Stocks were on track for an upward start on Thursday as futures signaled a higher opening following yesterday’s strong rally. Better-than-expected quarterly report from JPMorgan Chase and a much better than expected June housing data – gave Wall Street a sense of reassurance about the health of the economy.
The indexes however, initially were mostly range bound. The major averages fluctuated between coming slightly off their best levels to sometimes dipping into red territory. Perhaps, these oscillations can be attributed to the July Philadelphia Fed survey- released early today, showing slightly worse numbers than expected (-16.3 versus the -15.0 consensus). Nevertheless, the pressure was only limited in scope as advancers handily outnumbered decliners by about 2 to 1 in NYSE, claiming the market breadth and consequently allowing the Street to extend Wednesday’s recovery and provide confirmation of the current upside being more than just a short-covering rally.
The major indexes in midday traded at session highs as crude prices plunged $3. The Dow Jones Industrial rose more than 160 points while financial stocks continued adding to yesterdays’ significant gains. The intraday action kept its constructiveness throughout the session.
Market internals remained sound in the final hour of trading as INDU solidly extended its gains out of a midday consolidation to close above 200 points.
In other news
– BlackRock Inc.,(BLK) the largest publicly traded U.S. asset manager, reported second-quarter earnings which topped analysts’ estimates. The co. saw its net income rise 23% as fund deposits pushed assets under management to $1.43 trillion. BlackRock shares catapulted by adding $25.64 to its tape at $204.59 in trading hours.
– JPMorgan Chase (JPM) announced better-than-expected earnings per share results for the most recent quarter. Q2 earnings came in $0.54 per share, a dime above the consensus of $0.44 on sales of more than $18 billion. The net-income excludes $540 million for Bear Stearns merger-related items. This is a great result for JPM when including markdowns of $1.1 billion due to co’s leveraged loans and mortgage-related positions.
On the economic front, the Labor Department reported that the number of newly laid-off people seeking unemployment benefits rose by 18,000 last week to 366,000. However, the increase was well below consensus expectations. Economists were expecting 380,000 claims.
– Housing starts increased 9.1% in June totaling 1.066 million units. The consensus had expected a 960,000 rate from 977,000 in May. The increase in starts for the month of June was due to multiple-unit starts in the Northeast prompted by New York City’s implementation of a new construction code on July 1.
Gold finished up $6.60 to $969.30 oz while Crude prices closed below $130 level ($129.59 – $5.01) and are at their lowest level in nearly one month.