Dow Ekes Out Longest Rally Since March ‘10

FOX Business: The Power to Prosper

The S&P 500 and Nasdaq Composite dipped into the red Wednesday amid slumping commodity-related stocks, but Walt Disney's big earnings beat nudged the blue chips to their first eight-day win streak in nearly 11 months.

Today's Markets

The Dow Jones Industrial Average rose 6.74 points, or 0.06%, to 12239.89, the Standard & Poor's 500 slid 3.69 points, or 0.28%, to 1320.88 and the Nasdaq Composite lost 7.98 points, or 0.29%, to 2789.07. The FOX 50 dropped 1.19 points, or 0.13%, to 943.89.

Before a late-day pop, Wall Street appeared to be headed for a negative finish in the face of strong earnings from big-name companies and the latest signs of life in the M&A market.

“The market doesn’t move in a straight line. I think it’s just taking a bit of a pause right here,” Jim Maguire, managing partner at Navite One Institutional Trading, told FOX Business.

The blue chips just barely notched their first eight-day win streak since March 2010. The benchmark index has soared 3.5% over that span, which is just the fifth eight-day win streak in the past dozen years.

Just over half of the Dow's 30 stocks gained ground, led by Disney, Hewlett-Packard (NYSE:HPQ) and Traveler's (NYSE:TR). The index's weakest links were Alcoa (NYSE:AA) and Chevron (NYSE:CVX).

The S&P 500 has nearly doubled since its crisis low of 666.79 hit in March 2009. If the S&P crosses above 1333.58 in the next few days, it would mark the fastest doubling of the broad index since 1936.

“We’ve been pretty overextended and due for a pullback,” said Michael James, managing director of equity trading at Wedbush Securities.

Ahead of crucial results and guidance from bellwether Cisco Systems (NASDAQ:CSCO), the Nasdaq Composite lost ground, ending its own four-day win streak. Cisco, which shocked the industry with a gloomy outlook and disappointing results last earnings season, is expected to say its EPS fell last quarter.

Commodity-related stocks such as U.S. Steel (NYSE:X) and Freeport McMoRan (NYSE:FCX) took the brunt of the selling on Wednesday amid concerns about the strength of emerging-market economies that are attempting to fend off inflation. Those worries were illustrated by a 1.03% decline in copper prices to $4.5270 a pound and a selloff in Shanghai Composite, China's main stock market.

Other commodities settled mixed. Crude oil slipped 23 cents a barrel, or 0.26%, to $86.71, while gold rose $1.40 a troy ounce, or 0.10%, to $1,364.80.

In his first appearance before the House since the GOP took over, Ben Bernanke, the chairman of the Federal Reserve, noted encouraging economic developments and repeated his feelings that inflation remains subdued. However, the central banker said the recovery in the job market remains too slow.

On the earnings front, Disney soared 5% to a 10-year high a day after revealing a 54% jump in fiscal first-quarter profits amid across-the-board strength. The media and entertainment giant's EPS of 68 cents solidly surpassed analysts' estimates for 56 cents.

Coca-Cola advanced as its non-GAAP EPS of 72 cents met Wall Street's expectations and its sales of $10.49 billion solidly surpassed consensus calls.

After cheering the announcement of several deals on Monday, Wall Street received word of a possible mega deal as NYSE Euronext (NYSE:NYX) said it is in talks to merge with Deutsche Bourse in a deal that would hand over control of the New York Stock Exchange to Germany's biggest stock market operator.

The proposed transaction, which hasn't yet been consummated, would give Deutsche Borse shareholders control of 59% to 60% of the combined company. After being halted, shares of NYSE Euronext surged nearly 17% and hit a circuit breaker.

In the bond market, Treasury prices rose in the wake of a very strong auction of $24 billion worth of 10-year notes.

Corporate Movers

Apple (NASDAQ:AAPL) has begun building a new version of its iPad table device that has a built-in camera and a faster processor, The Wall Street Journal reported. The next generation will be thinner, lighter, have at least one front-facing camera, more memory and a more powerful graphics processor, the paper reported.

Ingersoll-Rand (NYSE:IR) tumbled nearly 6% on a weaker-than-expected non-GAAP profit of 62 cents a share and a tepid outlook for the current quarter.

American International Group (NYSE:AIG) said it will take a $4.1 billion charge in the wake of an annual review that revealed the need to sharply boost loss reserves at its global property insurer Chartis. To help pay for the swelling reserves, the Treasury Department gave AIG the green light to retain $2 billion of the proceeds from the sale of certain assets.

Polo Ralph Lauren (NYSE:RL) leaped 8% to a record high amid enthusiasm for its EPS of $1.72 that blew away the Street’s view of $1.29. Boosted by a 15% surge in same-store sales, the apparel maker’s revenue of $1.5 billion topped estimates. Polo Ralph Lauren also doubled its dividend to 20 cents a share and boosted its stock buyback plans by $250 million.

Hewlett-Packard (NYSE:HPQ) unveiled the TouchPad, its long-rumored tablet device, which will run on its Palm division’s webOS software. H-P also announced a pair of new smartphones: the Veer and Pre3.

Global Markets

The U.K.'s FTSE 100 fell 0.64% to 6052.29, Germany's DAX lost 0.03% to 7320.90 and France's CAC 40 slipped 0.43% to 4090.74.

In Asia, Japan's Nikkei 225 declined 0.17% to 10617.80, Hong Kong's Hang Seng slumped 1.36% to 23164.00 and China's Shanghai Composite slid 0.89% to 2774.06.