U.S. equity markets opened sharply higher this morning following approval last night from the U.S. House of Representatives of a bill that preserves some tax cuts, eliminates others, and basically kicks the can down the road on spending. Reaction in both Asia and Europe was positive, with Hong Kong up 2.9% on the day. Both the Nikkei and the Shanghai markets were closed today. In Europe, PMI numbers were better than expected in the U.K., but softer than anticipated in Germany. For the eurozone as a whole, the PMI reading of 46 is lower than the expected reading of 46.3, as the continent’s economy continues to contract. The U.S. PMI reading came in at 54, just below the expected 54.2 but solidly higher than November’s reading of 52.8 (more coverage here). The ISM manufacturing survey also posted a positive number today (more coverage here). Every sector of the equities markets was up today, with technology and financial stocks leading the charge.
The U.S. dollar index rose rose 0.13% today, now at 79.834. The GSCI commodity index is up 0.3% at 646.58, with commodities prices mixed today. WTI crude oil closed up 1.4% today, at $93.12 a barrel. Brent crude trades up 1.2% at $112.30 a barrel. Natural gas is down 3.5% today at about $3.24 per thousand cubic feet. Gold settled up 0.8% today at $1,688.80 an ounce.
The unofficial closing bells put the DJIA up more than 308 points to 13,412.71 (2.35%), the NASDAQ rose nearly 93 points (3.07%) to 3,112.26, and the S&P 500 rose 2.54% or more than 36 points to 1,462.42.
There were a several analyst upgrades and downgrades of note today, including Archer Daniels Midland Co. (NYSE: ADM) raised to ‘buy’ with a target price of $34 at Miller Tabak; Marriott International Inc. (NYSE: MAR) raised to ‘ buy’ with a $45 target price at SunTrust; Walgreen Co. (NYSE: WAG) raised to ‘outperform’ with a $45 price target at Raymond James; Ross Stores Inc. (NASDAQ: ROST) cut to ‘neutral’ with a $60 target price at Citigroup; and Target Corp. (NYSE: TGT) cut to ‘hold’ with a $59 target price at Jefferies.
There were no earnings reports of note today, but before markets open tomorrow morning we are scheduled to hear from Family Dollar Stores Inc. (NYSE: FDO).
Some standouts from today include the following stocks:
Zipcar Inc. (NASDAQ: ZIP) is up 48.2% at $12.21. The car rental company is being acquired by Avis Budget Group Inc. (NASDAQ: CAR) for about $500 million. More coverage here.
Facebook Inc. (NASDAQ: FB) is up 5.3% at $28.02. The social media company continues to receive encouraging words from analysts on optimism for the company’s mobile advertising business.
BioFuel Energy Corp. (NASDAQ: BIOF) is up 32.6% at $4.88. The maker of renewable fuels is getting an extra boost from the extension of a tax credit that was included in the fiscal cliff legislation passed yesterday. More coverage here.
Stay tuned for Thursday. Retail stores will be reporting December same-store sales tomorrow. We have noted the following events on the schedule (all times Eastern):
- 7:00 a.m. – Mortgage Bankers Association purchase applications
- 7:30 a.m. – Challenger job-cut report
- 8:15 a.m. – ADP employment report
- 8:30 a.m. – New claims for unemployment benefits
- 2:00 p.m. – FOMC minutes
- 4:30 p.m. – Fed balance sheet and money supply
Paul Ausick
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