From Briefing.com: 4:30 pm : Thanks to a concerted, broad-based buying effort amid pleasing economic data, the S&P 500 climbed to fresh highs for 2009 and managed to close above its 200-day moving average for the first time since December 2007.
There wasn't any individual catalyst for the upward push, just pleasing economic data in the U.S. and abroad.
Personal spending for April declined a moderate 0.1%, which was better than expected and an improvement from the previous month, while personal income for April showed a surprise 0.5% increase in the face of loose labor conditions.
Construction spending for April also registered an unexpected increase by climbing 0.8% month-over-month.
The ISM Manufacturing Index for May came in at 42.8, which was largely in-line with expectations, but up from the prior month. Though the reading indicates manufacturing activity continues to contract, the pace of contraction is decelerating.
Meanwhile, upbeat PMI data in both China and Europe supported foreign indices, and even looped back to the U.S. to help extend the surge that U.S. stocks saw in the final hour of trading last week.
Given the impressive gains in the U.S. and abroad, the Dow Jones World Index climbed 2.6% Monday.
Retailers in the S&P 500 saw some of the best gains. They spiked 6.1%, which helped the consumer discretionary sector climb 4.6%. The sector was also helped by a 6.4% advance by automakers, even as General Motors (GM 0.75, +0.00) confirmed all previous suspicion by announcing that it will enter bankruptcy with the help of the U.S. government, which is investing $30 billion for a 60% stake in the company.
As a result of the filing, GM will lose its long-held position in the Dow. Cisco (CSCO 19.50, +1.00) will replace GM in the Dow Jones Industrial Average, effective June 8. In addition, Dow Jones announced that it will remove Citigroup (C 3.69, -0.03) from the average effective June 8, replacing it with Travelers (TRV 41.91, +1.25). Dow Jones said the large and ongoing government stake in Citigroup prompted the change.
Strength in blue-chips helped the Dow cut into its year-to-date loss, which now stands at less than 1%.
Industrial stocks climbed 4.7%, more than any other major sector. Tech tacked on 3.3%, helping the Nasdaq Composite outperform the other headline indices and close above its 200-day moving average for the fifth consecutive session.
The broad-based buying effort helped nine of the 10 major sectors in the S&P 500 finish higher. Telecom (-0.4%) was the only sector to finish lower, but financial stocks (+0.5%) and health care stocks (+0.5%) also lagged the broader market.
Commodities also logged an impressive session as the CRB Commodity Index spiked 3.1% to log its best single-session advance by percent in two months. It was helped along by rising crude oil prices, which logged another 2009 closing high by finishing pit trading 3.2% higher at $68.40 per barrel.
Treasuries were knocked around again. The benchmark 10-year Note shed 58 ticks, which pushed its yield up to 3.68%. The 10-year Note had been down more than two full points during the session.DJ30 +221.11 NASDAQ +54.35 NQ100 +2.9% R2K +3.9% SP400 +3.7% SP500 +23.73 NASDAQ Adv/Vol/Dec 2042/2.60 bln/647 NYSE Adv/Vol/Dec 2507/1.50 bln/568
4:16PM Altera reaffirms its prior revenue guidance for second quarter sales to be up 2-7% sequentially; current First Call consensus is for a 5% increase (ALTR) 17.66 +0.64 : Co reaffirms its prior revenue guidance for second quarter sales to be up 2-7% sequentially (First Call Consensus is for a 5% increase). As expected, demand from OEMs providing equipment for Asian 2G and 3G wireless networks remains strong. Altera's new products have been the company's growth drivers during the second quarter. Sales of the company's 65-nanometer devices are up sharply. As anticipated, sales of Altera's 40-nanometer devices are on track to double from first quarter levels as the company is now shipping its Stratix IV GX, Stratix IV GT, and Arria II GX FPGAs.
9:03AM SIA says April semiconductor sales increase month on month : Worldwide sales of semiconductors rose to $15.6 bln in April, an increase of 6.4% from March when sales were $14.7 billion, the Semiconductor Industry Association reported. April sales were 25% lower than April 2008 when sales were $20.9 billion. All sales numbers represent a three-month moving average of global semiconductor sales. "The better-than-expected 6.4 percent sequential increase in April sales was driven by moderate improvements in a number of end-demand drivers and inventory replenishment," said SIA President George Scalise. "The PC market - a major consumer of semiconductors - has been stronger than predicted earlier in the year. Consensus forecasts currently project that PC unit sales in 2009 will decline by about 6% compared to earlier forecasts of a decline in the range of 12%. Analysts are also more optimistic about cell phone unit sales, which are now projected to decline by around 7% compared to earlier forecasts of 15%. PCs and cell phones account for nearly 60% of all semiconductor consumption," Scalise stated... "Visibility remains limited," Scalise continued. "Two consecutive months of sequential sales growth may be an indication of a return to more normal seasonal sales patterns in some market sectors, albeit at lower sales levels than last year," Scalise concluded.
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