FOX Business: The Power to Prosper
Capping off their best January since 1997, the blue chips landed solidly in the green on Monday as Wall Street’s Egyptian fears ebbed a bit.and rallying crude oil and ExxonMobil’s blockbuster results fueled a wave of buying in the energy sector.
The Dow Jones Industrial Average jumped 68.23 points, or 0.58%, to 11891.93, the Standard & Poor's 500 gained 9.78 points, or 0.77%, to 1286.12 and the Nasdaq Composite rose 13.19 points, or 0.49%, to 2700.08. The FOX 50 added 4.78 points, or 0.52%, to 916.34.
Monday's gains allowed Wall Street to recover some of the ground lost on Friday, when the Dow plunged 166 points in response to fears about the chaos in Cairo and disappointing earnings reports from Amazon.com (NASDAQ:AMZN) and others.
The better mood on Wall Street is “reflecting a notching down of fears about Egypt,” said Nick Kalivas, vice president of financial research at MF Global. “The Suez Canal is open. The world hasn’t really gotten worse.”
However, crude oil, a good barometer for concerns about Egypt, rode an afternoon wave of buying to close north of $92 a barrel at levels unseen in more than two years.
Still, Monday marked an upbeat conclusion to a bullish month on Wall Street as the Dow soared 314 -- its best January since 1997. It was also the benchmark index's first positive January in four years. A positive first month of the year tends to be a good omen for stocks as the Dow as finished the full year higher 82% of the time the blue chips end January with a gain.
Most of the Dow's 30 stocks gained ground on Monday, led by commodity-related Alcoa (NYSE:AA), ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX). The index's weakest links were Wal-Mart (NYSE:WMT) and Procter & Gamble (NYSE:PG).
Overcoming the disclosure of a chip glitch from Intel (NASDAQ:INTC), the Nasdaq Composite rallied for the fifth day in the last six, bouncing back from its steepest plunge since August 11.
The energy sector was the clear winner on Monday, jumping close to 3% in response to Exxon's big earnings beat results. The world's largest publicly traded energy company blew estimates away with a 53% jump in fourth-quarter EPS to $1.85 on revenue of $105.19 billion. Analysts had been calling for EPS of just $1.63 on much lighter revenue.
Other big energy stocks like BP (NYSE:BP) and Petrobras (NYSE:PBR) enjoyed spillover buying in the wake of the Exxon results.
Wall Street continues to monitor the situation in Cairo, which was rocked by a seventh day of protests calling for President Hosni Mubarak's ouster. Banks in Egypt were shut for a third straight day, Moody's downgraded the government's bond rating and shipping giant Maersk suspended port activities in Egypt.
However, Wall Street's fears that the violence could shut down the Suez Canal, causing oil to spike above $100 a barrel, have not been realized. Nor have concerns that the chaos could spill over into neighboring countries like Saudi Arabia. An exchange-traded fund tracking Egyptian stocks, EGPT, reopened on Monday and jumped close to 8%. The ETF plunged nearly 14% last week and almost 8% the week before.
"The principal concern is that civil unrest spreads to Middle Eastern and North African oil producers, producing significant reverberations in financial asset prices and confidence," J.P. Morgan said in a research note.
It's possible Wall Street could grow alarmed at the surge for crude oil, which initially flatlined on Monday before closing the day sharply higher. Building on its 4% surge from Friday, crude leaped $2.85 a barrel, or 3.19%, to $92.19 -- its highest settle since October 3, 2008. Higher oil prices could cause more pain for U.S. consumers and transportation companies.
Also in the commodities complex, economically-sensitive copper jumped 1.96% a pound to $4.4510. Gold, which had its five-month win streak halted, slid $6.90 a troy ounce, or 0.51%, to $1,333.80. Both metals were impacted by the euro, which rose 0.70% to $1.3693.
Health-care stocks like UnitedHealth (NYSE:UNH) and Pfizer (NYSE:PFE) saw a mini bounce after a U.S. federal judge in Florida struck down President Barack Obama's health-care overhaul as unconstitutional. The case appears to be headed to the U.S. Supreme Court. Morgan Stanley health-care index closed 0.6% higher in the wake of the ruling.
On the economic front, the Commerce Department said personal spending jumped 0.7% in December, nearly doubling November's rise and well above forecasts for 0.5%. Personal incomes were up by an in-line 0.4%.
Also, a new report showed Chicago-area manufacturing activity jumped to 68.8 in January, topping forecasts for 64.5. It marked the indicator's highest level since July 1988. However, the prices paid component of the report jumped to more than two-year highs, indicating manufacturers had to deal with rising commodity prices.
Massey Energy (NYSE:MEE) reached a deal to be sold to rival Alpha Natural Resources (NYSE:ANR) for a mix of $7.1 billion of cash and stock. The deal places a 21% premium on Massey and would make Alpha the world's third-biggest producer of metallurgical coal.
Intel (NASDAQ:INTC) slid as much as 2% after warning its sales will be hurt by about $300 million due to a glitch in the design of its newly-released Intel 6 Series support chip. However, the company actually raised its first-quarter sales guidance, perhaps to reflect an acquisition.
Gannett (NYSE:GCI) beat the Street with a 30% rise in fourth-quarter profits and a non-GAAP profit of 83 cents a share. Analysts had called for EPS of 80 cents. Despite a drop in ad revenue, the publisher of USA Today and other newspapers said its total revenue rose 0.4% to $1.47 billion, narrowly topping the Street’s view of $1.5 billion.
Comcast (NASDAQ:CMCSA) announced the resignation of Steve Burke, its chief operating officer and the new CEO of NBC Universal. Comcast closed its takeover of NBCU from General Electric (NYSE:GE) on Friday.
The U.K.'s FTSE 100 slumped 0.31% to 5862.94, Germany's DAX declined 0.36% to 7077.48 and France's CAC 40 inched up 0.08% to 4005.50.
In Asia, Japan's Nikkei 225 slid 1.13% to 10360.30, Hong Kong's Hang Seng fell 0.68% to 23617 and China's Shanghai Composite gained 0.13% to 2752.75.