Stocks Gained on Stimulus Hopes

Published on Tuesday, 03 July 2012 18:44 Written by Christopher Lynn

New York, July 3^rd (TradersHuddle.com) – Stocks gained ahead of the Fourth of July Holiday after better than expected factory orders data and positive auto sales figures. Speculation over further stimulus measures from global central banks was supportive of the move, while Iran tensions boosted a rally in crude oil and the energy sector.

The Dow Jones Industrial Average gained 72.43 points or 0.56%. The S&P 500 index climbed 8.51 points, or 0.62%, while the NASDAQ jumped 24.85 points, or 0.84%.

The market started the session flat after spending most of the prior session recovering from a disappointing ISM Index reading. Positive action in overseas action provided some level of support amid increased hopes that central banks will spring into action to provide a boost to the global economy.

Economic news were supportive of the move higher as May factory orders gained 0.7%, above the 0.2% figure that was widely expected. Automakers also gained in the session after reporting June sales figures. Ford (NYSE: F) jumped 2.2% to $9.60 after saying that June sales jumped 7%, while General Motors (NYSE: GM) rallied 5.6% to $20.67 after saying its sales jumped 15.5%. Both automakers topped expectations. Meanwhile, Toyota Motors (NYSE: TM) climbed 0.87% after saying its sales surged 60% from a year ago. The figures were slightly below expectations, but still was a big jump from last year, which had the impacts of the Japanese earthquake and tsunami.

Most of the S&P 500 sectors gained. Energy surged 2.4%, while materials and industrials posted the other big gains in the session. Meanwhile, utilities and consumer discretionary fell. Energy stocks reacted favorably to a rally in crude oil prices amid increased tensions with Iran and speculation over global central banks providing stimulus measures. Crude oil rally 4.7% to $87.66 per barrel, while Brent gained 3.4% to settle above $100 per barrel on the London-based ICE Futures Europe exchange.

The biggest gainer in the energy sector and the S&P 500 was EOG Resources (NYSE: EOG). Another top performer was Alpha Natural Resources (NYSE: ANR), as the ancillary play received a bid of 6.4% on speculation of stimulus measures. Meanwhile, Anadarko Petroleum (NYSE: APC) jumped 5%. Yesterday, the company announced a joint-venture agreement for the gulf of México lucius development.

In the material sector, Freeport McMoRan (NYSE: FCX) jumped nearly 4% amid speculation that stimulus measures could spur additional copper demand. Alcoa (NYSE: AA), the aluminum producer, followed Caterpillar (NYSE: CAT) as the second best Dow performer, with shares climbing 3.2%. Alcoa gained despite Dahlman Rose cut its estimates for second quarter EPS and EBITDA ahead of the company’s earnings report due out on July 9th.

In the tech front, Apple (NASDAQ: AAPL) gained 1.16% to $599.41, with the stock topping $600 per share intraday for the first time since April. A U.S. judge blocked a request by rival Samsung Electronics to lift a ban on U.S. sales of its Galaxy Tab 10.1. Yesterday, Apple reached a $60 million settlement with China’s Proview to settle the lawsuit regarding the iPad trademark.

Microsoft (NASDAQ: MSFT) erased earlier losses to end with a gain of 0.65%. The company announced that it would take a $6.2 billion charge to write down the value of the online advertising agency it bought five years ago on a bid to catch up with rival Google (NASDAQ: GOOG).