Wall Street Edges Modestly Higher Into New Highs

Michael Teague  |

Following a week of unexpectedly good economic news, particularly with regard to the nation’s unemployment rate, stocks on Monday continued to advance, if not with the same sense of urgency as during Friday’s across the board increase of 1 percent.

Last week’s raft of highly anticipated earnings reports, along with increasingly customary reassurances from the Fed about the continuation of quantitative easing until such time as the economy can stand on its own, and most significantly the 0.1 percent drop in the unemployment rate during the month of April made for a frantic and exuberant atmosphere on Wall Street.

By contrast, stocks on Monday got off to a quiet start holding on to and in some instances modestly buffering last week’s gains.

One positive bit of economic news did however come from the Treasury Department, who announced another sale of its holdings of shares for General Motors Co. Treasury still owns almost 18 percent or some 241 million of the over 60 percent GM’s shares it purchased in 2009 to save the company that almost collapsed under the weight of the financial crisis.

The Treasury Department said it hoped to sell all of its GM shares in the next year and a half at most.

Monday was also the 3rd anniversary of the flash crash during which the Dow dropped nearly 1000 points in under 30 minutes.

Meanwhile, the Senate looked as though it were prepared to pass the Market Fairness Act, a law that would allow state governments to collect sales taxes from online business who sell products to their residents, even if those business have no physical presence in the state in question. The measure is more than likely to gain Senate approval, but could run ashore in the House of Representatives, where opposition to the bill as well as a more polarized political atmosphere could prove to be insurmountable obstacles.

The S&P 500 was up 0.19 percent to close at yet another new high of 1,617.50 points, with help from Bank of America (BAC), up over 5.3 percent to close at $12.89. One of the nation’s largest financial institutions announced a $1.7 billion settlement with MBIA over the fallout from toxic mortgage-backed securities and credit default swaps.

Tech shares were also up on the day, led by communications equipment manufacturer JDS Uniphase Corporation (JDSU) up 3.15 percent to $13.75 after the company somewhat disappointing earnings report of last week. Solar panel manufacturer First Solar, Inc. (FSLR) was up 3.67 percent to $47.69 ahead of the company’s scheduled release of its earnings report during afterhours trading.

Software company F5 Networks (FFIV) was up 2.85 percent to $77.52, while Juniper Networks Inc. (JNPR) was up 2.73 percent to close at $16.94.

Shares for Apple, Inc. (AAPL) were up 2.38 percent to $460.71 as the company slowly makes up for ground lost over the last few months after announcing an unprecedented increase in dividend payouts, as well as a bond offering after last week’s disappointing earnings report.

The Dow was down a slight 0.03 percent to close at 14,968.89 points, receding from Friday’s record-high close that broke through the 15,000 mark, with strong performances from Unitedhealth Group Inc. (UNH), up 2.17 percent to close at $60.20 per share, The Home Depot (HD) up 1.76 percent to close at $75.26, and JPMorgan Chase & Co. (JPM) up 1.28 percent to close at $48.18.

The Dow was weighted though by two healthcare giants, Merck & Co. Inc. (MRK) was down 1.51 percent to $44.98, and Johnson & Johnson (JNJ) was off 1.25 percent to $84.68. Drug manufacturer Pfizer inc. (PFE) was down 0.83 percent to $28.72.

The Nasdaq had the best day, up 0.42 percent to close at 3,392.97 points, also with help from tech stocks. Aside from Apple, solar company SunPower Corporation (SPWR) was up 6.66 percent to $15.86, Seagate Technology PLC (STX) was up 1.79 percent to $41.97, Baidu Inc. (BIDU) was up 3.72 percent to close at $87.65.

Tesla Motors Inc. (TSLA) was also up over 9 percent to $59.50 ahead of its earnings report release on Wednesday.

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Meanwhile, Facebook (FB) was down 2.61 percent to $27.57. The company announced that it would incorporate automatically playing video ads in the newsfeed of its users by July. Netflix continued its slide down 1.29 percent to close at $210.69.

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