New York, June 12th (TradersHuddle.com) – Stocks jumped more than 1%, rebounding from the prior session weakness, despite ongoing contagion concerns in the euro zone. Participants moved towards risk, shrugging off record high Spanish bond yields and worries over the crisis spreading once again back to Italy.
The Dow Jones Industrial Average rallied 162.57 points or 1.31%. The S&P 500 index gained 15.25 points, or 1.16%, while the NASDAQ jumped 33.34 points, or 1.19%.
The market started with modest gains, as Wall Street attempted a rebound from yesterday’s disappointing losses as the optimism over the Spanish bank bailout quickly faded. Investors were cautious amid climbing yields on Italian and Spanish debt.
However, the markets garnered additional support, staging an impressive advance that saw the major equity averages score broad-based gains. The upside move came despite a bailout request by Cyprus, and worries perhaps that Italy might need financial support and that Spain may need more than a bailout for its banks. This concerns coupled with a downgrade to Spanish banks pushed Spain's 10-year Security to a record euro era high above 6.8%.
The broad based move helped all of the S&P 500 sectors to end in positive territory. Materials, Industrials, and financials saw the biggest gains, while utilities and consumer staples logged the smallest gains. In the materials sector, Cliff Natural Resources (NYSE: CLF) rallied 3.8% to $48.23, logging the biggest gain in the sector, while United States Steel (NYSE: X) jumped 2.8% to $18.39, as the euro drifted higher as risk aversion eased somewhat on profit taking on bearish positions.
The industrials sector received a boost from Boeing (NYSE: BA). Shares of the aircraft maker jumped 3.5% to $72.58, posting the biggest gain in the Dow Jones Industrial Average, after it was upgraded to Outperform at Bernstein. Cummins (NYSE: CMI) was the best performer in the sector, as shares rallied 4.6%.
United Technologies (NYSE: UTX) was one of the only 4 stocks lagging in the industrial sector, and the only Dow component ending in negative territory. United Technologies slid 0.36% after it announced an offering of $1.00 billion of equity units.
Financials also saw a sharp rebound, with both JPMorgan (NYSE: JPM) and Bank of America (NYSE: BAC) jumping nearly 2.9%. JPMorgan’s Jamie Dimon is scheduled to testify before the U.S. Senate Banking committee tomorrow, a month after the bank revealed the massive trading loss of more than $2 billion.
Technology was in focus, as well. Apple (NASDAQ: AAPL) gained 0.87% to $576 after Cannacord Genuity bumped its target price to $800 from $775, following the stock reversal in the prior session, as participants saw the lack of a blockbuster at the WWDC as a reason to sell the stock amid the broad weakness. However, Apple unveiled its Map app and its next generation MacBook Air and MacBook Pro, which includes a new retina display. Apple announced its iO6 and Mountain Lion OS.
Juniper Networks (NASDAQ: JNPR) gained 1.3% after the company announced a share buyback program of up to $1 billion, while Texas Instruments (NASDAQ: TXN) rallied 2% after the chipmaker narrowed its second quarter guidance and full outlook for the year.
Other major movers, First Solar (NASDAQ: FSLR) surged 21% to $14.95, posting the biggest percentage gain in the S&P 500 following news that the company has entered into an agreement to build two large solar projects in Australia. And Michael Kors (NYSE: KORS) rallied 7.7% to $41.10 after the company topped earnings results and issued upside guidance for the quarter and the full year.
Elsewhere, Facebook (NASDAQ: FB) gained 1.46% to $27.40, as the stock appears to have been settling after the violent volatility following the botched IPO. Yesterday, Needham defended the stock, reiterating its Buy rating and $40 price target. Last week, the stock logged a new record low at $25.52, but reversed sharply after setting it.
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