped in August. Heineken raised its offer to acquire Fraser & Neave's stake in Asia Pacific Breweries.

Stocks in Japan traded mixed and domestic economy linked companies were favoured in thin trading. Home prices in China gained, dashing any hopes of additional government stimulus. The discount retailer Don Quijote surged 5% on higher estimated earnings.

Australian stocks closed lower and investors focused on defensive stocks ahead of meetings of European leaders later in the week. Telstra and CBA traded ex-dividend. Bendigo and Adelaide Bank said annual net dropped 43%.

Commodities, Bonds and Currencies

The yield on 10-year bond traded higher to 1.82% and on 30-year bond eased to 2.93%.

The U.S. dollar inched higher to $1.234 to a euro and increased against the Japanese yen to 79.41 yen.

Immediate delivery futures of Texas crude oil decreased 19 cents to $95.84 a barrel and Brent crude fell 15 cents to $113.56, futures of natural gas rose 5 cents to $2.77 per mbtu and gasoline price edged up 0.27 cents to 302.98 cents a gallon.

In metals trading, copper decreased 4.5 cents to $3.38 per pound, gold added $4 to $1,623.40 per ounce and silver increased 75 cent to $28.83.