Financial, Energy Shares Lead Wall Street Higher
FOX Business: The Power to Prosper
A bounty of upbeat news for financial firms, combined with big gains in the energy markets, helped send the blue chips higher for the third-straight day.
The Dow Jones Industrial Average jumped 72.7 points, or 0.6%, to 12,261, the S&P 500 gained 10.7 points, or 0.83%, to 1,307 and the Nasdaq Composite climbed 11.2 points, or 0.41%, to 2,740. The FOX 50 climbed 6.7 points to 915.
The blue chips are now on the best winning streak since March.
Financial shares posted the best performance after Bank of America (NYSE:BAC) announced it had made an $8.5 billion settlement relating to mortgage-backed securities resulting from its takeover of Countrywide. Mastercard (NYSE:MA) surged to an all-time high after the Federal Reserve proposed a less restrictive plan for so-called debit-card interchange fees than it had initially proposed.
A bullish inventory report pushed energy markets sharply higher. Energy shares like Halliburton (NYSE:HAL) and ConocoPhillips (NYSE:COP) got a major boost on the news.
Oil inventories dipped 4.4 million barrels last week, according to the Energy Department, a far bigger decrease than the 1.6 million analysts forecast. Gasoline stocks were off 1.4 million barrels, compared with estimates for a gain of 100,000. Generally, lower supplies are seen to put upward pressure on the price of crude.
Light, sweet crude jumped $1.88, or 2%, to $94.77 a barrel. Wholesale RBOB gasoline soared 12 cents, or 4.2%, to $3.01 a gallon.
Consumer gasoline prices continue falling. A gallon of regular gas at the pump costs $3.54 a gallon on average nationwide, down from $3.63 last month, but well higher than the $2.76 drivers paid last year, according to the AAA Fuel Gauge Report.
The euro gained 0.49% on the U.S. dollar and the greenback fell 0.42% against a basket of world currencies.
Greek lawmakers passed a sweeping austerity package, lifting hopes the country will be able to avert a default. Market participants largely expected the austerity vote, that is expected to save the country $40 billion over five years, to have passed.
The country has a public debt burden of nearly half a trillion dollars -- 150% of its annual economic output -- and needs assistance from European lenders to avert a default, according to many analysts.
The European Union and International Monetary Fund have already provided the beleaguered country with a $156 billion bailout, which hasnt proved to be sufficient. In the short term, the austerity vote opens the door for the release of $17 billion in emergency funding to pay the next tranche of debt. These austerity measures have been deeply unpopular, however, sparking broad, and increasingly violent, protests throughout Athens.
On the corporate front, General Mills (NYSE:GIS) posted a fiscal 2012 earnings forecast of $2.60 to $2.62 a share on rising costs. Wall Street was expecting the maker of Cheerios to earn $2.67 a share for the fiscal year. Shares were lower in early trading on the news.
Monsanto (NYSE:MON) unveiled a wider-than-expected 77% increase in fiscal third-quarter earnings. The seed giant also boosted its fiscal 2011 financial guidance, sending its stock jumping more than 4%.
Pending sales of existing U.S. homes jumped 8.2% in May -- a substantially bigger increase than the 3.8% Wall Street was expecting. Sales are up 13.4% from last May, the National Association of Realtors said. This report comes on the heels of a slightly better-than-expected S&P/Case-Shiller home price report for April.
The housing market has been slow to recover because of a glut of supply, tough mortgage conditions and still relatively weak demand, according to economists.
In metals, gold was up $10.20, or 0.68%, to $1,510 a troy ounce. Silver rose $1.12, 3.3%, to $34.77 a troy ounce.
BJ's Wholesale Club (NYSE:BJ) agreed to a $2.8 billion takeover by private equity firm Leonard Green & Partners and funds advised by CVC Capital Partners.
NYSE Euronext (NYSE:NYX) and Deutsche Boerse have notified European regulators of their merger plans.
The English FTSE 100 jumped 1.5% to 5,856, the French CAC 40 soared 1.9% to 3,924 and the German DAX climbed 1.7% to 7,294.
In Asia, the Japanese Nikkei 225 gained 1.5% to 9,797 and the Chinese Hang Seng was essentially unchanged at 22,061.