Market Wrap – Dow Jones +597 points for the Week
By Robert Perrego, at 4:57 pm on July 17th, 2009What do you get when you mix a Goldman earnings blow out with a JP Morgan beat, throw in some lower than expected jobless claims and top it all off with a housing starts increase that is more than expected AND more than last month?
Well, you sure do not get a sell off. There was only one economic release this morning and that was housing starts, which came in above last months (0.532M) and also above consensus for this month (0.530M) laying down a surprising 0.582M number.
After watching the market practically go vertical for 4 days it is very common to see a sell-off on a Friday, but the housing number this morning has the Bulls holding on for more upside gains. Goldman’s earnings blow out sparked a 597 point (7.3%) rally this week that today tacked an additional 32 points on the Dow. The rally had follow through and each day we got a little more good news to keep it going.
Fridays trading was pretty uneventful with the big news of the day being that CIT (NYSE: CIT) is in talks with JP Morgan Chase (NYSE: JPM) and Goldman Sachs Group Inc. (NYSE: GS) for short-term financing and hopefully avoiding a bankruptcy that would be the fourth largest of all time. BofA and Citigroup, two of the poster-children for the financial diasaster, both beat earnings before the open this morning and both stocks closed lower today. On the week Citi was up 14% and BofA was up 11% before trading opened this morning and after they reported earnings. Solid moves already and their numbers did not come in as shiny as Goldman’s so the stocks sold off today. Bank of America $0.33 vs. $0.28 and Citigroup $0.49 vs. $0.37.
The Dow finished up 32.12 (+0.36%, 8743), S&P 500 -0.36 points (-0.03%, 940.38) and the Nasdaq 100 +8.39 (+0.55%, 1527.26).
CIT added 29 cents which is a 71.22% gain closing at $0.70.
Energy closed up 0.57% as the sector leader and Finance closed down 0.89% as the laggard. Oil closed up $1.54 as the strong housing data once again brought thoughts of better future economic activity to the forefront of traders minds. New York Spot Gold finished basically flat on the day.
The noise out of D.C. is all about health care with word the Democrats do not have all the votes they need with the Blue Dog Democrats block saying the bill wont get out of committee. What still remains to be seen is who twists who’s arm behind closed doors and whatever political games get played will be in full swing soon. Obama was on T.V. (again) today saying that we need to do something about health care immediately or some type of earth shattering calamity will result. Is it me or does he predict the worst possible result EVERY time he wants to jam some legislation through and that we all should just agree with him and go sheepishly about our business? TARP, The ‘Economic Recovery Act’, the ice caps are going to melt and we are all going to drown and now, if we don’t spend $1 trillion or more right now, yesterday if we can manage it, we are going to go bankrupt? (actually credit Joe Biden with that oxymoronic comment – he is becoming the best foot in mouth politician in history and keeping comedians employed across the country).
Well it seems we made it through another week and we actually added 597 points to the Dow. Not a bad week. Hopefully we don’t all drown this weekend.
Now here are a few of the larger companies reporting next Monday and Tuesday you may want to keep an eye on;
Monday
HAL $0.28 expected, before the open
TXN $0.18 expected, after the close
LM $0.22 expected. after the close
Tuesday
AAPL $1.16 expected after the close
BLK $1.58 expected, before the open
CAT $0.22 expected, before the open
DD $0.53 expected, before the open
STT $0.97 expected, before the open
YHOO $0.08 expected, after the close
