FOX Business: The Power to Prosper
The Nasdaq Composite advanced for the eighth session in a row and the Dow crept closer to fresh 2010 highs on Friday as Wall Street cheered a six-month high in consumer sentiment and General Electric’s confidence-inspiring dividend hike.
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The Dow Jones Industrial Average rose 40.26 points, or 0.35%, to 11410.32, the Standard & Poor's 500 gained 7.40 points, 0.60%, to 1240.40 and the Nasdaq Composite jumped 20.87 points, or 0.80%, to 2637.54. The FOX 50 picked 4.76 points, or 0.54%, to 888.32.
Wall Street ended the day at session highs, a bullish way to cap off a week of quiet gains without almost any heavy selling pressure. It also allowed the markets to tack onto last week’s big rally.
“There’s been nothing to derail the positive tone. With low volume and a lack of real selling, the market continues to inch higher,” said Michael James, managing director of equity trading at Wedbush Securities.
Aside from General Electric’s (NYSE:GE) dividend hike and the higher consumer sentiment, the markets benefited from strong trade numbers in the U.S. and China and hopes Congress will extend the expiring Bush tax cuts.
Most of the Dow's 30 stocks advanced, led by GE and Pfizer (NYSE:PFE), which abandoned its hypertension drug. The index's weakest links were Boeing (NYSE:BA) and Kraft (NYSE:KFT).
The Nasdaq Composite jumped nearly 1%, lifted by tech stocks like Oracle (NASDAQ:ORCL) and Netflix (NASDAQ:NFLX). The win streak matched an eight-day stretch that ended in late October.
GE provided the markets with a midday jolt of confidence by saying it plans to hike its dividend rate by 17% to 14 cents a share amid confidence about its finance arm. Rival industrial Honeywell (NYSE:HON) followed suit, announcing a 10% increase to its annual dividend to $1.33.
Consumer discretionary stocks like retailer Gap (NYSE:GPS) and PC maker Dell (NASDAQ:DELL) were also among the best performers, rallying around the sentiment report. According to the University of Michigan/Reuters, consumer sentiment jumped in the first part of December to a six-month high of 74.2. Economists had called for a more modest rise to 72.5 from November’s 71.6. The current conditions part of the survey hit a level unseen since January 2008.
Wall Street's economic hopes were also boosted a bit by a new government report saying U.S. import prices rose 1.3% in November, exceeding the 0.8% increase analysts had forecasted and easing fears about deflation. Also, the Commerce Department said the U.S. trade deficit narrowed by 13.2% in October to $38.7 billion -- the lowest level in nine months. Exports climbed 3.2% to $158.7 billion -- the highest level since August 2008.
Traders were also digesting the latest talks in Washington about the expiring Bush tax cuts. The House of Representatives will likely pass an amended version of the White House's tax deal next week, Reuters reported. Analysts believe stock prices will be able to build on their 2010 gains if Congress reaches a deal to prevent taxes from rising on all Americans before the end of the year.
The markets were keeping an eye on China, which hiked banks' reserve requirements for the third time in a month, its latest effort to cool off its red-hot economy. The move came in the wake on a new report showing imports and exports soared by more than expected in November. However, China decided not to take the more aggressive move of hiking its interest rates, relieving some worried the government may go too far in its efforts to prevent a spike in inflation.
Also on the geopolitical front, the euro fell slightly against the dollar in the wake of the U.S. trade report, which was seen as dollar bullish. The currency continues to be weighed down by fears about Europe's sovereign debt crisis. The euro was off 0.05% to $1.3230.
In the commodities complex, crude oil declined 58 cents a barrel, or 0.66%, to $87.79. Gold slid $7.80 a troy ounce, or 0.56%, to $1,384.30.
Tenet Healthcare (NYSE:THC) surged 55% a day after Community Health Systems (NYSE:CYH) made a $3.3 billion takeover bid in an effort to create the largest U.S. hospital chain. However, Tenet rejected the offer, calling it “opportunistic” and “inadequate.” The cash-and-stock bid represented a 40% premium on Tenet’s Thursday closing price.
Greater Atlantic & Pacific Tea (NYSE:GAP), the grocer better known as A&P, is considering filing for bankruptcy protecting as soon as this weekend in an effort to restructure its mounting debt, Bloomberg News reported. A&P, which was founded in 1859, saw its stock plummet 67% on the report. The grocer, which also operates SuperFresh, Food Emporium and Pathmark Stores, reportedly hired law firm Kirkland & Ellis to represent it.
Pfizer (NYSE:PFE) pulled the plug on its blood pressure drug Thelin because of new evidence the drug can cause fatal liver damage. In addition to pulling it from the shelves, Pfizer said it is halting global clinical studies. Thelin had already been approved for use in the European Union, Canada and Australia.
Netflix (NASDAQ:NFLX) rallied 2% a day after the movie rental service was added to the S&P 500.
TJX Cos. (NYSE:TJX) announced plans to slash 4,400 jobs and consolidate its A.J. Wright division. The retailer said it will convert 91 A.J. Wright stores into T.J. Maxx, Marshalls and Home Goods stores. The remaining 71 A.J. Wright stores will be shuttered.
General Motors (NYSE:GM) CEO Dan Akerson told The Wall Street Journal the auto maker will ask the U.S. to loosen executive pay limits as GM is “starting to lose” good employees. Akerson told the paper there will be no raises for salaried employees this year.
Green Mountain Coffee Roasters (NASDAQ:GMCR) sank 10% as higher coffee costs weighed on the company’s outlook. Green Mountain said it sees first-quarter non-GAAP EPS of 14 cents to 18 cents, compared with forecasts for 20 cents. The company also lowered the midpoint of its fiscal 2011 EPS view.
Jackson Hewitt (NYSE:JTX) surged 25% after the No. 2 U.S. tax preparer beat the Street with a non-GAAP loss of 66 cents a share, compared with estimates for a loss of 74 cents. Jackson Hewitt also said it has expanded its refund anticipation loan (RAL) product coverage to about 80% of anticipated volume and is working with Wal-Mart (NYSE:WMT) to drive more clients to its kiosks.
The U.K.'s FTSE 100 rose 0.09% to 5812.95, France's CAC 40 slid 0.02% to 3857.35 and Germany's DAX added 0.60% to 7006.17.
In Asia, Tokyo's Nikkei 225 sank 0.72% to 10212.00, Hong Kong's Hang Seng slipped 0.04% to 23162.90 and China's Shanghai Composite soared 1.07% to 2841.04.