Here's What Happened In the Markets Today…
Stocks showed healthy gains the final day of May, headed into June with hopes that stocks’ ability to withstand the assault of weak economic data – in today’s case, the eighth straight monthly fall in home prices in large metro areas, a fall in the ISM-Chicago business barometer to its lowest reading since November, 2009, and a surprise reduction in consumer sentiment in May. Risk sentiment, fed by a weaker dollar as concerns of a Greek default lifted, as well as hopes that the weak macro posts might translate into additional Fed largesse, lifted shares, leaving stocks nicely higher for the session.
The DJIA finished 128 points higher, a 1% rise to 12,570 as the early morning rally’s mid-day swoon resumed its upward push into the close. The S&P500 gained 1.1% to close at 1345, its highest point of the session. The NASDAQ surged at day’s end to close up 1.4% at 2,835. May’s losses were pared by the day’s advance; however, the benchmarks still marked declines of 1.9% on the DJIA, 1.4% on the S&P500 and 1.3% on the NASDAQ.
Early morning data posts underscored the current perception that the recovery has hit a soft patch, stuttering in previously strong areas of manufacturing, the still-moribund housing sector and employment.
Today’s report from the S&P Case-Shiller 20-city index showed a 4.2% fall-off that left home prices at levels last seen in mid-2002, worse that 0.2% drop anticipated as well as the 0.2% decline in February. Some considered the underlying housing shares already cheap enough, however, and the Philadelphia Housing Sector Index ended 1.7% higher, at its best level in nearly a month.
The Chicago PMI fell to a lower-than-forecast 56.6 in May from 67.6 prior, well off estimates of 62.5
The Conference Board’s consumer sentiment index, expected to show an uptick to 66.5 from 65.4 prior, instead reported in with a drop to 60.8 in May.
Twenty-nine of the DJIA thirty finished higher Tuesday, led by Pfizer’s (NYSE:PFE) 2.5% increase, Cisco’s (NASDAQ:CSCO) 2.1% rise and Alcoa’s (NYSE:AA) 2% climb. McDonald’s (NYSE:MCD), the only falling star, eased 0.1% on news the firm plans a multimillion dollar “sorry” campaign for its bad-tasting coffee.
General Dynamics (NYSE:GD) topped the S&P500’s list of top performers, ending up 4.2% after a brokerage upgrade was followed with news of a $744 million US Navy contract, which included an option to up the contract to $1.3 billion.
Tech shares also pushed higher as the Philadelphia Semiconductor Index ended up 1.5%. MEMC Electronic Materials (NYSE:WFR) rose 4%, KLA-Tencor (NYSE:KLA) 3.6% and SanDisk (NASDAQ:SNDK) 3.2% to lead the S&P500 higher. Apple (NASDAQ:AAPL) shares gained 3.1% on reports that Steve Jobs plans to introduce Apple’s iCloud service at the Worldwide Developers Conference June 6. Intel (NASDAQ:INTC) advanced 1.4% after launching new mobile devices and Intel-powered tablets at the Computex trade show. Nokia (NYSE:NOK) shares plunged 14.4% after saying falling prices and rising competition would result in lower-than-expected second quarter sales and earnings, and eliminated 2011 forecasts.
Crude prices finished $2.11 higher, or up 2.1% at $102.70.
Gold prices, lacking safety bids, ended off $0.50 at $1536.80, although prices saw some support from the weaker US dollar.
