YAHOO [BRIEFING.COM]: Broad
buying in light volume gave stocks strong gains, but the effort failed to take
stocks through a key resistance level.
Stocks sported robust gains
for the entire session. Though they finished with their best percentage gain in
two weeks, strength actually faded into the close. The late drift came after
the S&P 500 failed to penetrate the 1100 line. It did manage to close
firmly above its 50-day moving average of 1088, however.
The advance was helped along
by news that BHP Billiton (BHP 70.21, -1.73) proposed to
acquire Potash (POT 143.17, +31.02) for $130 per share. Potash
refused the offer, but news of such a large-scale takeover attempt provided
participants with a tacit sign of improved sentiment and prospects across the
corporate landscape, especially in the agricultural and basic materials space.
In turn, materials stocks led the broader market for the entire session and
finished a 2.3% gain.
Retailers were also strong. As
a group retailers climbed 1.8%. Discount retail giant and Dow component Wal-Mart
(WMT 51.02, +0.61) was a solid performer on the back of in-line earnings and an
improved forecast.
Home improvement retailer and
fellow Dow component Home Depot (HD 28.31, +0.93) had a more
positive influence over retailers. It posted better-than-expected earnings for
the latest quarter, but issued a rather mixed forecast. A smaller-than-expected
increase in housing starts during July didn't do anything to derail the stock
this session.
Housing starts for July
increased 1.7% month-over-month to an annualized rate of 546,000 units, which
is less than the rate of 555,000 units that had been widely anticipated.
Building permits for July fell 3.1% month-over-month to an annualized rate of
565,000, which is below the rate of 573,000 that had been expected.
As for other data, the
Producer Price Index for July increased 0.2%, as expected. Excluding food and
energy, producer prices for July increased 0.3% month-over-month, but a 0.1%
increase had been expected.
Lastly, industrial production
increased 1.0% in July. It had been to rise by 0.6%.
Though there was plenty of
important data for participants to digest this session, it did not have much of
a meaningful impact on trade. That contrasts sharply with action of previous
weeks, when data had been a primary catalyst behind trade and corporate
announcements, including earnings, were of secondary concern.
Commodities were stronger
actors the board today, as every group in the CRB Commodity Index closing in
positive territory.
Sept crude oil closed higher
by 0.7% to $75.77 per barrel, snapping its 5-session sell off. Strength in the
equity markets helped crude oil higher today. Sept natural gas ended up 0.8% to
$4.27 per MMBtu.
Dec gold futures settled
higher by 0.1% to $1228.30 per ounce, while Sept silver futures closed up 0.7%
to $18.59 per ounce.
Consistent with recent weeks,
trading volume remains unimpressive. More directly, share volume on the NYSE
failed to break 1 billion shares for the third straight session, keeping with
the 15-session average of just 984 million shares.
Advancing Sectors: Materials (+2.3%), Industrials (+1.8%),
Energy (+1.5%), Consumer Discretionary (+1.5%), Health Care (+1.3%), Telecom
(+1.2%), Tech (+1.1%), Utilities (+0.9%), Consumer Staples (+0.8%), Financials
(+0.7%)
Declining Sectors: (None)DJ30 +103.84 NASDAQ +27.57 NQ100
+1.3% R2K +1.8% SP400 +1.7% SP500 +13.16 NASDAQ Adv/Vol/Dec 1981/1.76 bln/653
NYSE Adv/Vol/Dec 2388/980 mln/638