Wall Street Kicks off Celebration Early: Stocks Rally for 5th Day

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Published July 01, 2011

| FOXBusiness

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The blue chips capped the best week in two years with a pre-Independence Day rally as traders cheered a better-than-expected ISM manufacturing report. 

Today's Markets

The Dow Jones Industrial Average climbed 168 points, or 1.4%, to 12,583, the S&P 500 gained 19 points, or 1.4%, to 1,340 and the Nasdaq Composite rose 42.5 points, or 1.5%, to 2,816. The FOX 50 gained 13 points to 937.  

As Greece fades from the spotlight, market participants are beginning to pay closer attention to the global economic recovery and second-quarter corporate earnings. Many economic reports this week were positive, sending the major market averages well into the green. For the week, the Dow jumped 5.4%, the S&P 500 rallied 5.6% and the Nasdaq soared 6.2%. 

The highly-watched Institute for Supply Management Manufacturing PMI report ticked higher to 55.3 in June from 53.5 in May, easily topping estimates of 51.8. Readings above 50 are seen as pointing to expansion in the manufacturing sector.  Several regional Federal Reserve reports showed steep contractions in the manufacturing sector, but data on the Midwest region from ISM released on Thursday came in significantly higher than expectations.

"Pressures from rising commodity costs, plus supply-chain disruptions from Japan's natural disaster have combined to slow manufacturing's momentum," wrote IHS Chief U.S. Economist Nigel Gault in a research note. "This report suggests that those pressures may be starting to ease."

Consumer sentiment edged slightly lower to 71.5 in the end of June from 71.8 in the prior reading.  Wall Street forecast the gauge to hit 71.9 for the end of the month.  Falling gasoline prices helped push consumers' inflation expectations down to the lowest level since February. 

Construction spending, however, fell 0.6%, the sixth straight month of declines, pushing the gauge to the lowest level since 1999. 

Euro zone finance ministers could agree to release the next $17 billion round of aid to Greece as early as Saturday, according to a report by the Wall Street Journal. The country that has been struggling with an enormous public debt burden approved a sweeping, $40 billion austerity package that European authorities had pushed for for several weeks. 

Energy markets ended the day  mixed.  The U.S. dollar fell 0.09% against a basket of world currencies and the euro edged 0.11% higher against the dollar. 

Light, sweet crude was off $1.17, or 1.2%, to $94.34 a barrel.Oil, however lurched 4% higher for the week -- the biggest gain since early April. 

Wholesale RBOB gasoline gained 3 cents, or 0.11%, to $2.97 a gallon. 

Prices at the pump ticked higher overnight, but have been on a trend lower.  A gallon of regular gas costs $3.55 on average nationwide, down from $3.78 last month, but well higher than the $2.75 drivers paid last year, according to the AAA Fuel Gauge Report. 

Gold dipped $20.20, or 1.3%, to $1,483 a troy ounce.  Silver fell $1.13, or 3.2%, to $33.71 a troy ounce. 

Corporate News

Blackboard (BBBB) agreed to be taken private by Providence Equity Partners for $1.6 billion in cash. 

Eastman Kodak (EK) shares plunged after a U.S. trade panel backed an unfavorable ruling by a judge in the company's patent battle with Apple and Research in Motion. 

Apple (AAPL) and Research in Motion (RIMM) are among six companies that bought out bankrupt Nortel Networks' portfolio of patents for $4.5 billion. 

Foreign Markets

The English FTSE 100 gained 0.74% to 5,990, the French CAC 40 edged 0.63% higher to 4,007 and the German DAX rose 0.59% to 7,419. 

In Asia, the Japanese Nikkei 225 was up 0.53% to 9,868 and the Chinese Hang Seng soared 1.5% to 22,398. 

URL

http://www.foxbusiness.com/markets/2011/07/01/futures-seek-direction-following-four-day-rally/