Most Stocks Advance, amid Strength in Banks and Commodities. Dow Leaders: AXP, JPM, BAC, CAT, and BA

Published on Friday, 25 June 2010 19:04 Written by Christopher Lynn

New York, June 25^th (TradersHuddle.com) – Most stocks advanced, snapping their recent losing streak at four sessions, as bank stocks surged after congress reached a deal in a watered down financial overhaul bill. Commodities also moved higher amid Dollar weakness, still the benchmark indices had a lackluster session, finishing mixed, with modest gains in the broad market index.

The overall market struggled from the start of the trading session, despite the financial sector spiking higher after legislators reached a deal on the final financial regulatory reform bill. The bill, which is expected to pass in the coming weeks, will limit banks proprietary trading, with banks able to retain trading in interest swaps and foreign currency as some participation in hedge funds and private equity funds. The full impact of the bill, is still an unknown, however market participants pushed the sector higher as they see as a positive that the uncertainty regarding FinReg, has been lifted and now, financial institutions will work to try to minimize the impact on the bottom line.

Financial stocks gained 2.8% as a group, with JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC), the Nation’s biggest lender, gaining more than 2.6% and posting some of the biggest gains in the Dow Jones Industrial Average, as the FinReg deal removed an overhang on the sector.

American Express (NYSE:AXP), the card issuer, was the best Dow component, as shares surged 3.92% to $42.97. American Express moved higher along the financial sector, as the financial regulation overhaul will be less onerous than anticipated. The stock also benefited from yesterday’s Discover’s (NYSE:DFS) earnings report, which showed profit jumped 14%, as improving credit trends allowed the company to free up funds in reserves.

Material stocks also had a strong showing, with a 1.4% gain, led by gold stocks like Newmont Mining (NYSE:NEM), the world’s largest gold miner, which gained 4.6%, as gold prices moved higher partly by the pullback in the Dollar.

The greenback’s decline, helped the afternoon advance by the broader market, but the move was difficult to sustain as stocks turned lower in choppy trading toward the close. Still most stocks advanced with major benchmark indices finishing mixed.

Economic data seemed to have little impact, the final GDP reading for the first quarter showed that the overall economy grew at a slower-than-expected rate of 2.7%. Meanwhile, the final Consumer Sentiment Survey for June from the University of Michigan. It improved slightly to 76.0, which represents the best reading since January 2008.

Industrial stocks also helped by the decline in the Dollar gained 0.6% for the day. Caterpillar (NYSE:CAT), the largest earthmoving equipment maker gained 2.11% to $64.71, posting the fourth largest percentage gain in the blue chip index. Caterpillar’s moved to the upside was partly as the commodity related trade returned.

Boeing (NYSE:BA), the 2^nd largest commercial aircraft maker, was the fifth best Dow component, as shares added 1.99% to $68.77. Boeing announced that it would temporarily ground its 787 Dreamliner test plane after finding a problem with the horizontal tails. Boeing said that engineers will be inspecting all of the 23 Dreamliners currently in production to fix the problem, the company said that this will take about 8 days to get it fixed and do not expect delays in the testing or the first 787 plane delivery schedule.