US Stocks Finish Higher For Second Straight Day -- FEC

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Date Posted: 17:01:11 06/27/12 Wed
Author: By Jonathan Cheng wednesday
Subject:

US Stocks Finish Higher For Second Straight Day

US Stocks Finish Higher For Second Straight Day
28/06/2012 6:23AM

By Jonathan Cheng

Investors pushed stocks to a second consecutive day of gains as a rise in oil prices and positive readings on the U.S. housing sector lifted sentiment ahead of a two-day European summit meeting.

The Dow Jones Industrial Average tacked on 92.34 points, or 0.74%, to finish at 12627.01. The Standard & Poor's 500-stock index rose 11.86 points, or 0.90%, to 1331.85 and the Nasdaq Composite added 21.26 points, or 0.74%, to 2875.32.

Energy stocks drove the bulk of the gains, bolstered by a run-up in oil prices. The list of top S&P 500 performers Wednesday was dominated by energy names, with Cabot Oil & Gas, QEP Resources, WPX Energy, NRG Energy and Nabors Industries all surging 5.6% or more.

Among blue-chips, Exxon Mobil gained 80 cents, or 1%, to $83.20 and Chevron advanced 1.62, or 1.6%, to 102.57. Despite the day's increases, energy is the only one of the 10 S&P 500 sectors that is in negative territory for the year, off 6.8% from where it started 2012.

Financials, industrials and health-care stocks were also firm on a day of broad-based gains. J.P. Morgan Chase rose 1.07, or 3%, to 36.78 and Bank of America added 15 cents, or 2%, to 7.77 to lead the Dow components.

However, Facebook fell 87 cents, or 2.6%, to 32.23 as many analysts at banks that underwrote its initial public offering last month began coverage of the Menlo Park, Calif., social-networking operator. The research was largely expected to be bullish, but "hold" ratings outnumbered the "buy" ratings.

The broad market gains came after a report on pending home sales in May topped expectations to match the highest level of the year, the latest in a string of signs of the housing market's recovery. Also helping were strong earnings from homebuilder Lennar, which projected a slow and steady recovery in the housing market. Lennar rose 1.31, or 4.8%, to 28.70 amid a broad rally in homebuilder stocks that included KB Home, D.R. Horton and Hovnanian Enterprises.

Separately, a report showed U.S. durable goods orders posted their first gain in three months in May, suggesting that the U.S. manufacturing sector stabilized a bit after an early spring slowdown. The gain of 1.1% was better than an expected 0.4% increase, though April's reading was revised lower.

The positive U.S. economic readings allowed investors to push stocks higher, even as expectations remain relatively modest for a summit of European leaders, scheduled for Thursday and Friday in Brussels.

"It's a long and winding negotiation, and it depends on charisma and persuasiveness of the leaders and how they can circle back to their constituents...Everyone needs to give and take," said Virginie Maisonneuve, London-based head of global equities for asset manager Schroder Investment Management PLC.

Investors, Ms. Maisonneuve added, will be watching for subtle cues about leaders' willingness to work together. "If we have Mr. Hollande telling Merkel that she's getting in the way and we have more signs of fighting, it's not going to help at all," she said.

European measures moved higher. The Stoxx Europe 600 finished up 1.4% and France's CAC-40 index rose 1.7% to snap four-day losing streaks. Asian stocks finished Wednesday's session mostly higher, led by a 1% rally by Hong Kong's Hang Seng Index.

In other assets, crude oil futures gained 1.1% to $80.21 a barrel, while gold futures edged up 0.2% to settle at $1,577.50 an ounce. The U.S. dollar rose against the Japanese yen but fell against the euro. Demand for Treasurys edged up, sending the yield on the benchmark 10-year note slightly lower, to 1.619%.

In corporate news, O'Reilly Automotive was the worst performer on the S&P 500, tumbling 13.83, or 14%, to 82.61 after it said it expects its second-quarter earnings to be at the low end of its prior estimates, as the auto-parts retailer also lowered its same-store sales guidance. Competitor AutoZone dropped 17.49, or 4.7%, to 359 while Genuine Parts, another rival, lost 1.62, or 2.7%, to 58.53.

AeroVironment advanced 67 cents, or 2.6%, to 26.11 after fourth-quarter earnings benefited from an increase in unmanned aircraft revenue and issued an upbeat outlook for the new fiscal year.

EQT Midstream Partners, the first public listing to price since Facebook last month, jumped 2.75, or 13%, to 23.75 on its debut. The company is the pipeline operator for natural-gas company EQT, which rose 2.11, or 4.1%, to 53.83.

(END) Dow Jones Newswires

June 27, 2012 16:23 ET (20:23 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

Previous Stories
28/06/2012 6:07AM DJIA Rises 92.41 (0.74%) to 12627.08; J.P. Morgan Chase, Bank of America Lead (headline only)
28/06/2012 6:07AM S&P 500 Gains 11.86 (0.90%) To 1331.85; Energy, Financials Climb (headline only)
28/06/2012 6:06AM US Stocks Finish Higher for Second Straight Day (headline only)

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