It turned out to be a good Thursday for Wall Street and the stock market after a surprise preliminary earnings report from Wells Fargo & Co. sent stocks rallying more than 245 points.
This comes despite an overall disappointing group of retail sales reports most notably from the retail giant Wal-Mart.
Today’s Markets
At the 4 p.m. close in New York, the Dow Jones Industrial Average futures jumped 246.27 points, or 3.14%, to 8083.38, the S&P 500 rose 31.38 points, or 3.80%, to 856.54 and the Nasdaq Composite added 61.88 points, or 3.89%, to 1652.54. The consumer-friendly FOX 50 index added 20.51 points, or 3.31%, to 639.66.
Overall, the Dow gained approximately 1% for the week - its fifth-straight week - despite a two-day slide on Monday and Tuesday.
Thursday's trading session will be the last for this week, with the bonds, commodity and stock markets closed Friday in observance of Good Friday.
Wells Fargo (WFC) was the fuel for the market's fire after the San Francisco-based bank said it sees a profit of $3 billion, 55 cents per share in the first quarter, widely topping estimates for 23 cents per share and the $2 billion profit the bank earned this time last year. Shares of Wells soared more than 30%.
The bank also said its 2008 acquisition of then-dying Wachovia Bank has "exceeded expectations" and sees charge-offs declining to $3.3 billion.
"The market was prepared for everything but positive surprises," said Ted Weisberg, a NYSE trader with Seaport Securities. "But we certainly got a positive surprise out of Wells Fargo today. It was enough to get the market to get it going."
The Wells Fargo news lifted the entire financial sector, with Citigroup (C), Bank of America (BAC) and JPMorgan Chase & Co. (JPM) all posting double-digit gains out of the gate.
Enthusiasm for banking stocks overshadowed another round of bleak retail sales reports. Analysts polled by Thomson Reuters expected same-store sales to decline by 1% last month amid the deepest recession since World War II.
The biggest drag on the Dow was the retail giant Wal-Mart (WMT), which disappointed the market by saying its same-store sales excluding fuel rose by 1.4% in March, well short of expectations for a 3.2% jump. Shares of the Arkansas-based retailer were down 5%.
Wal-Mart wasn't alone as Costco (COST), Macy's (M), Target (TGT), Limited Brands (LTD), Wet Seal (WTSLA) and Bebe Stores (BEBE) all posted declines in same-store sales for March. On the upside, Buckle (BKE) said same-store sales rose by a better-than-expected 14.7% last month.
But for the most part, retailers were posting positive gains in Thursday trading - with the S&P 500 retailers index up 3%.
On the economic front, the Labor Department said initial jobless claims tumbled by 20,000 last week to 654,000, the 10th straight week above the 600,000 mark. Continuing claims, which are filed by those out of work for more than one week, surged by 95,000 to 5.8 million, the highest level since data began in 1967.
Also, the government said U.S. import prices rose for the first time in eight months thanks to a jump in oil prices. The Labor Department report showed prices were up in March by 0.5%, half as much as economists expected. Excluding oil, import prices tumbled for the eight-straight month amid the global recession.
In the commodity markets, crude oil futures ended higher by $2.64 per barrel, or 5.31%, to $52.00 a barrel. Gold slipped $6.50 per ounce, or 0.73%, to $879.30.
Corporate Movers
Berkshire Hathaway (BRK), billionaire Warren Buffett's holding company, lost its perfect "AAA" credit rating from Moody's, which cited the ongoing recession and heavy investment losses in the insurance sector. Last month Fitch Ratings similarly stripped Berkshire of its "AAA" rating.
Barclays Capital (BCS) announced the sale of its iShares exchange-traded funds to CVC Capital for $4.4 billion.
Morgan Stanley (MS) is expected to take a higher-than-expected first-quarter hit of $1.2 billion to $1.7 billion on a rebound in its bond prices, The Wall Street Journal reported. While rising bond prices are generally thought of as a positive, the write downs add to problems in real-estate and other business lines and could send Morgan to its first back-to-back quarterly losses since it went public 23 years ago, the newspaper reported.
Toyota Motors (TM) plans to overhaul its U.S. operations by combining engineering, manufacturing and sales under one exec, the Journal reported.
General Motors (GM) could receive $100 million to $200 million for its Hummer brand, which is still being bid on by three companies, including private-equity firms and wealthy individuals, Reuters reported. Of the three remaining bidders, which don't include any auto makers, only one is from the U.S., the wire service reported.
Wells Fargo (WFC) is likely to hold onto Evergreen Investments, the money-management unit inherited when Wells acquired Wachovia last year, the New York Post reported. However, Wells Fargo is likely to keep a smaller version of Wachovia's investment bank on hand, the newspaper reported.
World Markets
European indexes were solidly in the green, led by a 1.05% jump for Germany's DAX and a 0.42% rally for France's CAC 40.
Amid news of a Japanese stimulus package, Asian markets rallied overnight. Japan's Nikkei 225 soared 3.74% to 8916.06 and Hong Kong's Hang Seng rose 2.95% to 14901.41.
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