Stocks Mixed as High Oil Prices Weighed; Dow briefly Tops 13000

Published on Tuesday, 21 February 2012 18:57 Written by Christopher Lynn

New York, February 21^st (TradersHuddle.com) – Stocks closed off their highs after choppy trading, with the major benchmark indices ending narrowly mixed, after chatter on the impact of higher oil and gasoline prices in the U.S. economy offset the positive reaction to news of the second Greek bailout. The Dow briefly traded above the 13,000 level for the first time since May 2008.

The Dow Jones Industrial Average gained 15.82 points, or 0.12%. The S&P 500 index added less than 1 point, or 0.07%, while the NASDAQ slumped 3.21 points, or 0.11%.

The market started with modest gains following mixed overseas action amid news that euro zone finance ministers agreed to provide a second round of financial aid to Greece after obtaining further budget cuts and a bigger haircut to private bondholders. Earnings results from Dow components Home Depot (NYSE: HD) and Kraft (NYSE: KFT) also helped boost sentiment.

In Europe, equity markets closed lower after participants took on the adage of “Buy the Rumor, Sell the News”. The 130 billion euro Greek bailout package took the prospects of a messy default off the table, however lingering concerns over the gloomy outlook for the Greek economy remained, which kept spurring jitters in the investment community.

Mid morning the Dow made and attempt and was able to break the important psychological barrier of 13,000 but it was only briefly, with stocks left drifting lower for the rest of the session amid concerns over high gasoline and oil prices and its impact on the economic recovery.

Energy stocks maintained their gains through out the session amid crude oil prices moving above $106 per barrel following concern over the suspension of Iranian oil supply to Britain and France. Baker Hughes (NYSE: BHI) posted the biggest gain in the sector, as shares jumped 2.36% to $51.24.

Also among the best performers in the sector were refiners, as gasoline prices continue to move higher reaching their highest level ever for this time of the year. Valero (NYSE: VLO) climbed 2.116%, while Tesoro (NYSE: TSO) gained 2.05% to $28.39. Big oil also moved higher, with Chevron jumping 1.6% to $108.41, posting the second biggest gain in the Dow Jones Industrial Average.

On the negative side, Anadarko Petroleum (NYSE: APC) fell 2.62% to $85.74 after the stock was downgraded to a Neutral from Overweight at JPMorgan. And Weatherford (NYSE: WFT), the provider of drilling, intervention, completion, and artificial lift services, plunged nearly 14% amid lingering accounting concerns.

Materials also staged gains in the day after the news out of the euro zone spur a move in metals and other commodities. Alcoa (NYSE: AA) jumped 2.56% to $10.41, posting the biggest gain in the blue chip index, while Newmont Mining (NYSE: NEM) rallied 3.5% to $61.54 along with other gold miners following the upside move in the gold bullion. Newmont logged one of the best gains in the S&P 500.

Freeport McMoRan (NYSE: FCX) jumped 2.2% to $43.97, as it also joined the parade of natural resource stocks moving higher. A jump in copper prices also lifted the stock during the session.

The Consumer Discretionary SPDR ETF (NYSE: XLY) closed with a loss of 0.35% after posting a new all-time high of $43.21 earlier in the session. The space received a boost from solid earnings from retailers and a rally on shares of Wynn Resorts (NASDAQ: WYNN).

Wynn surged to the top of the S&P 500, with shares jumping more than 6%, on news that it was forcibly buying back the 20% stake held by Kazuo Okada, as it accused Steve Wynn’s former business partner of violating foreign corruption laws. The move will be reducing the shares outstanding.

Macy’s (NYSE: M) also helped the sector after it reported solid earnings, which sparked a breakout in the stock. Macy’s jumped 1.21% to $36.69 after posting a new multiyear high of $38.22.  The department store operator beat quarterly earnings by $0.05 per share. Home Depot also gained 0.45% to $46.9 after trading as high as $48.07 a new multiyear high. The home improvement retailer delivered stellar earnings, which helped in the price action of the stock earlier on. Concern over the impact of gas prices on the U.S. consumer weighed on afternoon trading.

On the negative side in the sector, Netflix (NASDAQ: NFLX) tumbled more than 3.5% in the session on news that Comcast (NASDAQ: CMCSA) will be launching a video streaming service, complicating its competitive landscape, amid higher content costs.

Elsewhere, Wal-Mart (NYSE: WMT) tumbled 3.9% to $60.07, posting the biggest percentage decline in the blue chip index. Wal-Mart posted quarterly results that fell short of consensus and issued lackluster guidance for the current quarter and for fiscal 2013.

Apple (NASDAQ: AAPL) jumped 2.54% to $514.85, closing at the highs of the session. The stock received support after remaining mostly flat in the prior sessions following the sharp reversal that came after logging its all-time high of $526.29 last week. Earlier news that Apple signed an agreement with China Telecom, China’s third largest wireless carrier, to sell the iPhone in that country. The deal complements the prior Apple deal with China Unicom and leaves only the largest wireless provider in China, China Mobile, without the iPhone at least until it can upgrade its network and Apple offers a 4G iPhone, likely later in the year.

And Gilead Sciences (NASDAQ: GILD) tumbled 4.91% to $44.69, posting one of the biggest declines in the S&P 500 after the stock was downgraded to Equal Weight from Overweight at Barclay’s. Gilead continued to suffer weakness as result of negative results from a phase 3 trial.