Stock Market News for October 26, 2010 - Market News

U.S. stocks rose to their highest level since April amid renewed hopes that the Fed would soon initiate steps to stimulate economic growth. A jump in commodity prices, aided by a falling dollar, also helped push stocks higher and the blue-chip Dow average closed at its highest level since late April.

Twenty-three of the 30 DJIA components ended in the green as the index gained 31 points, or 0.3%, to close at 11,164, its highest close in almost six months. The technology-laden Nasdaq Composite index gained 11.46 points, or 0.5%, to 2490.85. The broader S&P’s 500-stock index edged up 2.54 points, or 0.2%, to 1185.62. On the New York Stock Exchange more than 1 billion shares exchanged hands as advancing issues beat those that fell in price by a three-to-two margin.

Doubts about financial companies’ foreclosure practices kept financials under check. JP Morgan (NYSE:JPM) fell 1.7% and Bank of America (NYSE:BAC) closed off 2.5%. The KBW Bank Index dropped 1.0%. Utilities and financials were the only two S&P 500 industry sectors that closed in the red yesterday. The greenback’s recent downward spiral continued unabated as G20 finance leaders agreed to avoid a currency conflict. Meanwhile, a Goldman Sachs (NYSE:GS) report noted the Fed would likely purchase up to $2 trillion in US government bonds.

The US dollar closed off 0.3% against a basket of currencies to finish at 77.21; the dollar dropped to a 15-year low against the Japanese yen during the day’s trading. And as the dollar weakened, crude prices shot up, rising 1% to $82.52 per barrel. Gold strengthened $13.80 to $1,338.90.

An increase in existing home sales sent homebuilder shares higher in early trading. However, after early gains, homebuilder shares were mixed with Beazer Homes (NYSE:BZH) closing up 2.2% and DR Horton (NYSE:DHI) up 0.7%. Shares in Ryland Group (NYSE:RYL) fell 1.3%, while Lennar (NYSE:LEN) gained 0.5% and Toll Brothers (NYSE:TOL) fell 1.3%.

Reports that Warren Buffet-led Berkshire Hathaway (NYSE:BRKA) had decided against trimming its holdings in Kraft (NYSE:KFT) sent shares in the company up 1.8%. Kraft, along with DuPont (NYSE:DD), up 1.9%, led the DJIA higher. Shares in Disney (NYSE:DIS) advanced 1.4% as consumer discretionary issues rose 0.5%. Materials stocks led the S&P500 industry sectors higher, rising 1.8%. Alcoa (NYSE:AA) climbed 1.3%.

An article in the Wall Street Journal said Bank of America (NYSE:BAC) had admitted to errors in its foreclosure processing. Dealing a further blow, FDIC Chairwoman Sheila Bair noted the regulator is investigating allegations of foreclosure fraud. And Fed Chairman Bernanke said that US regulators were “intensively” investigating banks’ foreclosure practices.

Regional banks took a hit. SunTrust (NYSE:STI) closed off 2.6%, Comerica (NYSE:CMA) fell 2.8%, Wells Fargo (NYSE:WFC) dropped 1.5%, and Regions Financial (NYSE:RF) closed off 1.4%. However, Citigroup (NYSE:C) shares jumped 2.4% after Goldman Sachs (NYSE:GS) added the stock to its Conviction Buy List, noting lowered government ownership would boost the stock.

After the market closed, tech heavyweight Texas Instruments (NYSE:TXN) reported better-than-expected earnings of $0.71, beating estimates of $0.69 on a 29.9% revenue surge to $3.82 billion, above estimates of $3.77 billion.

Stock Market News for October 26, 2010 – Market News

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