Stocks End Near Session Highs
26-Jul-12 16:15 ET
[BRIEFING.COM] After four consecutive losing sessions, U.S. indices and their European counterparts ended the day firmly in the black.
European trading was uneventful during the early part of the session. However, markets took off immediately after comments from European Central Bank President Mario Draghi. The central bank's president said officials are "ready to do whatever it takes to preserve the euro." Following the statement, risk assets spiked and never looked back. Spain's IBEX closed 6% higher, and Italy's MIB posted a 5.6% gain. Furthermore, France's CAC and German DAX also rose by 4% and 2.8% respectively.
Spain's 10-yr yield declined 44 basis points to 6.93% while the yield on Italy's 10-yr debt fell 39 basis points to 6.06%.
The risk rally contributed to a higher open in U.S. equities which sustained the opening levels throughout the day. The three main indices closed near session highs.
The energy sector led the charge as the SPDR Energy Select Sector ETF (XLE 69.00, +1.91) advanced nearly 3% while the materials and retail sectors lagged the broader market gains.
Major financials were one of the main beneficiaries of today's market advance. The SPDR Financial Select Sector ETF (XLF 14.49, +0.22) was up over 1.5%. American Express (AXP 57.76, +1.71) was higher by 3% while Citigroup (C 26.28, +0.49), and Bank of America (BAC 7.17, +0.10) advanced 2% and 1.4% respectively.
Communication solutions provider MetroPCS (PCS 8.59, +2.31) surged 37%. The advance came on the heels of a positive second quarter earnings report. In addition, the company expects to launch 4G service before quarter's end. Sprint Nextel (S 4.05, +0.68) also posted a considerable gain, climbing 20%. The firm's earnings beat expectations on increased iPhone sales.
Zynga (ZNGA 3.18, -1.90) was one of the weakest performers following a second quarter loss and slowing revenue growth. Its shares fell almost 40%. The significant weakness spilled over to Facebook (FB 26.85, -2.50) which receives 11% of its revenues from the company. Facebook was down more than 6% ahead of its after-hours earnings release.
Crude oil spent its entire floor session in positive territory, touching a session high of $90.47 per barrel. It gave up some of its gains as the day progressed, and settled with a 0.4% gain at $89.40.
Today's rally adversely impacted the dollar index which fell to near-term support at 82.67 before rebounding to 82.85. The British pound was the strongest performer against the dollar, up over 1.2% at 1.5685. The euro also rallied against the greenback, posting a 1.1% advance to 1.2285.
The latest weekly initial jobless claims count totaled 353,000, which is better than the 381,000 that had been expected, on average, among economists polled by Briefing.com. The latest tally is also down from the upwardly revised prior week count of 388,000. As for continuing claims, they fell to about 3.287 million from 3.300 million.
Roughly 115 companies are set to report their results after-hours. Some notable names include: Amazon (AMZN 220.01, +2.96), Coinstar (CSTR 59.22, -0.05), Facebook (FB 26.85, -2.50), and Starbucks (SBUX 52.41, +2.00).
The busy earnings schedule continues before Friday's open with names like AON (AON 46.48, +0.34), Chevron (CVX 108.27, +2.21), and Merck (MRK 43.33, +0.71) set to report.
Friday's economic data includes second quarter GDP at 8:30 AM ET and University of Michigan Consumer Sentiment at 9:55 AM ET.