Bargain hunters, good economic news and hopes for QE3 had the Dow Jones Industrial Average up over 127 points, a gain of more than 1.1%, to over 10,981. Thanks to equities recovering, Treasury yields rose by 3 basis points and the German Bund yield was up 1 basis point. Some analysts expect Federal Reserve Chairman Ben Bernanke will announce a new round of stimulus measures when he speaks later this week in Jackson Hole, Wyo.
In an interview in the Financial Times yesterday, billionaire investor Wilbur Ross stated he was investing in shipping because of greater economic growth in Asia. The Dow is down more than 3.8% for the week and down more than 5.4% for the year.
Cisco (NASDAQ:CSCO) was leading the Dow early, up more than 2.2% to over $15.40, picking up more than 30 cents. A Wells Fargo report cited a higher chip demand, which had the tech sector rising. Cisco is down more than 6% for the week, 8% for the month and 30% for the quarter. Cisco was upgraded to “buy” by Wunderlich on Aug. 11.
Microsoft (NASDAQ:MSFT) also was feeling the tech sector love, gaining about 50 cents a share, about 2%, to trade around $24.50 in the morning session. Microsoft is down more than 5% for the week and 12% for the month. Earnings for Microsoft are increasing around 30% on a quarter-by-quarter basis and for the year.
With its strike ending, Verizon Communications (NYSE:VZ) was up more than 1.8% to over $35.50 a share, more than 60 cents higher. About 45,000 strikers have returned to their jobs. For the year, Verizon is up about 25%.
Bank of America (NYSE:BAC) suffered its fourth-largest one-day loss of the year yesterday and was down about another 1.25%, or 10 cents, to under $6.10 per share. Bank of America is down more than 43% for the quarter. While BAC claims it has plenty of funds, Layla Peruzzi, equity head at Jefferies, said, “The market is forcing (Bank of America) into a capital raise.” Predictions have Bank of America having to raise $50 billion to meet mortgage losses and comply with Basel III requirements. At present, Bank of America has a market capitalization of about $65 billion.
Hewlett-Packard (NYSE:HPQ) was down early but recovered to be off just 0.65%, around 16 cents, to under $24.30 a share. Wall Street still does not like HP’s predictions for how it will compensate from the lost revenue when it spins off or sells its personal computer unit. Hewlett Packard is down about 25% for the week, 33% for the month and 40% for the year.
Off about 20 cents was Travelers (NYSE:TRV) to around $48.60, shedding about 0.4% per share. Hurricane Irene, which is heading toward Florida, could pose problems for Travelers. Up about 1.4% for for the year, Travelers is down more than 6% for the week, about 15% for the month and about 20% for the quarter.
Jonathan Yates does not own any of the stocks mentioned in this article.
