Upbeat economic news and a strengthening euro convinced investors to send stocks higher Thursday and helped the Dow average close above the 10,000 mark for the first time this week. European debt fears somewhat dissipated as Spain saw solid demand for a new 3-year benchmark bond. All major indexes closed with gains of at least 2.5%.
After hitting a 14-year low the previous day, BP (NYSE:BP) shares surged 12.3% on reports PetroChina was considering a bid for the company. Anadarko Petroleum (NYSE:APC), which has a 25% stake in the ill-fated rig, rebounded 12.4%. Crude prices surged past $75 per barrel, propelling energy shares, as the Energy Administration raised is 2010 global demand expectations for oil.
ECB President Jean-Claude Trichet’s remarks that the central bank will continue purchasing eurozone government bonds sent the shared currency higher, even as a German constitutional court quashed a lawsuit seeking to block Germany’s participation in eurozone guarantees.
This morning’s stock futures suggest a weak opening after a surprise drop in retail sales. Ahead of the bell, the Dow Jones industrial average futures fell 54 points, or 0.5%, to 10,033. Standard & Poor’s 500 index futures dropped 6.90 points, or 0.6%, to 1,072.60, while Nasdaq 100 index futures dropped 5.75, or 0.3%, to 1,815.25.
The Dow Jones industrial average closed with a 273-point, or 2.8%, gain, and in the process went past the psychologically-significant 10,000 mark. Ending a four-day losing streak, the tech-heavy Nasdaq closed with gains of 2.8% to 2,219. However, the index is still down 12.3% from highs reached in April. The S&P500 jumped almost 3% to 1,087, but is down 10.7% drop from its April highs. Market breadth was positive. On the New York Stock Exchange, winners beat losers seven to one on volume of 1.3 billion shares.
As equity prices advanced, safe-haven plays lost their appeal. The benchmark 10-years fell 1 8/32 in price as its yield increased to 3.325%. Gold prices eased $7.70 to $1,222. The dollar index, which tracks the USD against a basket of six major currencies, eased modestly, as the euro rose 1.2% to $1.213 from $1.198 late Wednesday. The CBOE Vix, “fear factor” index, dropped 9.37% to 30.57, but continued to pace investor anxiety at levels nearly twice April 20 lows of 15.73.
All ten S&P 500 industry sectors closed with the gains. Oil and gas shares led the chart with gains of 4.9%. DJIA component Chevron (NYSE:CVX) rose 4.8%. Basic material shares jumped 4.1% on increased global growth assumptions, and higher industrial metals complex prices. Alcoa (NYSE:AA) rose 4.2%. Industrial shares advanced 3.5%, with Caterpillar (NYSE:CAT), another DJIA component, advancing 5.5%. Financials advanced 3.4% but failed to take Goldman (NYSE:GS) along, which dropped 2.8% to a 52-week low on reports of another SEC probe into company’s handling of CDO.
