Stocks Jumped with the S&P 500 at Highest Level since July

Published on Thursday, 19 January 2012 00:12 Written by Christopher Lynn

New York, January 18^th (TradersHuddle.com) – Stocks jump, with the S&P 500 closing above 1,300 and hitting its highest level since July 2011. Participants lifted shares following a report that a deal in the Greek debt restricting talks was close to be finalize and after a surprising housing market report.

The Dow Jones Industrial Average gained 96.88 points, or 0.78%. The S&P 500 index jumped 14.37 points, or 1.11%, while the NASDAQ rallied 41.53 points, or 1.53%.

The market started around the unchanged line after pulling back from earlier highs. Reports over the IMF looking at increasing its lending programs by $1 trillion provided a lift to risky assets, while successful bond auctions in Portugal and Germany eased refinancing jitters in the euro zone; but the earlier boost lost momentum, with both the euro and European equities paring gains amid conflicting reports on the earlier IMF news. Earnings heated up as well, with Goldman Sachs beating the bottom line but missing on the revenue side.

In Europe, equity markets closed with slight gains amid talks discussing the Greek debt restructuring, raised jitters that prevented investors to take risk despite successful Portugal and Germany bond auctions.

Stocks added to gains after a report that the debt-ridden nation may reach an agreement with its private creditors by the end of the week. In the S&P 500 sectors most sectors closed in positive territory, with only utilities edging lower. Energy, consumer discretionary, and financials finished with the biggest gains. Financials were once again in focus following earnings from Goldman Sachs (NYSE: GS), U.S. Bancorp (NYSE: USB), and Bank of New York Mellon (NYSE: BK).

Goldman jumped 6.8% to $104.31 following a beat on the earnings front. Participants bid the stock higher despite a miss on the revenue side. U.S. Bancorp gained 1% to $29 after the company posted a jump of 40% in net income, as it profited from its core businesses, while average loans grew 5.9% year over year and noted that credit quality continued to improve and both net charge-offs and nonperforming assets were lower than the prior quarter.

Bank of America (NYSE: BAC) rallied 4.9% to $6.80, posting the biggest percentage gain in the Dow Jones Industrial Average and ahead of its earning report, scheduled for tomorrow before the opening bell.

In the energy sector, crude oil declined following an unpleasant demand outlook from the International Energy Agency. The news seemed to overshadow surprisingly strong housing data in the U.S. and news that the International Monetary Fund is looking to increase its lending pool by up to $600 billion. In other key oil news, the Obama Administration rejected TransCanada’s plans for the Keystone XL pipeline. Helmerich & Payne Inc. (NYSE: HP) was the best performer in the sector, with a jump of 6.4% to $61.

Consumer discretionary also received a bid after the National Association of Home Builders/Wells Fargo builder sentiment index climbed to hit its highest level since June 2007. Homebuilders such as PulteGroup (NYSE: PHM) jumped 5.8% following the report.

In tech land, Yahoo! (NASDAQ:YHOO) gained 3.18% to $15.92, following news of its co-founder Jerry Yang resigned from all of his positions in the company.

And Apple (NASDAQ: AAPL) gained 1.04% to $429.11 posting a new all-time high close and after it logged a new all-time high of $429.47. RBC Capital bumped its target price to $525 from $500.