Stocks Rally For Third-Straight Day; Dow Jumps 147
FOX Business: The Power to Prosper
While the Dow's gains were sliced in half during the last hour of trading Tuesday, the markets have rallied for three-straight days as traders have hunted for bargains amid optimism Greece will be able to avert a costly default.
Today's Markets
The Dow Jones Industrial Average jumped 147 points, or 1.3%, to 11,191, the S&P 500 gained 12.4 points, or 1.1%, to 1,175 and the Nasdaq Composite rose 30.1 points, or 1.2%, to 2,547. The FOX 50 climbed 7.8 points to 857.
The rally, which had been broad, lost steam late in the trading session. Disney (NYSE:DIS), which had hit a 52-week low last week, was among the best-performing Dow components in a sign traders were scooping up beaten down stocks.
The materials and industrial sectors tacked on the most gains on the day, while utilities consumer-driven stocks lagged behind considerably.
Indeed, Best Buy (NYSE:BBY) a major technology retailer, revealed it plans on hiring 15,000 seasonal employees this holiday season from 29,000 last year, citing growing economic headwinds, according to a report by Reuters.
On the heels of a dismal week, the markets have staged a powerful rebound bid: the blue chips have surged 457 points, or 4.3%, in the last three sessions -- the best performance on a percentage basis in a month. European shares, which were beaten down severely last week, also bounced back, with the Euro Stoxx 50, a euro zone blue-chip index, leaping 9.9% over the past three trading sessions.
The yield on the 10-year Treasury, which repeatedly touched historic lows amid the intense turmoil last week, has climbed in a sign of the return to riskier equity and commodities markets. The benchmark bond recently yielded 1.988%, up from 1.905%, and in the range leading up to the Federal Reserve's monetary policy decision last week.
Worries that Greece may default on its debt, sparking a chain of events that could put pressure on other countries, and the euro zone's financial system, roiled the markets last week. However, Greece's parliament approved a highly-unpopular property tax on Tuesday, which was a key measure in securing much-needed rescue aid.
Officials from the European Union and International Monetary Fund have also broadly signaled that they are ready to take action to continue quelling the crisis. However, many market participants remain very cautious as no solid statements have been made, and the situation remains fluid.
On the economic front, the S&P/Case-Shiller Home Price index was unchanged on a seasonally-adjusted basis from June to July, missing expectations of a 0.1% increase. However, prices are down 4.1% from last year, better than the 4.4% economists anticipated. Many more forward-looking data points have pointed to continued weakness in the housing sector as stubbornly high supply, and tepid demand have left prices depressed. Additionally, economists say, uncertainty over the state of the economy has weighed on would-be homebuyers.
Consumer confidence remained depressed in September, edging higher to 45.4 from 45.2, according to the Conference Board. Additionally, the sub-index that tracks sentiment on how difficult it is to find a job hit the highest level since 1983.
Confidence is an important component in consumers' decision-making process, and is seen to factor directly into buying decisions. These data are particularly crucial with just months to go before the key winter holiday season for retailers, such as Wal-Mart (NYSE:WMT) and Best Buy (NYSE:BBY).
The precious metal market has been particularly volatile of late. Gold prices had nose dived $214.10 or 11.9%, over the past four sessions, pushing prices back to July levels before rallying on the day. On Tuesday, Gold jumped $57.70, or 3.6%, to $1,652 a troy ounce.
Energy markets were in the green as well, tracking a weaker dollar and a flight back into risky assets. Light, sweet crude rose $4.21, or 5.3%, to $84.45 a barrel. Wholesale RBOB gasoline gained 13 cents, or 4.9%, to $2.70 a gallon.
In currencies, the euro rose 0.63% against the U.S. dollar, while the greenback sunk 0.55% against a basket of world currencies.
Corporate News
Walgreen (NYSE:WAG) posted fiscal fourth-quarter profits of 57 cents a share, excluding a 30 cent after-tax gain from its sale of its pharmacy benefit division, topping analysts' estimates of 55 cents.
Foreign Markets
The euro zone Stoxx 50 soared 5.3% to 2,194, the English FTSE 100 gained 4% to 5,294 and the German DAX jumped 5.3% to 5,628.
In Asia, the Japanese Nikkei 225 jumped 2.8% to 8,610 and the Chinese Hang Seng gained 4.2% to 18,131.