Stock Market News for August 18, 2010 - Market News

A slew of better-than-expected economic data and activity on the mergers and acquisitions front boosted investors’ confidence yesterday, sending the Dow industrials into the positive territory for the year, even as Wal-Mart Stores and Home Depot reported upbeat earnings numbers.

Material stocks rose after Potash Corp. (NYSE:POT) rejected mining giant BHP Billiton’s (NYSE:BHP) unsolicited $38 billion takeover bid. Potash’s shares soared 27.7% while shares in Mosaic (NYSE:MOS) and Agrium (NYSE:AGU), the companies that compete with Potash, jumped 8.7% and 4.6%, respectively. Earlier in the week, technology shares had strengthened after Dell (NASDAQ:DELL) said it had agreed to acquire data-storage firm 3Par (NYSE:PAR).

This morning’s stock futures suggest stocks would open with moderate gains, helped by Target Corp.’s better-than-expected earnings report. Ahead of the opening bell, the Dow futures were up 14 at 10,372. Standard & Poor’s 500 index futures fell 1.20 to 1,090.20. Nasdaq 100 futures fell 3.20 to 1,836.20.

Gains were broad based yesterday, with only two of the thirty Dow components closing the day in the red. The average, now up 0.21% year-to-date, gained 104-points, or 1.01%, to finish at 10405.85. The tech-heavy Nasdaq Composite index climbed 1.3% to 2209.44 and the broader S&P 500 index gained 1.2% to 1092.54. The S&P’s move beyond its 50-day moving average suggested some optimism was returning to the stock market.

Home Depot (NYSE:HD) led the gainers on the DJIA, up 3.4%. The company reported second-quarter earnings that inched above estimates. However, sales were below projections. The miss was, however, slight. Nevertheless, Home Depot and Wal-Mart’s (NYSE:WMT) decent earnings were seen as signs of normalcy returning to the economy. Wal-Mart (NYSE:WMT) which reported slightly better earnings and a modest revenue miss saw strength in its shares as it increased guidance for the year.

Companies that derive a fair share of revenues from overseas operations saw strength in their stocks as the euro strengthened against the dollar. Shares in Alcoa (NYSE:AA) jumped 3.3%, DuPont (NYSE:DD) rose 2.6% and Boeing (NYSE:BA) were up 2.5%. The strength in euro was built on well-received bond auctions in Spain and Ireland.

All ten S&P500 industry sectors managed gains on the day, with nine registering gains of more than 1% on the day. BHP Billiton’s (NYSE:BHP) unsolicited bid for Potash sent the basic materials shares (+2.5%) to the top of the gainers list. Industrials (+1.9%) gained on a favorable industrial production data. Oil and gas shares (+1.5%) gained as crude prices rose 53 cents to $75.77, but prices remained below the $80 level on growth concerns in the US and China.

Hopes that the housing market was slowly moving toward stabilization sent shares in Beazer Homes (NYSE:BZH) up 4.1%, Pulte Group (NYSE:PHM) 3.8%, and Hovnanian (NYSE:HOV) 3.4%.

Firms reporting their results today include Target (NYSE:TGT), Deere (NYSE:DE), Applied Materials (NASDAQ:AMAT), Limited (NYSE:LTD), and BJ Wholesale (NYSE:BJ).

Stock Market News for August 18, 2010 – Market News

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