There's No Business Like FOX Business
Wall Street wasted little time recapturing almost all of Friday's losses as the Dow mounted its strongest rally since February on Monday on a flurry of bullish developments, including further evidence of the resiliency of American consumers and a big marriage in the airline industry.
Today's Markets
The Dow Jones Industrial Average rose 143.22 points, or 1.30%, to 11151.83, the Standard & Poor's 500 added 15.57 points, or 1.31%, to 1202.26 and the Nasdaq Composite picked up 37.55 points, or 1.53%, to 2498.74. The FOX 50 added 11.12 points, or 1.28%, to 876.79.
The suddenly-turbulent Dow posted its fourth triple-digit move (in either direction) of the last five days as the bulls cheered the unprecedented, $146 billion rescue of Greece,a $3.2 billion merger of UAL Corp.’s (UAUA) United Airlines and Continental Airlines (CAL), Apple (AAPL) selling its one millionth iPad, the strongest manufacturing report since June 2004 and the lowest savings rate in 18 months.
Consumer discretionary stocks enjoyed some of the strongest gains as Wall Street benefited from the best consumer spending report in five months, a further sign that the death of the U.S. consumer has been exaggerated.
“That is a huge positive. If Americans open up their pocketbook… that’s going to drive this economy and that’s going to drive the market,” NYSE trader Ben Willis of Sunrise Securities told FOX Business.
The Dow's 143-point jump was its best one-day performance since Feb. 16 and fourth largest gain of 2010. Almost all 30 blue-chip stocks headed north, led by American Express (AXP), Caterpillar (CAT) and Boeing (BA). The index's worst performers were ExxonMobil (XOM) and Alcoa (AA).
The Nasdaq Composite posted stronger gains as tech stocks like SanDisk (SNDK) and Garmin (GRMN) soared.
Monday's solid rally comes after Wall Street’s eight-week winning streak ended with last week’s volatile selloff. In fact, the Dow’s 1.75% slide last week represented its worst week since late January.
Wall Street cheered the latest M&A action as United and Continental announced a $3.2 billion all-stock merger that would -- if approved by shareholders and regulators -- create the world’s largest airline. The combined company would be majority owned by UAL shareholders and keep the United name. However, the Department of Justice is already looking into the deal on anti-trust matters.
Also, Avis (CAR) said it may bid on rival rental car company Dollar Thrifty (DTR), which already agreed to be acquired by Hertz (HTZ).
Consumer discretionary stocks outperformed, jumping more than 2%, as the Commerce Department said the savings rate slowed to 2.7% -- the lowest level in 18 months. The government also said consumer spending rose by an in-line 0.6% in March. Also, Apple said it sold 1 million iPads during the tablet device’s first 28 days.
Wall Street benefited from the $146 billion bailout of debt-ridden Greece, which was cemented after weeks of slow negotiations over how to avoid a default that officials believed would have wreaked havoc. The European Union, the International Monetary Fund and the European Central Bank unveiled a 110 billion euro loan package for Greece over the weekend that will provide financial assistance to the struggling nation over the next three years.
The loans give Greece precious time to implement its austerity plan instead of having to reduce its debt levels and face an increasingly-skeptical global investment community.The euro sold off in the wake of the deal, perhaps because it establishes a pricey precedent with debt issues in Spain and Portugal looming in the background.
The markets also bounced after the Institute for Supply Management said its closely-watched manufacturing index rose last month to a 60.4 reading -- the highest level since June 2004. Also, the Commerce Department said construction spending unexpectedly rose in March by 0.2%, the first rise in five months.
Buoyed by the economic optimism on Wall Street, crude oil jumped to its highest level since Oct. 2008 before retreating. Crude rose 4 cents a barrel, or 0.05%, to $86.19. Gold gained $2.60 a troy ounce, or 0.22%, to $1182.70.
Meanwhile, shares of Goldman Sachs (GS) rebounded following Friday's 9% selloff. Reports that the Justice Department is probing Goldman for potential criminal fraud charges rattled the markets last week.
Corporate Movers
Ford Motor (F) said its U.S. April sales jumped by 25%, marking the fifth-straight month the auto maker’s sales have increased by 20% or more. Ford also said it gained market share for the 18th time in last 19 months.
Toyota (TM) posted a 24.4% rise in April sales as the Japanese auto maker issued heavy incentives to counter a wave of negative safety stories. Analysts had projected a larger rise of 33% after March's 41% surge.
BP (BP) lost another 4% as the oil major continues to reel from the oil spill in the Gulf Coast. The U.S. and BP said the company will be responsible for paying for the cleanup of what may end up being one of the worst spills in American history.
Global Markets
The U.K.'s FTSE 100 was closed on Monday but Germany's DAX sank 0.51% to 6166.92 and France's CAC 40 closed up 0.30% to 3828.46.
In Asia, Japan's Nikkei 225 rose 1.21% to 11057.40, Hong Kong's Heng Seng slumped 1.41% to 20811.36 and China's Shanghai Composite gained 0.08% to 2870.61.
Dow builds on its gainsCost Of Greek Sovereign Debt Insurance Drops On Aid News
