Stocks Gain; NASDAQ Sixth Straight Gain (AA, AAPL, BRCM, COP, CVX, DKS, DOW, RIMM, SBUX, VLO, WSM)

Published on Thursday, 12 January 2012 18:41 Written by Christopher Lynn

New York, January 12^th (TradersHuddle.com) – Stocks closed higher, with the NASDAQ posting its 6^th straight gain, as the market erased earlier losses that came after weak economic data in the U.S. weighed on the positive sentiment stemmed from successful bond auctions in the euro zone.

The Dow Jones Industrial Average gained 21.57 points, or 0.17%. The S&P 500 index added 3.02 points, or 0.23%, while the NASDAQ jumped 13.94 points, or 0.51%.

The market started with modest gains after disappointing economic data in the U.S., weighed on futures and spurred a pullback from the highs that were hit after a positive response to successful bond auctions in both Spain and Italy. Both December Retail Sales and weekly jobless claims were worse than expected, with investors taking pause to digest the data amid the strong January rally.

In Europe, equity markets closed lower, after stocks pullback from higher ground after weaker economic data in the U.S, offset optimism in the euro zone after Italian and Spanish bond auctions that cut yields to have the level that they had in the prior auctions. The weakest reading in U.S. retail sales in seven months, send signals of the shakiness of the U.S. recovery.

Among the S&P 500 sectors, most ended in positive territory, with Materials, industrials, and technology leading the pack, while energy was the biggest decliner and staples and utilities edged lower, ending near the neutral line. Materials saw strong action, with Alcoa (NYSE:AA), the aluminum producer, posting the biggest gain in the Dow Jones Industrial Average and one of the biggest gains in the sector. Alcoa jumped 3.12% to $9.93.

The sector was helped by a move from the euro, which moved back above the $1.28 level. Dow Chemical (NYSE:DOW) rallied 3.6% to $32.56, as diversified chemical companies traded higher amid the ongoing drop in natural gas prices, with participants betting that chemical companies will benefit from higher margins in its products from lower production and raw material costs.

The weakness in both natural gas and crude oil weighed on the energy sector. Natural gas fell and traded around $2.70 per MMBtu, with many analysts thinking it could fall further, meanwhile crude oil closed below $100 per barrel for the first time this year on reports that the Iran embargo by the EU might be delayed.

Chevron (NYSE:CVX), the second largest U.S. energy producer, tumbled 2.6% to $104.97, posting the biggest decline in the blue chip index, as the stock received additional pressure after the company warned that it expects that fourth quarter EPS to be significantly lower than third quarter.

Also on the weak side, ConocoPhillips (NYSE:COP) fell 1.74% to $70.76 after the stock was downgraded to a Hold from Buy at Jefferies. On the flip side, Valero (NYSE:VLO), the independent crude oil refiner, jumped 2.4% to $20.94, as the spread between Brent and WTI crude oil prices gained.

Technology also gained and helped the NASDAQ to outperform the other benchmark indices. Research In Motion (NASDAQ:RIMM), the maker of the Blackberry smartphone, was one of the outperformers in the index, as shares rallied 5.32% to $16.44 after speculation the company hired Goldman Sachs to explore strategic options.

Also helping the sector and the NASDAQ, Broadcom (NASDAQ:BRCM) rallied 5.15% to $32.66. Yesterday, Jefferies upgraded the stock to a Buy.

Apple (NASDAQ:AAPL) underperformed, falling 0.27% to $421.39 after trading as low as $418.75, lower than the prior session low. The stock was on a holding pattern despite Ticonderoga saying that its checks indicate that Apple had its best December growth ever, with a 9.4% month over month growth, the first December where sales increased month-over-month. This strength follows the best month over month growth for a November that it had on record. The firm noted that Apple ended 2011 on a strong note and believes this momentum will continue in 2012.

In the consumer space, retailers were In focus amid earnings guidance. Williams-Sonoma (NYSE:WSM) tumbled 12.18% to 34.32 after the high-end home furnishings and cooking equipment retailer, cut its earnings guidance for the quarter blaming heavy discounting at its Williams Sonoma stores, and saying that Pottery Barn and West Elm brands saw decent sales performance.

Dick’s Sporting Goods (NYSE:DKS) surged 12.5% to $40.94 after the retailer announced a stock re-purchase plan of up to $200 million. The retailer also lowered its earnings guidance, citing the warmer the usual weather pattern in most of the U.S.

And Starbucks (NASDAQ:SBUX), the largest coffee shop chain in the world, gained 1.02% to $47.60 after posting a new all-time high of $47.63. The stock saw upside after UBS maintained its Buy rating but raised its target price to $52 from $47.