Thread: BofA, Caterpillar Lead Dow's Surge

BofA, Caterpillar Lead Dow's Surge

Banks Jump as Fed Opens Door to Dividend Increases; Nasdaq Up 18 of 21 Days

By STEVEN RUSSOLILLO

NEW YORK—Stocks rallied Thursday to their highest level since September 2008 as investors applauded the Federal Reserve's latest effort to stimulate the struggling economy.

The Dow surged nearly 220-points to its highest level since September 2008 thanks to the Federal Reserve's plan to buy $600 billion in treasurys. Bob O'Brien and Kristina Peterson has details and tell us why gold prices also hit a new record.

The Dow Jones Industrial Average closed up 219.71 points, or 1.96%, to 11434.84, its highest closing level since just before Lehman Brothers Holdings Inc. collapsed.

Dow components Bank of America, J.P. Morgan Chase and Caterpillar propelled blue chips to their fifth gain in a rowand biggest climb since Sept. 1.

The Standard & Poor's 500-stock index rose 23.10 points, or 1.93%, to 1221.06. Financials were the strongest sector after The Wall Street Journal reported that the Federal Reserve is expected to allow healthy banks with strong capital levels to raise their dividends.

The Nasdaq Composite gained 37.07 points, or 1.46%, to 2577.34. The technology-heavy index closed at its highest level since January 2008. It has risen in 18 of the last 21 sessions.

Investors pushed stocks higher as they digested the Fed's plans, announced on Wednesday, to purchase an additional $600 billion of longer-term Treasury securities by June in a second round of quantitative easing, dubbed QE2. The central bank also will keep reinvesting principal payments from its securities holdings.

"I'm a little surprised that there wasn't a 'sell the news' reaction, but people are clearly relieved at the size of the quantitative easing package," said Ben Halliburton, chief investment officer at Tradition Capital Management.

On the employment front, initial jobless claims posted a bigger-than-expected jump, suggesting continued weakness in the labor market as investors gear up for the October nonfarm payrolls report, due Friday morning.

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Traders worked the floor of the New York Stock Exchange on Thursday.
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.."Unless it's something bizarre I just don't see the jobs report having a major impact one way or the other," said Barry James, president and portfolio manager at the James Advantage funds.

In the aftermath of the Fed's announcement, investors rushed into a plethora of asset classes while the dollar continued sinking. Demand for U.S. Treasurys rose, pushing the yields for the two-year and five-year notes down to record lows.

Gold prices set another fresh record high and crude oil touched a six-month high. Meanwhile, the U.S. Dollar Index, which tracks the U.S. currency against a basket of six others, fell 0.7%.

"The Fed has signaled this move for some time now and no one wants to get on the wrong side of the Fed," said Rex Macey, chief investment officer at Wilmington Trust.

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.Investors analyzed a mixed bag of October same-store sales reports from major retailers. Retailers last month set the stage for a fiercely competitive Christmas, with price wars, promotions and competitive positioning spurring most of the sales gains.

Macy's, Saks and Nordstrom posted same-store sales that exceeded analysts expectations. But Aeropostale, Big Lots, Hot Topic saw disappointing results. Macy's jumped $1.59, or 6.6%, to $25.56, while Big Lots slumped 2.15, or 6.8%, to 29.26.

Among other stocks in focus, Potash Corp. of Saskatchewan fell 3.53, or 2.4%, to 141.97 after the Canadian government rejected BHP Billiton's $38.6 billion hostile bid for it, but gave the Anglo-Australian miner another 30 days to try to convince the government of its case.

Time Warner Cable's third-quarter earnings rose 34%, beating analysts' estimates, as revenue increased, but the company lost subscribers. Shares hit a fresh 52-week high and finished up 2.67, or 4.5%, to 62.33.

DirecTV Group's third-quarter earnings jumped 31% from a year ago as revenue rose and the company added more subscribers than a year earlier. Earnings were in line with analysts' expectations, but shares fell 1.59, or 3.6%, to 42.59.

Qualcomm shares rose 2.65, or 5.8%, to 48.34. The world's largest wireless-chip maker's fiscal fourth-quarter profit rose 7.7% on higher revenue and margins. The company also forecast first-quarter results above Wall Street's expectations.

Whole Foods Market's fiscal fourth-quarter profit jumped 58% on better-than-expected growth in same-store sales. The company said it gained market share at a faster rate than most public food retailers. Shares surged $6.20, or 15%, to $47.27.

From stocks to bonds to gold to cotton, assets are spiking higher on the heels of the Fed's $600 billion Treasury-buying binge. But the program has one big blind spot: the jobs market. Deborah Blumberg, Kathleen Madigan and Paul Vigna report.
.Apollo Group shares fell to a four-year low Thursday after the U.S. Department of Education said it will conduct a review of Apollo's University of Phoenix. The review is the latest in a series of investigations for the nation's largest for-profit college. Apollo shares dropped $3.09, or 8%, to $35.38.

Gap rose $1.17, or 6.1%, to $20.43 as the apparel retailer posted surprise growth in its monthly same-store sales. The company also forecast its third-quarter earnings per share, which came above analysts' expectations.

Unilever, the world's third-largest maker of branded household products, posted a jump in quarterly profit on rising sales driven by volume gains in its emerging markets. Shares climbed 1.77, or 5.9%, to 31.89.

Write to Steven Russolillo at steven.russolillo@dowjones.com

http://online.wsj.com/article/SB1000142 ... Collection

Originally Posted by JohnDoe2

The Dow Jones Industrial Average closed up 219.71 points, or 1.96%,

Meanwhile gold is up over 3%, which means in terms of REAL money the Dow lost over 1%.

With all that extra money they are printing the dollar will just lose more value. The stock market may go up but the market does not really increase jobs for the unemployed

RELATED

San Diego job postings rise 12% since last year

Online want ads have increased for eight months in a row

http://www.alipac.us/ftopict-217287.html

That is great nwes that San Diego area is hiring,but I do not live in San Diego as many millions of others do not either

Yeah and the word here is that there are more jobs. But try to get one. I am still waiting on word on any job that I have applied for. None of the companies take you in person,you must apply online

More then likely due to my age and I was told that from the unemployment office, But I wish the best to others in finding one.

Then of course you have tens of thousands working part time jobs since they can not find full employment jobs.