4-Day Rally on Wall Street; Oil Rebounds, Retailers Struggle

Bikram Pandey
04 Oct, 2012
New York City

Stocks on Wall Street traded higher after jobless claims rose less than expected and factory orders fell less than anticipated. However, same store sales increase last month was the second weakest in the year. Crude oil surged on mid-east tensions and coal miners advanced.

[R]3:55 PM New York – Stocks on Wall Street traded higher after jobless claims rose less than expected and factory orders fell less than anticipated. However, same store sales increase last month was the second weakest in the year. Crude oil surged on mid-east tensions and coal miners advanced.[/R]

U.S. indexes held ground and gained further after a choppy session and resource sector companies were in focus.

Stocks gained ground at the opening after weekly jobless claims gained less than expected last week and August factory orders fell less than expected 5.2%.

The indexes were also supported by a rise in energy companies after crude oil rebounded on the rising tensions in the Middle East and Turkey approve more military strikes in Syria. The immediate futures of crude oil jumped more than 4%.

Coal mining companies also surged after the Presidential candidate Mitt Romney appeared to make headway with voters after his feisty performance in the first of three Presidential debates last night. Romney appeared to favor less regulation for oil exploration and coal mining companies.

Peabody Energy Corp ((BTU)) soared 4.8%, Consol Energy Inc ((CNX)) added 5.6% and Alpha Natural Resources Inc ((ANR)) advanced 6.5%.

In deal news, Ocwen Financial agreed to acquire Homeward Residential Holdings for $750 million. Calpine agreed to purchase Bosque Power Plant for $432 million.

Retailers reported same store sales growth slowed down considerably in September from the previous two months. Monthly sales growth declined to 0.8% at 19 companies tracked by Ticker research team, our sister publication.

Same store sales increased to 3.6% when drug store data were excluded in the monthly calculation as consumers held back after spending more than anticipated in the back-to-school season.

Sales at Macy’s ((M)) increased 2.5% and at Target ((TGT)) gained 2.1% and luxury retailer Nordstrom ((JWN)) said sales increased 4.4%. However, sales at department store Kohl’s ((KOH)) decreased 2.7% but the company reaffirmed its quarterly outlook.

Sales at Gap Inc ((GPS)) increased 6% and Limited Brands ((LTD)) rose 5%.

Fed policy makers’ minutes of latest meeting held of Sept 12-13 were nearly united in their belief that the economy needs help and the central bank has the ability to provide it.

The minutes released today showed that all but one member agreed that the outlook for economic activity and inflation “called for additional monetary accommodation” and participants were specifically concerned about the high unemployment rate.

UK based Pearson, publisher of Financial Times said its chief executive Marjorie Scardino has decided to step down after 16 years at the end of the year. John Fallon will succeed her and joined the board as of today.

The move sparked speculation that Financial Times may be put on the block and the company will focus on its core educational products.

The European indexes traded mixed after the ECB and the BoE held rates. Spain raised €4 billion at higher rates. Portugal announced fresh austerity measures. UK home prices fell and German construction activity eased in September.

Deutsche Telekom agreed to merge its U.S. wireless unit with MetroPCS. Gerresheimer quarterly earnings fell 25%. BG Group agreed to sell majority stake in India-based Gujarat Gas for $470 million. EDF plans to hire 6,000 to payroll.

Commodities, Bonds and Currencies

The yield on 10-year bond increased to 1.65% and on 30-year bond rose to 2.85%.

The U.S. dollar inched lower to $1.301 to a euro and decreased against the Japanese yen to 78.45 yen.

Immediate delivery futures of Texas crude oil rebounded $3.40 to $91.54 a barrel and Brent crude rose $4.02 to $112.17, futures of natural gas increased 0.03 cents to $3.42 per mbtu and gasoline price traded higher 3.4 cents to 293.22 cents a gallon.

In metals trading, copper increased 0.20 cents to $3.78 per pound, gold increased $12.80 to $1,792.60 per ounce and silver increased 30 cents to $34.99.