FOX Business: The Power to Prosper
Overcoming a wave of selling in the previously hot commodities complex, Wall Street closed mixed but well off its lows on Tuesday amid enthusiasm for the latest signs the Federal Reserve has no plans to alter its $600 billion bond buying program.
The Dow Jones Industrial Average rose 20.43 points, or 0.18%, to 11691.18, the Standard & Poor's 500 slid 1.69 points, or 0.13%, to 1270.20 and the Nasdaq Composite lost 10.27 points, or 0.38%, to 2681.25. The FOX 50 added 2.19 points, or 0.24%, to 910.85.
By shaking off a midday commodities-fueled selloff and building on Monday's 93-point rally, the blue chips landed at their highest level since August 2008 -- the month before Lehman Brothers imploded.
“Considering the run we had in December and yesterday’s very strong rally you would have thought the market would want to give something back,” said Peter Kenny, managing director at Knight Capital Group.
Wall Street appeared to be poised to give back some of their recent gains as technical factors and a stronger U.S. dollar sent crude oil tumbling below $90 a barrel and gold to its steepest one-day plunge in six months.
“We've been way overextended and a pullback was destined to come without any specific reason for it,” said Michael James, managing director of equity trading at Wedbush Securities, citing the "unrelenting bullish move throughout December."
Yet most Dow stocks managed to close in the green, led by Alcoa (NYSE:AA) and Walt Disney (NYSE:DIS). The index's laggards were McDonald's (NYSE:MCD) and Coca-Cola (NYSE:KO).
The Nasdaq Composite backed away from its highest close since December 2007 as tech stocks like Autodesk (NASDAQ:ADSK) and Oracle (NASDAQ:ORCL) retreated.
U.S. markets bounced off their lows after the Federal Reserve released the minutes from last month's policy meeting. The minutes showed the central bank didn't feel recent improvements in the economy warranted a change in its $600 billion program, known as "QE2." In fact, some Fed officials saw a "fairly high" threshold for any changes to the controversial program.
Policy makers were more bullish on the economy, noting a gradual pickup in growth and decreasing risk of a paralyzing deflationary spiral.
Earlier in the day Wall Street was weighed down by the weakness in commodities. Hitting energy stocks like Schlumberger (NYSE:SLB) and Valero (NYSE:VLO), crude oil suffered its worst day since mid-November, diving $2.17 a barrel, or 2.37%, to $89.38.
The basic materials sector, led by stocks like AK Steel (NYSE:AKS) and Rio Tinto (NYSE:RIO), declined almost 1%. Gold posted its steepest decline since February, plunging $44.10 an ounce, or 3.10%, to $1,378.50.
Stocks and commodities were also held back by the dollar, which rallied well off its lows in the wake of a surprise rise in U.S. factory orders. The Commerce Department said. factory orders jumped 0.7% in November, compared with forecasts for a drop of 0.1%. Excluding transportation, factory orders climbed 2.4%.
Meanwhile, U.S. auto makers released their strongest sales figures in 16 months, beating Wall Street's expectations. Overall, 2010 sales jumped 11% in 2010, ending a four-year slump.
General Motors (NYSE:GM) posted a 16% rise in December sales of its four core brands from the year before. Ford (NYSE:F) said its December retail sales jumped 17% from 2009, while Chrysler saw a 16% gain.
BP’s (NYSE:BP) stock headed north after the U.K.’s Daily Mail reported Royal Dutch Shell nearly pulled the trigger last year on a deal to snag BP during the massive Gulf of Mexico oil spill. While it backed off a takeover, Shell remains interested in a merger with BP and would likely make a counteroffer if one of its rivals makes a bid first.
Borders (NYSE:BPG) plunged 12.5% after the bookseller said a pair of its top execs have resigned and amid continued financial uncertainty. Borders said Thomas Carney, its general counsel, and D. Scott Laverty, chief information officer, have resigned.
Motorola Mobility (NYSE:MMI) and Motorola Solutions (NYSE:MSI) both rallied in their debuts following the long-anticipated split of 82-year-old electronics icon Motorola. Motorola Mobility contains its consumer-focused business like smartphones and Motorola Solutions holds handheld communication devices.
News Corp.’s (NASDAQ:NWSA) struggling social network Myspace is bracing for a “dramatic” downsizing that could eliminate between a third and a half of its 1,100-person workforce, The Wall Street Journal reported. Depending upon the results of the downsizing, News Corp. may look for buyers for Myspace, which it acquired in 2005 for $580 million, the Journal reported. However, there are no current sales talks. News Corp. is the parent of both the Journal and FOX Business.
Morgan Stanley (NYSE:MS) named strategy head Jim Rosenthal as its new chief operating officer, the Journal reported. Rosenthal will replace Tom Nides, who left to become a top deputy to Secretary of State Hillary Clinton.
Microsoft (NASDAQ:MSFT) exec Charles Songhurst, one of its top M&A and strategy execs and a favorite of CEO Steve Ballmer, plans to depart the software giant for a new opportunity, AllThingsDigital reported. Fritz Lanman, a senior director of corporate strategy and acquisitions, is also leaving to start a start-up.
Germany's DAX fell 0.21% to 6975.35, France's CAC 40 leaped 0.39% to 3916.03 and the U.K.'s FTSE 100 soared 1.93% to 6013.87.
In Asia, Japan's Nikkei 225 rallied 1.65% to 10398.10, Hong Kong's Hang Seng climbed 0.99% to 23688.50 and China's Shanghai Composite jumped 1.59% to 2852.65.