North Korea Completes Missile Launch Tower

By SIMON MARTIN AGENCE FRANCE-PRESSE
Published: 17 Feb 2011 17:36

       

Stocks end at fresh multi-year highs

Dow Jones industrial average (INDU) edged up 30 points, or 0.2%, with 21 of the Dow's 30 components heading higher. Shares of Intel (INTC, Fortune 500) led the advance, while American Express (AXP, Fortune 500) lagged.

The S& P 500 (SPX) rose 4 points, or 0.3%, with Sears Holding (SHLD, Fortune 500) leading the way. Meanwhile, the Nasdaq (COMP) ticked up 6 points, or 0.2%, with Research in Motion (RIMM) among the biggest gainers.

All three of the major indexes finished the session at their highest levels in more than two years for a second day on Thursday.

Investors have been in a bullish mood so far this year, as the outlook for the U.S. economy improves. While inflationary concerns are now creeping into the picture -- with key readings on inflation this week showing that prices are rising more than expected -- investors remain assured that the Federal Reserve remains willing to step in if conditions deteriorate.

" Inflation has been the story du jour lately, and there's definitely a concern about the rising cost of commodities and how that's going to affect the margins of companies," said Tyler Vernon, CIO of Biltmore Capital.

" But at the same time, the Fed continues to be focused on the stock market and supporting the market. So at this point any news is good news, because investors are just thinking the Fed will step back in if things start slowing down," he added.

Economy: The consumer price index for January rose 0.4% month-to-month seasonally adjusted, compared to expectations of a 0.3% increase. The core CPI -- which excludes food and energy prices -- rose 0.2% month-to-month, compared to an expected increase of 0.1%.

The report follows on the heels of the government's Producer Price Index, a measure of wholesale inflation, which came out Wednesday. That index rose 0.8% in January, which was also larger than expected.

" Inflation is definitely out there, with both reports coming in hotter than expected," said Vernon.

Because the Producer Price Index is rising at a faster pace than the consumer price index, this indicates that companies aren't passing on the cost of raw materials to consumers, which Vernon said is a concern as companies' margins start to shrink.

In fact, 25% of companies in the S& P 500 that have reported earnings this season had lower margins because of rising commodity costs, he added.

Not only do rising prices hurt companies' margins, it means that the Federal Reserve may eventually be unable to continue propping up the economy with its policy of quantitative easing, he said.

" In the short term that's good news for stocks as investors get out of fixed income and look for a home in stocks, but in the longer term it represents issues, because investors are looking at the fact that if we're getting inflation, the Fed can't continue its process of of supporting the market."

Meanwhile, the government's weekly report on the number of people filing for jobless benefits jumped to 410,000 for the week ended Feb. 12, which was close to expectations. The report was expected to show an uptick to 408,000, from 383,000 in the previous week.

The preliminary Philadelphia Fed index, a regional reading on manufacturing, surged to 35.9 in February from 19.3 in January. The index was forecast to rise modestly to 21.

Keith Springer, president of Springer Financial Advisors, said the balance of good news like the Philadelphia Fed Index and weaker news like the report on jobless claims provides " a Goldilocks environment where the economy is not growing too fast to make the Fed stop the easing but not slow enough to give us a double dip." And this is what will help the momentum continue, he said.

Currencies and commodities: The dollar rose modestly against the Japanese yen, the British pound, and the euro.

Barber said the devaluing of the dollar through the Fed's quantitative easing is not only boosting the stock market, but causing commodity prices to climb.

" Prices aren't increasing because of increased demand -- the Fed is pumping so much money into the system and purposely devaluing the dollar, and that's where inflation is coming from," said Barber. " People are buying gold, gold, gold, and things like wheat, corn and cotton have all been driven higher too."

Gold futures for April delivery rose $10 to settle at $1,385.10 an ounce. Oil for March delivery gained $1.37 to settle at $86.36 a barrel.

The World Bank said in its latest report on the global food crisis that its price index jumped 15% between last October and last month, hovering just below its 2008 peak. Wheat, corn, sugar, fats and oils have led the price increases.

Companies: Redbox is planning a subscription movie streaming service to compete with Netflix (NFLX), according to news reports. Shares of Coinstar (CSTR), Redbox's parent company, gained nearly 8%.

Shares of Timberland (TBL) surged 30% after the outdoor goods maker logged a jump in fourth-quarter profit that widely beat economists' expectations.

Weight Watchers International (WTW) also reported a solid quarter, posting earnings per share that blew past expectations. Shares of the weight loss company soared more than 45%. The better-than-expected earnings also benefited NutriSystem (NTRI), with shares of the company rising more than 6%.

Shares of Dr. Pepper Snapple Group (DPS, Fortune 500) rose 6% after the soft drink company reported an 11% jump in earnings per share. The company's net sales rose to more than $1.4 billion.

Shares of Williams Partners (WMB, Fortune 500) -- a company focused on natural gas transportation, processing and storage -- jumped 8% after the company said it would hike its dividend and split into two entities. The company also raised its guidance for 2011-2012.

The stock price for Cliffs Natural Resources (CLF) climbed more than 7% after the company reported that it doubled its full-year revenue to $4.7 billion.

World markets: European stocks finished little changed. Britain's FTSE 100 was flat, the DAX in Germany edged lower by 0.1% and France's CAC 40 was barely above breakeven.

Asian markets ended higher. The Shanghai Composite edged higher 0.1%, the Hang Seng in Hong Kong rose 0.6% and Japan's Nikkei ticked up 0.3%.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 3.58% from 3.62% late Friday.   

Stocks take worst hit in 2 weeks

The Dow Jones industrial average (INDU) lost 42 points, or 0.3%, with Exxon Mobil (XOM, Fortune 500), Boeing (BA, Fortune 500) and Alcoa (AA, Fortune 500) leading the blue-chip index's decline.

The S& P 500 (SPX) fell 4 points, or 0.3%. NYSE Euronext (NYX, Fortune 500) -- the parent company of the New York Stock Exchange -- was one of the biggest losers on the index. Shares dropped 3.4% after the company announced it agreed to merge with Germany's Deutsche Boerse -- creating the world's largest exchange group.

The Nasdaq (COMP) slipped 13 points, or 0.5%, with a 2.7% drop in shares of Netflix (NFLX) weighing on the tech-heavy index. The losses came a day after the online movie rental company's stock rose to an all-time high. Chipmaker Qualcomm (QCOM, Fortune 500) said Monday it is developing a new platform, to bring Netflix and other video streaming services onto Google (GOOG, Fortune 500) Android-enabled smartphones.

It was the worst performance for all three indexes since Jan. 28.

The broad selling pressure came after the government reported that retail sales slowed in January, as consumers primarily focused on paying for groceries and gasoline.

Stocks ended Monday's session mixed, as investors mulled over President Obama's 2012 budget proposal in a quiet trading session. The $3.7 trillion budget request would cut the nation's long-term deficit by about $1.1 trillion, over the next 10 years.

The market has been moving gradually higher this year, amid expectations of an improving economy. The S& P 500 is up nearly 6% so far in 2011.

" This market has proven to be extremely resilient, and I think it still has more upside to it," Ghriskey said.

Economy: The Commerce Department said retail sales rose 0.3% in January, down from an increase of 0.5% in December. Sales were expected to have gained 0.5% in January, according to consensus estimates from economists surveyed by Briefing.com.

Sales excluding autos and auto parts also rose to a weaker-than-expected 0.3% -- compared to a 0.5% increase in ex-auto sales in December. Economists had forecast a rise of 0.6% in the measure for January.

The price index for U.S. imports increased 1.5% in January, the U.S. Bureau of Labor Statistics stated. The report cited higher prices for fuel and nonfuel imports as contributors to the advance. U.S. export prices rose 1.2% in January, following increases of 1.5% in November and 0.6% in December.

A separate report from the government showed that business inventories rose 0.8% in December, after edging up 0.2% the previous month. Economists were expecting inventories to increase 0.6%.

The National Association of Homebuilders' preliminary housing market index for February held steady at 16, missing expectations to rise to 17.

Companies: Sirius XM Radio (SIRI) reported a loss of 2 cents per share in the fourth quarter, and issued a 2011 sales outlook that was slightly below analysts' expectations. Shares fell 8.2%.

Hotel chain Marriott (MAR, Fortune 500) announced late Monday its plans to split into two separate, publicly traded companies. Under the plan, Marriott will spin off its timeshare operations and development business as a new independent company. Shares were up 1.1%.

Shares of Dell (DELL, Fortune 500) rallied more than 6% after the closing bell. The company posting fourth-quarter results that showed earning per share of 53 cents, beating expectations, and $15.69 billion in sales, which came in slightly below expectations. For the current year, Dell issued an upbeat guidance, saying it expects sales to rise between 5% and 9%.

World markets: European stocks closed mixed. Britain's FTSE 100 fell 0.4%, while the DAX finished slightly higher and France's CAC 40 added 0.3%.

China's consumer price index rose 4.9% in January, up slightly from 4.6% growth in December, according to data released by the Chinese government Tuesday morning.

Asian markets ended mixed. The Shanghai Composite was flat and the Hang Seng in Hong Kong slid nearly 1%, while Japan's Nikkei added 0.2%.

Currencies and commodities: The dollar fell against the euro and and the British pound, but was higher versus the Japanese yen.

Oil for March delivery fell 49 cents to $84.32 barrel.

Gold futures for April delivery rose $9 to $1,374.10 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury was unchanged, with the yield at 3.62%. 

Stocks end quietly after Obama's budget plan

The Dow Jones industrial average (INDU) fell 5 points, or less than 0.1%, to 12,268 the S& P 500 index (SPX) gained 3.2 points, or 0.2%, to 1,332 and the Nasdaq Composite (COMP) rose 7.7 points, or 0.3%, to 2,817. 

Exxon Mobil (XOM, Fortune 500), Chevron (CVX, Fortune 500) and Alcoa (AA, Fortune 500) were among the top performers on the Dow, helped by a Chinese trade balance report that showed a 51% jump in imports last month for the world's now second-largest economy. Copper futures also climbed 2.1% during the session.

" Commodities, along with the long-term inflation story, continue be the primary support for this market," said Liz Ann Sonders, Charles Schwab's chief investment strategist.

Wal-Mart (WMT, Fortune 500) and Verizon (VZ, Fortune 500) were the biggest losers on the blue-chip index.

President Obama unveiled his administration's $3.7 trillion budget proposal, which will cut the nation's long-term deficit by about $1.1 trillion over the next 10 years.

Traders however said there was little for Wall Street to react to in the White House's proposal.

" The budget is not going to have a meaningful impact on equities," said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. " A lot of this was known well in advance."

Stocks hit multi-year highs and ended the week strong on Friday, as investors cheered the resignation of Egyptian President Hosni Mubarak.

For the week, the three major indexes closed 1.5% higher. The Dow and the S& P ended Friday's session at their highest levels since mid-June 2008.

Economy: With no reports on the domestic economy, stocks will probably have a " sideways performance," said Peter Cardillo, chief market economist with Avalon Partners.

Congress will hold budget hearings throughout the week, and investors are likely to focus their attention on deficit levels.

Companies: Shares of Emergency Medical Services (EMS). plunged 11%, after private equity firm Clayton, Dubilier & Rice announced plans to buy the company for $3.2 billion.

FedEx (FDX, Fortune 500) and UPS (UPS, Fortune 500) shares fell 1% in aftermarket trading after FedEx lowered its third-quarter outlook, citing the bad weather that plagued most of the nation this year and higher fuel costs.

Shares of General Electric (GE, Fortune 500) rose 0.8%, after the industrial conglomerate said it would purchase an oil-and-gas engineering company for $2.8 billion.

Shares of Green Mountain Coffee Roasters (GMCR) rose 7% on heavy volume after Starbucks (SBUX, Fortune 500) confirmed it was working on creating branded single-brew coffee products, but declined to say if it was working on a separate product or a partner. Green Mountain, with its Keurig cup system, is the largest producer of single-serve coffee products.

Netflix (NFLX) shares rose 7%, after the company's stock was upgraded by two investment firms. Shares also got a boost after chipmaker Qualcomm (QCOM, Fortune 500) said at an industry conference that it planned to bring streaming video onto Google Android-enabled smart phones.

Internet radio site Pandora filed late Friday to raise up to $100 million in an initial public offering.

World markets: European stocks ended mixed. Britain's FTSE 100 was little changed, France's CAC 40 eased 0.1% and Germany's DAX rose 0.3%.

As expected, China overtook Japan as the world's second-largest economy. According to government statistics, Japan's economy was valued at $5.47 trillion dollars in 2010, while China was at $5.88 trillion.

China's trade surplus shrunk to $6.5 billion in January, with exports rising 37.7% and imports rising 51%, according to news reports.

Asian markets ended higher. The Shanghai Composite jumped 2.4%, the Hang Seng in Hong Kong added 1.3% and Japan's Nikkei gained 1.1%.

Currencies and commodities: The dollar rose against the euro and the British pound, but eased versus the Japanese yen.

Oil for March delivery settled down 63 cents to $84.95 a barrel.

Gold futures for April delivery rose $4.70 to $1,365.10 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 3.61% from 3.64% late Friday.   

Dow ends higher for 8th-straight day

After spending most of the day in the red, the Dow Jones industrial average (INDU)managed to add 7 points, or 0.1%, led by a 5% jump in shares of Walt Disney Co. (DIS, Fortune 500) following strong fourth-quarter earnings. The blue-chip index rose to 12239.89, the highest level since June 16, 2008.

The S& P 500 (SPX) slipped 4 points, or 0.3%, and the tech-heavy Nasdaq (COMP) fell 8 points, or 0.3%.

Energy and financial companies were among the biggest laggards. Chevron (CVX, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Exxon Mobil (XOM, Fortune 500) were among the Dow's biggest losers. Meanwhile, drops in shares of Southwestern Energy Co. (SWN), Cliffs Natural Resources (CLF) andWells Fargo (WFC, Fortune 500) weighed on the S& P 500.

Investors directed their attention to Capitol Hill, as Federal Reserve Chairman Ben Bernanke testified before the House Budget Committee. The central bank chief said that despite a strengthening economic recovery, the unemployment rate remains high while inflation is " still quite low."

Bernanke also told lawmakers that they need a " credible program" to reduce the nation's growing deficit.

Stocks posted solid gains Tuesday, with the Dow ending at its highest level since June 2008, as traders cheered news in the consumer sector and looked past China's latest interest rate hike.

Economy: Investors will be keeping an eye out for a proposal due Friday from the Obama administration recommending a phase-out plan for Fannie Mae and Freddie Mac, two government-sponsored mortgage backers.

The highly anticipated " white paper" will include three different options for reducing the role government plays in the mortgage market, according to a White House official.

Treasury Secretary Tim Geithner offered an optimistic economic outlook Wednesday, although he acknowledged that the job market will take time to recover.

Companies: Shares of NYSE Euronext (NYX, Fortune 500) -- the parent company of the New York Stock Exchange -- jumped 14% after the company confirmed that it is in advanced merger talks with Germany's Deutsche Boerse.

Polo Ralph Lauren's (RL, Fortune 500) stock rallied 8.3%, after the retailer delivered a $168.4 million profit -- thanks to solid holiday season sales.

Computer Sciences (CSC, Fortune 500) plunged 14% after the information-technology company missed revenue estimates and lowered its forecast for the year.

Shares of Wells Fargo (WFC, Fortune 500) fell 2.8% after the bank announced late Tuesday that chief financial officer Howard Atkins is retiring. The company said the retirement wasn't due to Wells' financial condition or reporting.

Shares of Cisco Systems (CSCO, Fortune 500) slipped 1.3% in after-hours trading after the company posted a quarterly profit that fell from year-ago results but beat Wall Street's forecasts.

World markets: European stocks ended the session lower. Britain's FTSE 100 slid 0.6%, the DAX in Germany was flat and France's CAC 40 edged down 0.4%.

Asian markets ended below breakeven, in reaction to China's central bank raising key interest rates the day before. The Shanghai Composite fell 0.9%, the Hang Seng in Hong Kong lost 1.4%, and Japan's Nikkei slid 0.2%.

Currencies and commodities: The dollar was slightly lower versus the euro, but rose against the Japanese yen and the British pound.

Oil for March delivery fell 23 cents to settle at $86.71 a barrel.

Gold futures for April delivery rose $1.40 to settle at $1,365.50 an ounce.

Corn futures jumped 3.6% to $6.98 a bushel after a report from the U.S. Department of Agriculture cut its forecast for reserves of the grain by four times as much as the market had expected. Wheat and soybean futures also rose.

Bonds: The price of the benchmark 10-year U.S. Treasury was higher Wednesday, pushing the yield down to 3.64%. 

Stocks post broad gains, led by consumer names

The Dow Jones industrial average (INDU) gained 72 points, or 0.6% to 12,233, the S& P 500 (SPX) rose 5.2 points, or 0.4%, to 1,324.6 and the Nasdaq (COMP) composite advanced 13 points, or 0.5%, to 2,797.

The blue chips were led higher by shares of McDonald's (MCD, Fortune 500), which climbed 2.6% after the fast food giant reported better-than-expected January same-store sales. Other consumer discretionary names in the S& P 500 posted solid gains including Urban Outfitters (URBN), Family Dollar (FDO, Fortune 500) and JCPenney (JCP, Fortune 500) among others.

The Dow's 70-point gain came despite the People's Bank of China announcement early Tuesday that it would raise bank's borrowing and lending rates by a quarter percentage point. The move, the bank's third since October, comes as Chinese policymakers look to gradually cool the world's second-largest economy without halting growth.

" The China rate hike wasn't a surprise, but it shows that they're being proactive about curbing inflation," said Frank Davis, director of sales and trading at LEK Securities.

Outside of the China news, traders had little to act upon. Without any major negative news, traders said stocks will probably continue to float slowly higher. The Dow has been up six of the last seven sessions and 10 of the last 12 sessions.

" There's been this general optimism pushing the market right now that has been difficult to overcome," said Marc Pado, chief market strategist for Cantor Fitzgerald. " Retail investors are coming back, money is returning from overseas and it's frustrating investors who've wanted to short this market."

Investors started the week in high spirits Monday, as several major mergers pushed the Dow Jones industrial average (INDU) up for a sixth day in a row. The 30-stock index closed up 69 points, or 0.6%.

The deals of the day included AOL's (AOL) acquisition of news blog The Huffington Post for $315 million, and a merger between oil drillers Ensco (ESV) and Pride International (PDE).

Companies: Toyota shares advanced 4% after a 10-month U.S. government probe found no electronic flaws in the automaker's safety systems, which were blamed for unintended acceleration in Toyota cars and trucks.

Toyota also issued an upbeat financial forecast with three months left in its fiscal year.

Avon Products (AVP, Fortune 500) shares fell 3% after the company reported a 15% decline in quarterly earnings, missing estimates.

Kindred Healthcare (KND, Fortune 500) shares jumped more than 28% after it received a $900 million buyout offer from competitor RehabCare Group (RHB).

Walt Disney (DIS, Fortune 500) shares rose 4% in after-market trading after the media giant reported adjusted earnings of 68 cents a share, well above analysts' estimates.

World markets: European stocks closed higher. Britain's FTSE 100 rose 0.7, France's CAC 40 added 0.4% and the DAX in Germany ticked up 0.5%.

Asian markets ended mixed. Japan's Nikkei rose 0.4%, while the Heng Seng in Hong Kong fell 0.3%. Shanghai was closed one more day for the lunar new year holiday.

Currencies and commodities: The dollar fell against the euro, but gained versus the British pound and Japanese yen.

Oil for March delivery closed down 54 cents to $89.94 a barrel.

Gold futures for April delivery rose $15.90 to $1,364.10 a troy ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.66% from 3.65% from Monday.

The U.S. government auctioned $32 billion in 3-year notes, which received mixed demand from investors. The notes auctioned at a yield of 1.349%, slightly higher than expected. 

Stocks rally on Merger Monday

At the closing bell, the Dow Jones industrial average (INDU) was up 69 points, or 0.6% the S& P 500 (SPX) rose 8 points, or 0.6% and the Nasdaq (COMP) gained 15 points, or 0.5%.

The biggest deals of the day include AOL's (AOL) acquisition of news blog The Huffington Post for $315 million, and a merger between oil drillers Ensco (ESV) and Pride International (PDE).

The diversified manufacturing company Danaher (DHR, Fortune 500) will also buy medical device maker Beckman Coulter (BEC) for $6.8 billion.

" Investors are coming in with the attitude, if these business leaders are confident enough to buy other companies, then I'm confident enough to buy stocks," said Jack Ablin, chief investment officer with Harris Private Bank in Chicago.

Shares of Pride and Beckman Coulter both surged Monday, following the news.

Investors welcomed the Danaher-Beckman Coulter deal as a strong sign for the biomedical industry. Danaher's $5.8 million offer valued Beckman Coulter at a 45% premium.

" We haven't seen too many health care deals, particularly ones done at a premium to market value," Ablin said. " Perhaps this could be a spark to get that sector moving."

Meanwhile, the AOL-Huffington Post deal boosted shares of other media companies. The New York Times (NYT) climbed 2.5% and Gannett (GCI, Fortune 500) shares rose 2.8%.

Economy: In a speech to more than 200 members of the U.S. Chamber of Commerce Monday, President Obama made the case for ramping up spending on education and infrastructure to promote economic growth. The speech is seen as another sign of the thawing relationship between the administration and business community.

A report by the Federal Reserve showed consumer credit rose more than expected in December, climbing by a seasonally adjusted $6.1 billion in December, after increasing by $2 billion the previous month.

Companies: In addition to some major deals, company earnings were also market movers.

Humana (HUM, Fortune 500) fell 3.1% after the health benefits provider reported fourth-quarter earnings that missed analysts' expectations. The company said it earned 63 cents per share, versus a forecast of 81 cents.

Hasbro (HAS) said its fourth-quarter earnings fell to 99 cents per share from $1.09 a year ago, but its shares rose 1.9%.

U.S.-listed shares of Nokia (NOK) were up 2.1% following reports that a management shake-up is brewing at the Finnish cellphone company.

Sysco (SYY, Fortune 500) said its second-quarter earnings fell 3.8% due to higher commodities prices, sending shares of the food company falling 6.1%.

World markets: European stocks finished the day higher. Britain's FTSE 100 ticked up 0.9%, the DAX in Germany rose 0.9% and France's CAC 40 gained 1.1%.

In Asia, Japan's Nikkei ended nearly 0.5% higher, while the Hang Seng in Hong Kong slipped 1.5%. Shanghai remained closed for lunar new year celebrations.

Currencies and commodities: The dollar fell against the British pound and the euro, but rose against the Japanese yen.

Oil for March delivery fell $1.55 to settle at $87.48 a barrel.

Gold futures for April delivery fell 80 cents to settle at $1,348.20 an ounce on the Chicago Mercantile Exchange.

Three-month copper futures hit $10,160 per ton on the London Metal Exchange, a record high.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.65% from 3.58% late Friday.   

Dow, S& P 500 close at highest levels in 2 years

The Dow Jones industrial average (INDU) rallied 148 points, or 1.3%, to finish at 12,040, the highest June 19, 2008.

All but three of the 30 blue-chip components moved higher. A 5.5% jump in shares of Pfizer (PFE, Fortune 500) led the advance, with the drugmaker posting better-than-expected fourth-quarter earnings. Alcoa (AA, Fortune 500) and Bank of America (BAC, Fortune 500) were also big Dow gainers.

The S& P 500 (SPX) added 21 points, or 1.7%, to close at 1,307, also the highest since June 2008. Shares of printer manufacturer Lexmark (LXK) soared more than 13% following strong earnings and an upbeat forecast.

The Nasdaq (COMP) gained 51 points, or 1.9%. Baidu (BIDU) was the tech-heavy index's big winner, with shares spiking more than 9%. China's main Internet search provider said its fourth-quarter profit nearly tripled from a year earlier, to $176 million.

Chinese online media firm Sohu.com (SOHU) also jumped more than 6%, a day after reporting strong earnings.

Much stronger-than-expected manufacturing data added fuel to the buying spree.

" Economic data remains fairly positive and quarterly earnings are coming out strong across the board," said Rob Lutts, chief investment officer at Cabot Money Management. " Those are having a big impact and driving expectations higher."

U.S. stocks posted solid gains Monday and ended January about 2% higher, as positive earnings from Exxon Mobil (XOM, Fortune 500) and rising commodity prices overshadowed the political unrest in Egypt. The Dow finished the month 2.7% higher, representing the first January gain since 2007, and the best first-month performance since 1997.

Economy: Construction spending dropped 2.5% in December, following a rise of 0.4% in November. Economists were expecting spending to ease 0.4% during the month.

General Motors (GM) kicked off the year with stronger-than-expected sales in January, driven by increased demand from individual customers. GM stock was slightly higher.

In Washington, the Senate Budget Committee kicked off three days of hearings on the economic outlook, tax reform and challenges to the economic recovery.

Companies: Before the opening bell, United Parcel Service (UPS, Fortune 500) logged a 44% jump in profit that beat forecasts and said it expects earnings per share to climb to a record high for 2011. Shares of the package delivery company finished up 4.2%.

Shares of Borders (BGP) plunged more than 35% in the final minutes of trading following a Bloomberg report that the bookseller may file for bankruptcy protection as early as next week. The report, which cited people familiar with the matter, also said several private equity firms are considering whether to provide a junior loan to the company, which will likely close at least 150 stores.

World markets: Protests in Egypt resumed Tuesday and tensions were still far from resolved, with Standard & Poor's announcing it cut Egypt's foreign currency rating. The news came a day after Moody's downgraded its rating on Egypt's debt.

But some investors think the fears that sparked a sell-off in the stock market late last week may have been overblown and the situation is beginning to stabilize.

Egyptian President Hosni Mubarak has decided not to seek re-election, a senior U.S. official involved in the Obama administration's deliberations on Egypt said Tuesday afternoon.

" Investors are realizing that while there are still issues in Egypt and across the Middle East, they will likely be resolved," Lutts said. " For now, we're gravitating back to the reality that the U.S. economy is recovering."

European stocks gained Tuesday. Britain's FTSE 100 and France's CAC 40 rallied 1.6%, and the DAX in Germany rose 1.4%.

Asian markets ended higher. The Shanghai Composite edged up 0.3%, the Hang Seng in Hong Kong gained 0.2% and Japan's Nikkei rose 0.4%.

Currencies and commodities: The dollar slumped against the euro, the Japanese yen and the British pound.

Oil for March delivery slipped $1.42 cents to settle at $90.77 a barrel. On Monday, crude prices jumped to their highest level since October 2008, gaining 2.9% to settle at $92.19 a barrel, amid worries about potential disruptions to shipments through the Egypt-controlled Suez Canal.

Gold futures for April delivery gained $5.80 to settle at $1,340,30 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.44% from 3.35% late Friday.   

Dow, S&P end at two-year highs after Fed snoozer

The S&P 500 (SPX) added 5 points, or 0.4%, to close at 1,296, its highest level since August 28, 2008. The broader index had reached as high as 1,299.74, but failed to break above the key resistance level of 1,300. Meanwhile, the Nasdaq (COMP) gained 20 points, or 0.7%.

President Obama's State of the Union address late Tuesday helped push stocks higher from the open.

"The speech last night created a more business-friendly environment," said Michael Sheldon, chief market strategist at RDM Financial Group. "He emphasized working with businesses to promote investment and jobs, whereas a year ago the White House was criticizing financial institutions."

Sheldon said a better-than-expected report showing new home sales jumped to an 8-month high in December also added support.

Later in the day, the Federal Reserve announced its unanimous decision to leave interest rates unchanged near historic lows and continue to move forward with its $600 billion bond buying program to stimulate the economy.

In its first meeting of 2011, the central bank also said it remains cautious about the economic recovery.

"The Fed gave us exactly what we were expecting," said Doug Roberts, chief investment strategist at Channel Capital Research and author of Follow the Fed to Investment Success. "They noted that there has been some improvement in the economy, but high unemployment trumps all of that."

On Tuesday, stocks closed mixed after staging a late comeback.

Companies: Toyota (TM) announced it is recalling more than 1.5 million vehicles worldwide for issues that could result in fuel leakage. News of the recall sent shares of the automaker 1.9% lower.

Shares of home improvement retail chain Lowe's (LOW, Fortune 500) edged up 1.1% after the company said it is cutting 1,700 managerial jobs while adding up to 10,000 part-time workers in order to better staff its stores for weekend shoppers.

Shares of online content creator Demand Media (DMD) rose 33% Wednesday as the company made its public debut, raising $66.5 million in an IPO that valued the company at more than $1 billion. Shares of media conglomerate Nielsen (NLSN) were up 8.7% as the company also made its public debut.

Xerox (XRX, Fortune 500) was the biggest loser on the S&P 500, with shares dropping more than 7%. The company issued a disappointing outlook and announced its Chief Financial Officer Larry Zimmerman will retire next month.

US Airways (LCC, Fortune 500) posted its first quarterly profit since 2006 and widely beat Wall Street forecasts, lifting shares of the airline by 6.6%.

Shares of Yahoo (YHOO, Fortune 500) slipped 2.8% after the company reported quarterly results late Tuesday that missed expectations and announced more layoffs.

Eastman Kodak's (EK, Fortune 500) stock sank almost 18% after the company posted a fourth-quarter profit that plunged 95% from a year earlier. Revenue dropped 25% and missed expectations.

World markets: European stocks closed higher. Britain's FTSE 100 climbed 1%; the DAX in Germany surged 0.9%; and France's CAC 40 rose 0.7%.

Asian markets ended mixed. The Shanghai Composite gained 1.2% and the Hang Seng in Hong Kong edged up 0.2%, while Japan's Nikkei slipped 0.6%.

Currencies and commodities: The dollar edged lower versus the euro and the British pound. It was slightly higher against the Japanese yen.

Oil for March delivery edged up $1.14, or 1.3%, to settle at $87.33 a barrel.

Gold futures for February delivery rose 70 cents to settle $1,330.00 an ounce.

After rallying for seven straight session, cocoa prices softened Wednesday, slipping 0.2% to 3,330 per ton amid a one-month export ban in the Ivory Coast, the world's largest cocoa supplier. Earlier in the session, prices rose 1.5% to 3,385 per ton.

Meanwhile, cotton futures climbed to an all-time high, rising 3.9% to $1.68 per pound.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.43% from 3.32% late Tuesday.  

Dow marches toward 12,000

The Dow Jones industrial average (INDU) closed at 11,980, up 109 points, or 0.9% from the prior trading session.

Meanwhile, the S&P 500 (SPX) gained 7 points, or 0.6%; and the Nasdaq (COMP) rose 28 points, or 1%.

While analysts say a slight pullback could be in the cards soon, companies are reporting strong earnings, which should drive continued positive momentum over the long term.

"American companies are doing quite well, and I think that's going to eventually show up in the employment numbers," said Chad Cunningham, chief investment officer at Iron Horse Capital Management. "If we get any sort of a short-term technical pullback, I think it's a good time to allocate money to U.S. equities."

The rest of the week brings an onslaught of earnings results from blue chip companies, as well as the latest readings on consumer confidence, new home sales and the overall economy. Cunningham said he expects to see slight improvement in all the economic indicators.

Companies: After the bell, American Express (AXP, Fortune 500) reported earnings of 94 cents per share on revenue of $7.32 billion, falling just a hair short of analyst estimates. Its stock fell 1.1% in after-hours trading.

Shares of Amgen (AMGN, Fortune 500) also fell 0.5% in late trading, after the biotech giant announced earnings that barely beat the Street. Earnings from Texas Instruments (TXN, Fortune 500) came in slightly better than expected too, but its stock fell 2.2%.

Earlier during the trading session, RadioShack (RSH, Fortune 500) shares tumbled 11.4% after the electronics retailer forecast a weak fourth-quarter profit and announced its CEO Julian Day plans to retire in May.

The end of the year was tough on electronics retailers, with sales falling below expectations. Last month, Best Buy (BBY, Fortune 500) lowered its outlook for the full year.

JC Penney (JCP, Fortune 500) shares surged 7.2% after the retailer announced it has named prominent hedge fund manager William Ackman and Steven Roth, chairman of Vornado Realty Trust, to its board of directors. JC Penney also said it plans to close six unprofitable stores and continue phasing out its catalog business.

Before the opening bell, Halliburton (HAL, Fortune 500) logged better-than-expected earnings. Shares of the company rose 0.6%.

McDonald's (MCD, Fortune 500) reported earnings in line with expectations. Shares of the fast food chain rose 0.5%.

World markets: European stocks ended their session higher. Britain's FTSE 100 edged up 1.1%, France's CAC 40 rose 0.5% and the DAX in Germany was little changed.

Asian markets ended the session mixed. The Shanghai Composite slid 0.7% and the Hang Seng in Hong Kong fell 0.3%, as Japan's Nikkei ticked up 0.7%.

Economy: There are no major economic reports on tap for Monday.

Currencies and commodities: The dollar rose against the British pound, but fell against the euro and the Japanese yen.

Oil for March delivery slipped $1.24 to settle at $87.87 a barrel.

Gold futures for February delivery rose $2.90 to settle at $1,345.50 an ounce on the Chicago Mercantile Exchange.

Cocoa futures for March delivery jumped 4%, after the Ivory Coast put a one-month ban on cocoa exports.

Bonds: The price on the benchmark 10-year U.S. Treasury rose slightly, sending the yield down to 3.41%.  

Stocks trim losses, close modestly lower

The Dow Jones industrial average (INDU) lost nearly 3 points, or less than 0.1%, to close at 1,1822.8. The S&P 500 (SPX) slid over 1 point to end at 1,280. The tech-heavy Nasdaq (COMP) fell 21 points, or 0.7%, to close at 2,704.

After the market closed, Google (GOOG, Fortune 500) reported quarterly earnings and sales that topped analysts' expectations and reshuffled its management. The search giant said Eric Schmidt is stepping down as chief executive, with cofounder Larry Page taking over in April.

Google shares edged up 1% in after hours trading.

Also after the bell, Hewlett-Packard (HPQ, Fortune 500) announced that four directors are stepping down. Five new directors will join the company's board, including ex-eBay CEO Meg Whitman.

Stocks opened lower Thursday after a stronger-than-expected report on China's gross domestic product "spooked people that China has more tightening to do than we originally thought," said Paul Zemksy, head of asset allocation at ING Investment Management.

"China is a very important part of the recovery and expansion of global GDP," he said. "Until we see signs of moderation in their growth and a slowdown in inflation, I think the market is going to be a bit jittery about that."

Companies with exposure to China were among the worst performers on the Dow, including Caterpillar (CAT, Fortune 500), Du Pont (DD, Fortune 500) and Boeing (BA, Fortune 500). But consumer-linked stocks such as Wal-Mart (WMT, Fortune 500), Procter & Gamble (PNG) and Home Depot (HD, Fortune 500) were the top gainers on the blue-chip index.

Bank stocks, which have been battered by mixed earnings results, regained some ground. Bank of America (BAC, Fortune 500) and JPMorgan (JPM, Fortune 500) were both up over 1%. Morgan Stanely (MS, Fortune 500) was up 4.5% after it posted better than expected quarterly earnings, but missed on sales

In the technology sector, shares of F5 Networks (FFIV) plunged 20% after the maker of Internet networking devices issued a dour outlook for the second quarter.

Commodity prices were also under pressure. Oil prices sank after the government reported a surprise jump in U.S. crude supplies. Gold and silver prices fell as the dollar strengthened.

The retreat came despite better-than-expected reports on U.S. home sales and weekly claims for unemployment benefits. Some traders said the market appears to be entering a "correction" phase, although any retreat is expected to be modest.

"With so much bullishness in the market, it's not surprising to see a bit of a pullback," said Brian Gendreau, market strategist at advisory firm Financial Network.

On Wednesday, stocks ended lower, with tech stocks getting hammered and the Nasdaq suffering its biggest one-day loss in nearly two months.

Economy: The number of Americans filing for first-time unemployment insurance eased by 37,000 to 404,000 last week. The number was lower than forecast.

The National Association of Realtors said sales of existing homes rose 12% in December to a seasonally adjusted annual rate of 5.28 million. The total was much larger than expected.

The Philadelphia Fed index, a regional reading on manufacturing, edged down in December. And the index of Leading Economic Indicators increased more than expected in December.

World markets: Asian markets ended sharply lower following China's GDP report. The Shanghai Composite tumbled 2.9%, the Hang Seng in Hong Kong lost 1.7% and Japan's Nikkei fell 1.1%.

China's gross domestic product, the broadest measure of economic output, expanded at an annual rate of 9.8% in the fourth quarter of 2010. The rate was faster than the 9.6% rate reported in the prior quarter, according to the National Bureau of Statistics.

Meanwhile, inflation cooled -- with the nation's consumer price index rising 4.6% last month, compared to 5.1% in November.

China's rapid growth has sparked fears that its economy may overheat, and many economists are expecting China to further tighten its monetary policy and hike interest rates.

European stocks also slumped. Britain's FTSE 100 slid 1.8%, the DAX in Germany fell 0.8% and France's CAC 40 edged down 0.3%.

Companies: Google said its net income in the fourth quarter rose to $2.5 billion, up 29% from a year earlier.

The results included one-time charges of 94 per share. Without the charges, Google said it earned $8.76 per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, forecasted earnings of $8.10 per share.

Sales for the company rose 26% to $8.4 billion. Excluding advertising sales that Google shares with partners, the company reported revenue of $6.3 billion, which topped analysts' forecasts of $6.1 billion.

Morgan Stanley (MS, Fortune 500) posted fourth-quarter earnings of $1.1 billion, or 43 cents a share. Revenue rose 14% from a year earlier to $7.8 billion. Analysts expected the investment bank to report earnings per share of 35 cents on revenue of $7.35 billion. Shares of Morgan Stanley rose 4%.

Wendy's/Arby's Group shares spiked 9% after the fast food giant announced it may sell its struggling Arby's roast beef sandwich chain to focus resources exclusively on the Wendy's brand.

F5 Networks said it expects to report second-quarter sales in the range of $275 million to $280 million. Wall Street analysts surveyed by Thomson Financial were expecting revenues between $272 million and $308 million.

Currencies and commodities: The dollar gained against the euro, the Japanese yen and the British pound.

Oil for March delivery fell $2.22 to close at $89.59 a barrel.

Gold futures for February delivery fell $23.70 to settle at $1,346.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.45% from 3.34% late Wednesday.  

Stocks stumble after Goldman Sachs earnings

"So far, earnings have gotten off to a mixed start," said Michael Sheldon, chief market strategist at RDM Financial Group. "We've seen very positive results from tech giants like Apple (AAPL, Fortune 500) and IBM, but financial companies are still dealing with new financial regulation, weakness in the housing market and slow loan growth."

The Dow Jones industrial average (INDU) shed 13 points, or 0.1%, with Bank of America (BAC, Fortune 500) and American Express (AXP, Fortune 500) posting the biggest drops. But losses were capped by a 3% jump in IBM's (IBM, Fortune 500) stock. Earlier in the session, the blue-chip index rose 23 points to its highest level since August 2008.

The S&P 500 (SPX) lost 13 points, or 1%, and the Nasdaq (COMP) dropped 40 points, or 1.5%. It was the biggest one-day loss for the tech-heavy index in almost two months.

Sheldon said that going forward he would not be surprised to see a modest pullback. "Historically, stocks run up into earnings season but experience some profit taking once companies start reporting," he said. Next week, more than 100 S&P 500 companies open their financial books.

But Sheldon added that any weakness in stocks will be short-term.

"As long as the direction of the economy remains on track, the outlook for markets remains positive, at least for the first half of the year," he said.

Investors will also be paying close attention to Chinese President Hu Jintao's visit to the United States as the White House plays host Wednesday to both Hu and a group of American and Chinese business leaders.

"I don't believe the visit will produce any real changes that the U.S. is looking for in terms of a re-evaluation of the yuan, so people will be looking carefully at what agreements can be made in terms of American companies exploring bigger opportunities in China," said Peter Cardillo, chief market economist at Avalon Partners.

On Tuesday, stocks closed higher as shares of Boeing (BA, Fortune 500) and other industrial names rose -- offsetting weakness from Citigroup (C, Fortune 500) and Apple (AAPL, Fortune 500).

Companies: Goldman Sachs (GS, Fortune 500)'s stock tumbled almost 5% after the bank posted better-than-expected fourth-quarter earnings, but missed on revenue estimates.

Meanwhile, shares of Wells Fargo (WFC, Fortune 500) fell 2.1% following results that were in line with forecasts.

Apple reported its best quarter ever late Tuesday, driven by holiday iPad and iPhone sales that were much better than forecast. Shares of Apple (AAPL, Fortune 500) slipped 0.5% Wednesday, after closing down 2% Tuesday amid concerns about Steve Jobs' medical leave of absence.

Shares IBM (IBM, Fortune 500) rose more than 3% Wednesday after the tech giant reported fourth-quarter earnings that topped forecasts Tuesday night.

Starbucks (SBUX, Fortune 500) announced early Wednesday that it will begin accepting mobile payment in all of its U.S. stores, allowing customers to use select smartphones to make purchases. Shares of the company ended slightly higher.

Shares of American Express (AXP, Fortune 500) slid 2.4% after the credit card company said it will shut down a facility in Greensboro, N.C., resulting in 550 job cuts.

Economy: Government figures for December showed a steep decline in housing starts but a surprisingly dramatic increase in building permits.

The U.S. Census Bureau reported that new home construction slumped 4.3% last month, while building permits jumped 16.7%.

World markets: European stocks closed lower. Britain's FTSE 100 dropped 1.3%, while the DAX in Germany and France's CAC 40 fell 0.9%.

Asian markets ended the session higher. The Shanghai Composite rallied 1.8%, the Hang Seng in Hong Kong gained 1.1% and Japan's Nikkei rose 0.4%.

Currencies and commodities: The dollar fell against the euro, the Japanese yen and the British pound.

Oil for March delivery fell 50 cents to settle at $91.81 a barrel.

Bonds: The price on the benchmark 10-year U.S. Treasury rose slightly, pushing the yield down to 3.34% from 3.36% late Tuesday.  

Stocks gain despite weakness in banking sector

The Dow Jones industrial average (INDU) added 50 points, or 0.4%. The broad S&P 500 (SPX) index edged up nearly 2 points, or 0.1%. The Nasdaq (COMP), a proxy for the technology sector, added 10 points, or 0.4%.

In addition to Boeing, industrial stocks Alcoa (AA, Fortune 500) and Caterpillar (CAT, Fortune 500) were both up about 2%, reflecting the bullish outlook many investors have for economic growth in 2011.

"Investor sentiment is extremely positive right now," said McCain. "And that's a risky time for the market."

He said any improvement in corporate earnings or economic data will likely have a "muted effect" on stocks, while negative surprises "can torpedo the market."

Looking ahead, quarterly reports are due early Wednesday from Goldman Sachs and Wells Fargo. Investors will also take in the latest readings on housing starts and building permits before the market opens.

Markets were closed Monday due to Martin Luther King Jr. Day. On Friday, stocks ended moderately higher, with the Dow and the S&P posting their seventh straight week of gains. That's the longest weekly win streak for the Dow since the two months of consecutive gains that ended last April.

Companies: Apple reported results late Tuesday for its best-ever quarter, with revenue of $26.7 billion driven by holiday iPad and iPhone sales that were much better than forecast. Apple's profit of $6 billion also set a new record.

Apple sold 7.3 million iPads in the quarter, easily surpassing the expectations of nearly every Wall Street analyst. It also sold 16.2 million iPhones, 4.1 million Macintosh computers and 19.5 million iPods during the quarter.

Shares of Apple had been under pressure for most of the session Tuesday, after the company announced Monday that CEO and co-founder Jobs will take another leave of absence because of health problems.

Jobs' leave of absence comes two years after the Apple CEO took a six-month sabbatical, during which he received a liver transplant. While the news may weigh on Apple shares in the coming days, the slump isn't likely to last long, said Tom Winmill, portfolio manager at Midas Funds.

Also after the bell, IBM (IBM, Fortune 500) reported net income of $5.3 billion, or $4.18 per share, for the fourth quarter. That's up from $4.8 billion, or $3.59 per share, a year ago. Analysts had predicted earnings of $4.08 per share.

Citigroup (C, Fortune 500) posted quarterly results before the opening bell that missed expectations. The bank reported a profit of $1.3 billion, or 4 cents per share, on revenue of $18.4 billion.

While Citi's quarterly earnings disappointed, many other companies are on deck to report results this week -- and Winmill said he is bullish about the quarter.

"I think overall we'll see earnings come in this quarter as they did in the prior quarter, with companies continuing to surprise on the upside," he said.

Rival JPMorgan Chase (JPM, Fortune 500) laid the foundation for overall strength on Friday when it reported a 47% jump in fourth-quarter earnings to $4.8 billion, or $1.12 per share. Goldman Sachs (GS, Fortune 500) is due to report Wednesday morning.

Delta (DAL, Fortune 500) reported quarterly earnings that missed forecasts, posting earnings of 19 cents per share -- compared to the 24 cents expected by analysts. Shares of the airline company dropped 5.6%.

Outside the earnings arena, shares of commercial banking firm Comerica (CMA) tumbled nearly 8% Tuesday, after the company agreed to acquire Sterling Bancshares (SBIB) in a $1 billion all-stock deal.

The Federal Communications Commission approved the merger of Comcast, of the country's largest cable operator, and broadcasting company NBC Universal.

Economy: The New York Fed released its Empire Manufacturing Survey before the market open. The reading ticked up to 11.92 in January, which was in line with expectations.

Separately, the National Association of Homebuilder's Housing Market Index for January came in unchanged at 16, as expected.

World markets: European stocks closed higher. Britain's FTSE 100 rose 1.2%, the DAX in Germany and France's CAC 40 both gained 0.9%.

Asian markets ended mostly higher. The Shanghai Composite edged up 0.1%, the Hang Seng in Hong Kong was barely above breakeven and Japan's Nikkei rose 0.2%.

Currencies and commodities: The dollar lost ground against the euro, the Japanese yen and the British pound.

A stronger-than-expected report on GDP from Germany gave the euro a boost in early trading and helped lift European markets, Winmill said.

Oil for February delivery fell 22 cents to $91.32 a barrel.

Gold futures for February delivery added $7.70 to settle at $1,368.20 an ounce.

Bonds: Foreign investors bought $93.9 billion in long-term Treasuries in November, increasing their net holdings after purchasing $56 billion the month before, according to the Treasury's latest reading.

The largest lender to the U.S. remains China, which slightly decreased its holdings to $895.6 billion.

Meanwhile, the price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 3.39% from 3.33% late Friday.