Stocks Post Modest Gains ahead of Long Weekend

Published on Friday, 17 February 2012 20:07 Written by Christopher Lynn

New York, February 17^th (TradersHuddle.com) – Stocks logged modest gains, with the major benchmark indexes closing mixed for the session. The cautious move came after inline CPI data and headlines from the euro zone indicating that a Greek bailout deal was imminent. However cautious trader remained in the session, with participant hesitating to commit new capital ahead of a long holiday weekend.

The Dow Jones Industrial Average gained 45.79 points, or 0.35%. The S&P 500 index added 3.19 points or 0.23%, while the NASDAQ slid 8.07 points, or 0.27%.

For the week the Dow climbed 1.16%, while the NASDAQ jumped 1.65% and the S&P 500 gained 1.38%.

The market started around the flat line following a rally in the prior session that took both the Dow and the NASDAQ to multiyear highs on solid economic data. CPI data this morning was basically inline, while overseas action was positive amid the progress report in the Greek bailout negotiations.

In Europe, equity markets were able to advance and close higher on optimism a deal for the new Greek bailout will be reached this weekend, easing concern over a disorderly default that could potentially derailed the progress made in tackling the debt crisis in the region.

Among the S&P 500 sectors, consumer discretionary, financials, and energy posted the biggest gains, while healthcare and utilities fell and technology that has the biggest weighting on the broad market index ended mixed.

The Consumer Discretionary SPDR ETF (NYSE: XLY) gained 0.92% to $42.98 after posting a new all-time high of $43.02. The sector received support from retailers Urban Outfitters (NASDAQ: URBN) and Macy’s (NYSE: M).

Urban Outfitters rallied to the top of the sector, with shares jumping 3.7% to $28.48. The company gained last week after it reported preliminary fourth quarter sales that showed 9% over the same quarter last year to $731 million. And Macy’s gained 2.7% to $36.25, trading near its multiyear high of $36.37. The department store operator is scheduled to report its quarterly results on Tuesday before the opening bell. On average analysts expect a profit of $1.65 per share on revenues of $8.7 billion. Last quarter, Macy’s posted a 100% upside surprise.

But weighing on the sector was Nordstrom (NYSE: JWN). The luxury department store operator fell 2% to $51.14 after the company issued downside earnings guidance for its fiscal 2013. The company beat earnings expectations for the past quarter on revenues that were inline with estimates. The stock was downgraded to Underperform from Buy at Credit Agricole. After the closing bell, the board of directors authorized an $800 million share repurchase program, while increasing its dividend by 17%.

Other consumer related stocks were also in focus following better than expected earnings from Heinz (NYSE: HNZ) and Campbell Soup (NYSE: CPB). Both stocks jumped to the top of the staples sector.

Financials saw a bid, helped by a rally at regional banks, Zions (NASDAQ: ZION) and Huntington Bancshares (NASDAQ: HBAN), as shares jumped more than 2.7%. Meanwhile, Bank of America (NYSE: BAC) failed to gain in the session, however shares were able to test and close above its 200day moving average in the $7.96 area.

In the Healthcare sector, the biggest drag was Gilead Sciences (NASDAQ: GILD). The stock tumbled to the bottom of the S&P 500, as shares plunged 14.25% to 47 on negative news on its experimental hepatitis C drug.

But it was technology with its weighing that limited the gains the most in the session. Google (NASDAQ: GOOG) fell 0.31% to $604.64 amid news that the company was violating privacy policy of Apple’s Safari users, by tracking surfing behavior, despite the privacy setting. The stock also suffered some residual weakness from Baidu. Shares of Baidu (NASDAQ: BIDU) tumbled more than 3% despite beating earnings expectations, as Morgan Stanley said that its growth rate will likely slowdown this year.

Meanwhile, First Solar (NASDAQ: FSLR) surged to the top of the S&P 500, with shares rallying more than 7% after Collins Stewart said that it sees problem with permits to be resolved and expects that Department of Energy funds to start flowing to the AVSR project.

And Apple (NASDAQ: AAPL) edged 0.02% lower to $502.12, as the stock stabilize following the sharp volatility of the prior sessions. Oppenheimer bumped its target price to $570 from $510, reflecting increases to both their iPhone and iPad estimates. The firm's iPhone checks suggest only a small post-holiday slowdown in iPhone 4S demand, while iPad demand has fallen more post-holiday, although it believes this in part reflects the expectation of a new iPad 3.