logo-loader

Dow jumps over 2% amid broad rally

Published: 20:30 23 Aug 2011 BST

no_picture_pai

Stocks rallied broadly following Monday’s gains, shrugging off sobering economic data. July new home sales fell to their lowest levels in five months to a seasonally adjusted 298,000 units annually. The Richmond Fed’s regional manufacturing survey showed central Atlantic economic activity declined sharply in August.

Instead, traders took solace in positive European and China economic data, awaiting a speech from Federal Reserve Chairman Ben Bernake this Friday.

As of near market close, the Dow was up 270 to 11,125, the Nasdaq rose 90 to 2,436, and the S&P 500 climbed 33 to 1,156.

Gold for December delivery fell $11.20 to $1,880.70 an ounce after hitting $1,917.90 – another record. Many investors expect a correction in the near-term after its 32% increase this year. Regardless, UBS raised its three-month price target to $2,100 an ounce.

General Muammar Gaddafi’s rule is at an end. Hundreds of rebel fighters stormed his headquarter complex Tuesday in Tripoli, signaling the end to his four decade rule. Gaddafi’s whereabouts are unknown, though a source claims he remains in the capital. The Pentagon believes he is still in Libya, and remains a threat along with forces loyal to him. They are monitoring key weapons sites in the country. It is critical now for rebel forces to set aside their differences and form a stable government.

The Obama Administration released final plans Tuesday to cut hundreds of regulations, reducing red tape for businesses that could lead to $10 billion in savings over five years.

In the second quarter, China’s PC market surpassed the U.S. to become the world’s largest. China PC shipments reached 18.5 million units in the second quarter, besting 17.7 million units in the U.S. According to the IDC, the U.S. will maintain its lead for the year as a result of a surge in year-end holiday sales, but China will take over in 2012 with an estimated 85.1 million units compared to 76.5 million units for the U.S. Sales in China have been fueled by a growing middle class, corporate demand, and government spending.

Deven Sharma, President of ratings firm Standard & Poor’s (NYSE:MHP) is stepping down as of September 12, to be succeeded by Douglas Peterson, Chief Operating Officer of Citibank, a unit of Citigroup (NYSE:C). Sharma had planned his departure since the beginning of the year, seeking new challenges. Rather than running a division, Sharma is interested in possibly heading an entire company.

Nursing home drug provider Omnicare Inc. (NYSE:OCR) made a $441 bid for PharMerica Corp. (NYSE:PMC) The $15 a share deal offers a $37% premium over PharMerica’s Monday closing price. Omnicare has been turned down twice in the past month by PharMerica and says it is willing to take this offer directly to shareholders. PharMerica provides pharmacy services in the long-term care setting; the combination would help Omnicare build up its drug distribution business.

Bayer AG (OTC:BAYRY.PK) shares jumped Tuesday when the FDA designated its novel prostate cancer drug, Alpharadin, for fast-track approval, cutting months from typical approval times and signaling acknowledgement by the FDA that Alpharadin may serve an important medical need. The pivotal trial of Alpharadin, developed with partner Algeta ASA (Oslo:ALGETA.OL), was stopped early due to overwhelming evidence of efficacy in improving overall survival. Analysts estimate the drug could have potential peak sales of $1.7 billion.

Bank of America Corp. (NYSE:BAC) shares continued their descent Tuesday, falling 4% as investors worried it would have to raise more capital. The bank’s stock hit its lowest level since March 2009 while cost to insure its debt against default jumped. The cost to insure $10 million of unsecured debt for five years rose to $435,000, or 435 basis points; the credit default swaps traded at only 386 basis points in March 2009.

Delta Air Lines (NYSE:DAL) is expected to place an order for 100 of Boeing Co.’s (NYSE:BA) 737-900 jets valued at $8 billion, to be announced later this week. The airline is seeking to reduce costs through more fuel efficient and lower maintenance planes. The Boeing 737 will be equipped with more fuel efficient engines in coming years.

Williams-Sonoma (NYSE:WSM) reported a 28% earnings increase for the second quarter ending July 31. Profits rose to $39.3 million from $30.8 million the previous year as revenue gained 5.1% to $814.8 million. Gross margins inched up to 37.9% from 37%. Williams-Sonoma includes its namesake brand, Pottery Barn’s, and West Elm. The company raised its full-year outlook to $2.17 to $2.22 a share from $2.13 to $2.21 a share.

FTSE rises ahead of Easter weekend, JD Sport gains on upbeat outlook -...

The FTSE 100 gained on the final morning of this shortened Easter trading week. Festive cheer was limited though, as Thames Water confirmed shareholders would not provide it with a £500 million rescue package, prompting speculation over the London supplier’s future. On a more positive...

1 hour, 23 minutes ago