Dow Jumps to 4-Year High on Solid U.S. Data

Published on Tuesday, 01 May 2012 19:06 Written by Christopher Lynn

New York, April 30^th (TradersHuddle.com) – Stocks gained, with the Dow closing at its best level in 4 years, after better than expected manufacturing data helped spur positive momentum in the session.

The Dow Jones Industrial Average gained 65.69 points, or 0.50%. The S&P 500 index jumped 7.91 points, or 0.57%, while the NASDAQ climbed 4.08 points, or 0.13%.

The market started in a narrow range amid a quiet overseas session with many of the Asian and European markets were closed for the Labor Day holiday. In Japan, the Nikkei fell sharply amid yen strength and the FTSE in London gained despite a weak April PMI figure that missed expectations. Meanwhile, in China, the official PMI was slightly lower than expectations but still signaling expansion.

Mid morning, stocks gathered support after factory activity in the U.S. posted a surprising gain in April, rising to 54.8 from 53.4 in March, and as construction spending edged up 0.1 percent to an annual rate of $808.07 billion in March.

The upside move was broad based, with all of the S&P 500 sectors closing in positive territory. Energy and financials gained more than 1%, while the consumer discretionary sector was also among the top performers. Chesapeake Energy was the top performer in the energy sector, rallying 6.3% to $19.6 after announcing it would replace CEO and founder Aubrey McClendon with a non-executive chairman in the near future and will also end the controversial investment program a year-and-a-half before the program was scheduled to close. In after hours, the stock was down after it missed earnings expectations on revenues that fell short of estimates. Meanwhile, ConocoPhillips (NYSE: COP) jumped 3.5% as it completed the spinoff of its downstream business. Shares of Phillips 66 (NYSE: PSX), ConocoPhillips’s downstream business, lost nearly 4% on their debut.

Also in the sector, Marathon Petroleum (NYSE: MPC) slid nearly 1% in the session despite beating earnings and revenue expectations. Marathon said it earned $1.70 per share, $0.37 better than consensus.  

In the financial space, Bank of America (NYSE: BAC) saw strength, jumping 2.5% to $8.31 and posting the biggest gains in the Dow Jones Industrial Average. The stock gained amid news that the lender was planning job cuts in its investment-banking unit. Rival JPMorgan (NYSE: JPM) followed with a gain of 1.9% in the session.

The consumer discretionary space received support from retailers Sears Holdings (NASDAQ: SHLD) and Abercrombie & Fitch (NYSE: ANF). Sears surged to the top of the S&P 500 after shares soared 15.4% to $62.05 after it provided a better than expected quarterly outlook. Meanwhile, Abercrombie & Fitch rallied more than 5% after it was upgraded to a Buy at UBS and added to the Top Picks Live List at Citigroup. UBS raised its target price to $66 from $51 given a more favorable risk/reward assessment with better upside potential to EPS estimates in 2012 and beyond.

Automakers posted sales figures through out the day, with sales industry wide edging higher from a year ago. Chrysler reported a jump of 20% in sales, while Toyota sales raised 12% as the automaker recovered from last year’s supply disruption issues and as its inventories returned to pre-earthquake levels. Shares of Toyota (NYSE: TM) fell 1.99% to $80.15, as the Japanese yen strength pressured exporters. General Motors (NYSE: GM) gained 1.4% to $23.31 despite sales falling 8% amid new products and aggressive marketing from competitors. Rival Ford (NYSE: F) slid 0.44% as sales fell 5%. The Dearborn, MI based automaker said sales of its Fiesta car plunged 44% amid competition from its own Focus and offering from Toyota and Chevrolet. Ford sales also suffered from a drop in the Escape sales, as the company clears out old inventory to make room for the new model launching later this quarter.

Elsewhere, P.F. Chang's China Bistro (NASDAQ: PFCB) surged close to 30% to $51.48 after private equity firm Centerbridge Partners said it will acquire the restaurant chain in a deal worth $1.1 billion.