Stocks Rallied on EU Optimism and Record Sales (AMZN, ANR, APQ, C, CVX, FCX, FFIV, FSLR, NFLX, POT, TIF, WYNN)

Published on Monday, 28 November 2011 17:36 Written by Danny Miller

  New York, November 28^th (TradersHuddle.com) – Stocks closed sharply higher after market sentiment received a boost following record holiday sales in the U.S. and optimism that policymakers will unveil new measures to contain the debt crisis in the euro zone.

The Dow Jones Industrial Average jumped 291.23 points, or 2.59%. The S&P 500 index rallied 33.88 points, or 2.92%, while the NASDAQ surged 85.83 points, or 3.52%.

The market started sharply higher, amid a broad rally in overseas markets spurred by EU optimism following numerous reports over the weekend that signaled the policymakers were working on additional measures, including the IMF considering providing support to Italy, to contain contagion. Retail sales over the Holiday weekend on the U.S. also boosted sentiment, as U.S. consumers went in record numbers to the malls and online, with retailers positing a 16% year over year jump in Holiday weekend sales, logging a record $52.4 billion.

On the economic news, new home sales climbed 1.3% in October to a seasonally adjusted 307,000-unit annual rate, below expectations, but the data had little impact on the bullishness of the day.

In Europe, markets rallied, posting the biggest single session gain in a month, as banks and insurers led the move higher on hopes EU policymakers will unveil fresh new measures to address the region’s debt crisis. Stocks also benefited from a global risk on trade, spurred by record holiday sales in the U.S. 

All of the S&P 500 sectors were trading with sharp gains, with economic sensitive sectors posting the biggest gains. Energy, materials, industrials, technology, and consumer discretionary posted advances of more than 3%. Energy and materials were led the advance as they also received a boost from a rebound in the euro and a pullback in the Dollar Index amid increase appetite for risk, while financials also jumped close to 3%.

The energy sector benefited from a rebound in crude oil. The fuel surged above $100 per barrel earlier in the session, to settle with a 1.5% gain at $98.12 per barrel. Anadarko Petroleum (NYSE:APC), the independent oil and natural gas producer, was one of the top performers in the sector. Anadarko rallied 5.47% to $75.77 after saying that its major gas finds offshore Mozambique were actually twice as large as it earlier thought. The region might become a major natural gas producing hub. Chevron (NYSE:CVX), the second largest U.S. energy producer, jumped 3.77% to $95.77, posting one of the biggest percentage gains in the Dow Jones Industrial Average. Chevron has calculated support at $94.45 and resistance at $109.

In the material sector a jump in the commodities complex providing a lift. Gold gained 1.6% to settle at $1710.80 per ounce, while silver rallied for 3.9% to end at $32.20 per ounce.

Alcoa (NYSE:AA), the aluminum producer, rallied 5.70% to $9.46, posting the biggest gain in the blue chip index, after the U.S. consumer went on a buying binge over the weekend providing a boost to the world’s largest economy. Also in the space, Freeport McMoRan (NYSE:FCX), the world’s largest publicly traded copper producer, surged 6.27% to $35.94 amid a rebound from both the euro and commodities complex, with copper rallying more than 2% on record high holiday sales in the U.S., the world’s second largest market for copper. Freeport tumbled 8.5% last week amid the big risk off trade, and closing below its calculated support at $35.24.

Also providing upside, Potash (NYSE:POT), the largest fertilizer company in the world, rallied 3.84% to $42.23 after it was upgraded to Outperform from Sector Perform at Scotia.

In the consumer discretionary space retailers were gathering a strong bid amid the improved retail picture, as a record 226 million consumers went out to shop online or to the mall, according to the National Retail Federation. Amazon.com (NASDAQ:AMZN), the largest online retailer, rallied 6.44% to $194.15 after announcing that Black Friday was the best ever for the Kindle family and the Kindle Fire, Apple’s iPad rival, remained its bestselling product. The stock saw an increased bid on cyber Monday, as commScore said that online sales on Black Friday jumped 26% year over year.

Other retailers were also higher. Tiffany (NYSE:TIF), the fine jewelry maker and luxury retailer, jumped 5.93% to $73.62 on record retail sales and ahead of its quarterly results. On average analysts expect a profit of $0.60 per share on revenues of $799.55 million. Last quarter, the retailer posted an upside earnings surprise of 23% after saying it earned $0.86 per share.

Also in the sector, and posting one of the biggest gains in the S&P 500 were Netflix (NASDAQ:NFLX) and Wynn Resorts (NASDAQ:WYNN).

The video rental subscription service Company, surged 9.54% to $69.95, rebounding from a dismal week, in which the stock plunged 18.2% and logged a new yearly low of $62.90. Netflix received a boost from a Barron’s article over the weekend, which cited Whitney Tilson, head of T2 Partners. The article made the case that Wall Street was too bearish on the company, and the stock has a potential to double from these levels, while the potential for the company to be a takeover target will basically limit downside risk. Jefferies maintained its Hold rating on the stock, while cutting its target price on the stock to $75 from $90 in order to reflect from the lowered guidance and capital raise, while Susquehanna upgraded the stock to a Neutral from Negative at Susquehanna.

Meanwhile, Wynn Resorts, the luxury casino operator, jumped 7.1% to $114.60 on the back of an improved picture from the U.S. consumer. The stock was also upgraded to a Buy from Hold at Needham. The firm set its target price at $145, saying Macau gaming market continues its robust trends and Las Vegas is showing signs of recovery.

On the tech sector, Apple (NASDAQ:AAPL), the maker of iPads and iPhones, jumped 3.45% to $376.12, rebounding from its 200day moving average level on the back of strong retail sales over the Holiday Weekend. Apple had one of its biggest selling days on Black Friday, as consumers snatched the new iPhone, iPads, and Macs. According to sales checks from Piper Jaffray, the firm was estimating that iPads sales jumped 68% year over year and Mac sales climbed 25% year over year. Piper Jaffray said that based on its checks it expects for Apple to easily meet its iPad shipment forecast of 13.7 million for the quarter. Apple had some small discounts during Black Friday and has included free shipping through December 22^nd to any item on its online store. . Last week, Jefferies bumped its EPS estimates above consensus for the current quarter and next year, despite cutting its iPad shipment forecast to 13 million from 17 million.

First Solar (NASDAQ:FSLR), the largest maker of thin film solar modules in the world, rallied 10.52% to $44.56, posting one of the biggest gains in the tech sector and the broad market index. F5 Networks (NASDAQ:FFIV), the application delivery networking Company, jumped 7.21% to $104.66, posting one of the biggest gains in the sector.

Banks also closed higher. Bank of America (NYSE:BAC) was one of the notable gainer, climbing 1.55% to $5.25 after hitting multi-year low of $5.12 last week. The stock traded as high as $5.53 in the session. And Citigroup (NYSE:C) rallied 6.01% to $25.24 on high volume after falling over 10% during the past week. The upside move came despite Morgan Stanley downgrading the stock to Equal Weight from Outperform.