U.S. stocks rallied right out of the gate and didn’t look back Friday afternoon as investors grabbed onto a slightly stronger report on durable goods orders, and as gold touched a record high above $1,300 an ounce.
All three major indexes closed at their highest levels in four months and finished with gains for the fourth straight week, their longest winning streaks since April.
The Dow Jones industrial average (INDU) surged 198 points, or 1.9%, with all 30 components of the blue-chip index higher. The blue-chip index closed the week up 2.4%, and is on track to rally 8.4% for the month. That would make this month the Dow’s best September since 1939.
The S&P 500 (SPX), which is also on track for its best September since 1939 thanks to a 9.5% rise so far, jumped 24 points, or 2.1%. A whopping 98% of its components posted gains, including Nike (NKE, Fortune 500), which rose to an all-time high near $82 a share.
The tech-heavy Nasdaq (COMP) surged 54 points, or 2.3%. Shares of Apple (AAPL, Fortune 500) and Amazon (AMZN, Fortune 500) continued to rally to all-time highs. The index is up 12.6% for the month.
"The better-than-expected report on orders for durable goods, particularly the nice rebound in goods excluding transportation, further confirms that a double-dip recession is not likely any time in the immediate future," said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.
He added that healthy earnings from Nike and KB Home (KBH) reassured investors and helped boost enthusiasm.
Stocks climbed early in the week as the S&P 500 index crossed key technical levels, but fell into a slump in recent trading sessions.
"All this week, we’ve seen maybe some nervous markets, concerned about the stuttering economic recovery," said David Jones, chief market strategist at IG Markets. "But overall, I think they’re still bullish. Maybe the weakness over the last couple of days was a bit overdone."
The durable goods report was driving the market Friday because investors are seizing upon "any positive sentiment for the market right now," said Hamed Khorsand, analyst at BWF Financial.
Wall Street had a rough session Thursday, ending with a late-stage slide. Investors have been fleeing risky stocks in favor of safe-haven investments like gold, fueling the precious metal’s recent record run.
Economy: The government said durable goods orders, a measure of manufacturing, fell 1 payday loans.3% in August after slipping 0.7% in July. That was a hair better than the 1.4% decline economists had forecast. Durable goods orders are orders on products meant to last at least three years, such as cars and computers.
New home sales remained at the second-lowest level on record in August at an annual rate of 288,000, the government reported. Economists had expected sales to bump higher. The data come a day after existing home sales came in slightly above expectations.
Companies: KB Home reported a third-quarter loss of 2 cents per share. That was much better than the 15-cent loss forecast by analysts. Revenue rose more than 9% year-over-year to $501 million, marking the first year-over-year increase in four years. The stock jumped 3.4%.
After the closing bell Thursday, Nike reported an 8% rise in quarterly revenue to more than $5 billion as new orders jumped 10%. In China, orders surged 25%, and orders in emerging markets rose 21%. The stock rose 2.5%.
HSBC (HBC) chief Michael Geoghegan is poised to leave the bank as part of a management shake-up, according to published reports. The company’s stock climbed 1.7%.
Market breadth: On the New York Stock Exchange, winners topped losers by five to one on trading volume of 1.1 billion shares. On the Nasdaq advancers topped decliners four to one on 1.4 billion shares.
World markets: European shares recovered from their declines earlier in the day to close higher. Britain’s FTSE 100 rose 0.9% while Germany’s DAX and France’s CAC 40 jumped by almost 2%.
In Asia, Japan’s Nikkei index tumbled nearly 1%. The Shanghai Composite and Hang Seng in Hong Kong ended the day with slight gains.
Currencies and commodities: The dollar fell against other currencies, including the British pound, the Japanese yen and the euro.
Gold futures for December delivery reached a record trading high Friday morning, fueled by recovery jitters and currency market volatility. Prices reached an intraday trading high of $1,301.60 an ounce before backing off. Gold prices settled up $1.80 at $1,298.10 an ounce.
The price of oil for November delivery rallied 1.31 cents, or 1.7%, to settle at $76.49 per barrel.
Bonds: The price of the 10-year note fell, pushing up the yield to 2.61%.
Hawaii stocks ended the week mostly up, following the overall market higher on Friday trading.
The Dow Jones Industrial Average closed at 10,860.26, up 197.84 for the day, and the Nasdaq was up 54.14 to close at 2,381.22.
Gainers included:
Alexander & Baldwin Inc. (NYSE: ALEX), which closed at $35.18, up $1.11.
Hawaiian Holdings Inc. (Nasdaq: HA), which closed at $5.70, up 4 cents.
Bank of Hawaii Corp. (NYSE: BOH), which closed at $45.11, up $1.05.
Central Pacific Financial Corp. (NYSE: CPF), which closed at $1.57, up 2 cents.
Maui Land & Pineapple Co. (NYSE: MLP), which closed at $4.40, up 20 cents.
Barnwell Industries, Inc. (AMEX: BRN), which closed at $2.90, up 10 cents.
ML Macadamia Orchards (Other OTC: NNUT), which closed at $2.61, up 11 cents.
Hoku Corp. (Nasdaq: HOKU), which closed at $2.68, up 3 cents.
Losers included:
Hawaiian Electric Industries Inc. (NYSE: HE), which closed at $22.60, down 7 cents.
Cyanotech Corp. (Nasdaq: CYAN), which closed at $2.35, down 1 cent.
Newfield Exploration’s Chief Financial Officer Terry Rathert recently sold $1.1 million worth of the company’s stock, according to Barrons.com.
Rathert sold 20,000 shares for an average price of $52.53 on Sept. 15. He held 156,040 shares directly and indirectly and about 70,000 exercisable options following the sale.
The Houston independent crude oil and natural gas exploration and production company had a disappointing second quarter, recording net income of $96 million, or 72 cents a share, on revenue of $448 million in late July.
Newfield’s (NYSE: NFX) stock took a dip after the earnings report, falling from $52.21 on July 22 to as low as $46.11 on Aug. 27. Shares have since rebounded, closing at $53.98 on Monday.
In February, Lee Boothby, Newfield's president and chief executive officer of Newfield was named the company’s chairman.
The latest Business Pulse survey from Los Angeles Business from bizjournals show a variety of responses in the realm of job security.
The results of the poll question "How secure do you feel about your job this year versus last year?" broke down as follows:
No comments were left on the poll.
This week's question looks at a question that's close to everyone's heart, especially those in the business community — customer service instant payday loan lenders.
Customer service is the key to success for many businesses. And with the dismal economy, some folks claim customer service has improved, while others say it has declined as more employees are doing unfamiliar tasks.
We want to know what you think? Has customer service improved or become worse during the recession?
StorSimple Inc. on Tuesday named Ian Howells chief marketing officer.
The Santa Clara company is a cloud storage vendor.
Howells has about 25 years of experience, the company said, most recently at Alfresco.
Before that he was was responsible for worldwide marketing at SeeBeyond before its acquisition by Sun Microsystems Inc fast cash advance. Howells was also the first employee of Documentum in Europe, where he had both European marketing and global marketing roles.
The company was founded by CEO Ursheet Parikh and President Guru Pangal.
Britain’s Financial Services Authority said Thursday it has fined Goldman Sachs International nearly $27 million for not disclosing its investigation by the U.S. Securities and Exchange Commission.
The regulatory agency said Goldman should have revealed that it was under investigation by the SEC for the allegedly fraudulent activity of Fabrice Tourre, a London-based Goldman trader.
The FSA said the fine of £17.5 million stems from Goldman’s "failure to notify the FSA of matters related to the [SEC] investigation into the Abacus 2007-AC1 synthetic collateralized debt obligation."
An SEC lawsuit accused Tourre of selling the "Abacus" portfolio of real estate investments in 2007 that had a high likelihood of losing value because it was selected by Paulson & Co., a hedge fund that was betting it would fail. The SEC says that Tourre concealed Paulson’s role from investors, who lost $1 billion on the deal.
Tourre has denied the allegations, which included the SEC’s reference to a 2007 e-mail in which the trader said that he knew of his firm’s corrosive investments and boasted of his Wall Street prowess, referring to himself as the "fabulous Fab short term personal loan."
The FSA said Goldman should have been forthcoming about the U.S.-based investigation.
"GSI did not set out to hide anything, but its defective systems and controls meant that the level and quality of its communications with the FSA fell far below what we expect of an authorized firm," said Margaret Cole, managing director of enforcement and financial crime for the FSA.
"We’ve agreed to the fine," said Goldman spokesman Mike DuVally. "We’re pleased this matter has been resolved." He said the firm would not admit or deny the U.K. charges.
The FSA fine is in addition to a $550 million settlement with the SEC for allegedly misleading investors. Goldman agreed to the U.S. fine in July without admitting or denying the charges against it.
The 3PAR bidding war finally came to its conclusion Thursday after Dell conceded victory to Hewlett-Packard.
The winning bid was HP’s offer of $33 a share, or $2.1 billion — a stunning 242% premium over the value of 3PAR’s stock before the bidding war between Dell and HP began on Aug. 16.
That was too rich for Dell’s blood, the company said.
"We took a measured approach throughout the process and have decided to end these discussions," Dave Johnson, Dell’s senior vice president of corporate strategy, said in a prepared statement.
3PAR had previously notified Dell that it would go with HP’s offer of $30 a share, made Aug. 27, but Dell came back with a revised offer of $32 a share. HP then topped that offer with a bid of $33 a share, or $2.1 billion, 3PAR said Thursday.
Dell had three days to match or improve upon HP’s bid, but it opted instead to end its pursuit. 3PAR now owes Dell a $72 million breakup fee to terminate its earlier agreement with Dell.
Dell attempted to negotiate a higher termination fee of $92 million in its latest bid, but 3PAR actually never accepted that offer, calling some of its terms "unacceptable."
The latest offers represented the eighth and ninth bids for 3PAR between the two tech giants. Dell’s first bid, for $18, came three weeks ago, kicking off a fierce bidding war.
Dell and HP had both sought out 3PAR for its portfolio of high-end data storage technology, which is a necessary component of the high-growth cloud computing business. Cloud computing enables companies to remotely access applications stored and managed in off-site data centers. The process is cheaper and more efficient than traditional models.
Both Dell and HP license others’ technology for their cloud computing offerings. They saw 3PAR as a relatively cheap acquisition and the easiest way into a high-growth business. But the company quickly grew much more expensive.
Shares of HP (HPQ, Fortune 500) rose 1%, and Dell’s (DELL, Fortune 500) stock also rose 1% after falling earlier in the day. Shares of 3PAR (PAR) rose 2% to $32.83 after rising as high as $33.84 Thursday morning.
The jobs picture still looks sour, but there could be light at the end of the tunnel.
The bad news: The private sector slashed more jobs than expected in August, reversing a sixth-month trend of job gains. The good news: Overall employers announced fewer planned job cuts.
Private sector employers cut 10,000 jobs in August — a drop from the downwardly revised 37,000 jobs they added the month before, according to a report by payroll processing firm Automatic Data Processing.
Those cuts were worse than predicted. Economists polled by Briefing.com had expected the report to show 13,000 jobs added in August.
While jobs statistics are often a volatile measure, the drop is still enough to "heighten fears about a double-dip recession," Paul Ashworth, senior U.S. economist with Capital Economics said in a note to investors.
After the report was released, stock futures dipped slightly, but then rebounded as stocks popped up at the opening bell.
Job losses in the goods producing sector dragged down the entire measure, while the services sector actually saw a boost in employment. Both the construction and financial services industries cut jobs in August, continuing a three-year downward trend in those sectors.
ADP looks backward at the month, compiling data from actual payrolls. But earlier on Wednesday morning, a separate report showed employers’ plans for future job cuts sunk to a 10-year low during the month.
After rising for three months in a row, planned job cuts plummeted to 34,768 in August, the lowest level since June 2000 and down 17% from the previous month, according to outplacement firm Challenger, Gray & Christmas Inc.
Compared to a year ago, downsizing activity dropped 55% in August, and job cuts have eased 65% so far this year compared with the same period last year.
"Every other job market indicator seems to be stuck in first gear," said John Challenger, CEO of the firm. "In contrast, the layoff picture has improved so significantly that we are at pre-dot-com collapse levels when it comes to monthly job-cut announcements."
The separate jobs reports use different metrics, with ADP measuring only private sector job growth and Challenger compiling planned job cuts in the government and non-profit sectors as well as private industry.
"The two reports in combination give us a glimpse of exactly where we’re at: companies have stopped firing, but are not yet hiring," said Adrian Cronje, chief investment officer of investment firm Balentine.
Private sector businesses are holding cash on their balance sheets, he said, but are not hiring due to an uncertain outlook about future tax rates and fiscal policy.
According to Challenger, the industrial goods sector announced the most job cuts in August, but looking year-over-year, job cuts in the sector were down significantly overall.
The Challenger report also showed the government and non-profit sector shed the most jobs this year, accounting for 30% of all 2010 job cuts and eliminating three times more jobs than the pharmaceutical sector, which reported the second highest number of year-to-date cuts.
ADP and Challenger’s numbers set the stage for the government’s closely watched jobs report due Friday. Economists are expecting the report to show there were 120,000 jobs lost in August, an improvement over July’s 131,000 job loss.
Weather-related automobile crashes involving up to 69 vehicles closed westbound Interstate 10 in the downtown Phoenix area Saturday evening, according to media reports and the Arizona Department of Transportation.
Reports said Arizona Department of Public Safety officers, as well as Phoenix Fire Department units, responded to three major crashes between 16th Street and Seventh Avenue about 6 p.m. There were reports of one serious injury business
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