Stocks Gained; S&P 500 Ended above 1,400
Published on Tuesday, 07 August 2012 19:02 Written by Christopher Lynn
New York, August 7th (TradersHuddle.com) – Stocks gained for the third straight day, posting fresh three-month highs. The S&P 500 broke above 1,400 and the NASDAQ closed above 3,000, as expectations for additional stimulus measures from central banks helped with an underlying bid in the market.
The Dow Jones Industrial Average gained 51.09 points or 0.39%. The S&P 500 index climbed 7.12 points, or 0.51%, while the NASDAQ jumped 25.95 points, or 0.87%.
The market started in positive ground, as momentum continued on the back of hopes for central bank action amid mixed action in overseas markets. Participants pushed stocks to three-month highs on the back of the better than expected jobs report last week and as optimism grew that the ECB will ultimately act with swift measures that will help stabilize debt markets in the euro zone. Italian shares were moving higher despite the GDP reading showed the economy contracted 2.5% from a year ago, slightly above expectations of 2.3%.
Most of the S&P 500 sectors ended with gains. Energy, materials, industrials, and consumer discretionary were the best performers, while utilities, healthcare, and consumer staples fell.
The energy sector jumped 1.5% on the back of earnings in the sector and gains in crude oil. Chesapeake Energy (NYSE: CHK) rallied more than 9% to the top of the sector, as earnings missed expectations, but revenue topped consensus. Chesapeake said it earned $0.06 per share on revenues that climbed 2.1% from a year ago to $3.39 billion.
Cabot Oil & Gas (NYSE: COG) was another top performer, with shares jumping 5.12% to $42.88, while Tesoro (NYSE: TSO) jumped 5% after gasoline prices climbed on news of a fire in a Chevron refinery in California. UBS also maintained its Buy rating and target price of $38 on Tesoro. Shares of Chevron (NYSE: CVX) gained 0.57% to $111.95 on news the fire had been contained.
News that both Pfizer (NYSE: PFE) and Johnson & Johnson (NYSE: JNJ) ended further studies of one of the most anticipated experimental drugs for Alzheimer's disease following an unsuccessful second clinical trial weighed on the drug makers. Pfizer tumbled more than 2%, posting the biggest decline in the Dow Jones Industrial Average, while J&J slipped 0.8%.
Among earnings, Fossil (NASDAQ: FOSL) surged 31.5% to $91.77, logging the best performance in the S&P 500, after the company posted better than expected quarterly results and issued upside guidance for the full year earnings.
Sirius XM Radio (NASDAQ: SIRI), the satellite radio provider, rallied 4.55% to $2.30 after its results topped revenue expectations and it boosted its earnings outlook for the year.
Emerson (NYSE: EMR), the electric motor maker, gained 1.7% to $49.79 after its earnings topped expectations on revenues that were below consensus. The company also lowered its full year guidance to reflect weaker environment and current currency exchange rates. While, CVS Caremark (NYSE: CVS) lost 1.7% to $44.12 after trading as high as $45.90 in pre-market trading on a strong earnings report and brighter forecast for the year.
In the technology sector, Cisco Systems (NASDAQ: CSCO) jumped 2.7% to $17.14, posting the biggest gain in the blue chip index. Yesterday, Oppenheimer said that according to its checks it believes Cisco's July-quarter results are tracking in line with expectations.
Apple (NASDAQ: AAPL) slipped 0.26% on news that it had submitted bids for Eastman Kodak’s patents and as its war against Google escalates, by not including a prepackaged YouTube app in the new iOS 6. Shares of Google (NASDAQ: GOOG) dropped 0.35% to $640.54 on news that it also submitted a bid for Kodak’s patents.
Elsewhere, FirstEnergy (NYSE: FE) tumbled to the bottom of the S&P 500, as shares slumped 6.5% following quarterly results that missed earnings expectations. The company said it earned $0.59 per share, $0.06 worse than consensus, on revenues that fell 4.9% from a year ago to $3.9 billion versus consensus of $3.58 billion.
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