U.S. markets continued on a high note Tuesday, as oil prices rose slightly and investors were looking to scoop up bargains in some hard-hit, well-known stocks. One of those stocks was Caterpillar Inc. (NYSE:CAT), which has been in an 18-month downtrend, but which rallied almost 5% in Tuesday’s trading.
Looking at economic news, it was a bad day for the real estate market, as the National Association of Realtors reported that for in November, existing homes sales were off 10.5% to an annualized rate of 4.76 million units. Wall Street analysts completely missed the boat on this one, expecting a decline of only 0.7%.
However, with the Consumer Financial Protection Bureau enacting new TRID regulations on the mortgage market, many closings were delayed, and so NAR blamed TRID for the bad sales number.
Still, this was the worst monthly decline in the last five years, so it is likely that home sales still would have missed expectations even without the new regulations going into effect.
The Dow Jones Industrial Average was up nearly 1%, while the S&P 500 Index closed 0.9% higher and the Nasdaq Composite rose 0.7%. All sectors were higher, with basic materials and energy stocks leading the charge.
A new affiliation drove Ford Motor Company (NYSE:F) higher. That one, along with Abercrombie & Fitch Co. (NYSE: ANF) and Continental Resources, Inc. (NYSE: CLR) are three of Tuesday’s best stocks.
Here are the details.
Ford Motor Company (F)
Ford stock motored over 3% higher after Automotive News announced that Ford and Alphabet, Inc (NASDAQ:GOOGL, NASDAQ:GOOG) have been engaged in discussions about teaming up to build GOOGL’s driverless cars.
Ford would not confirm nor deny the news, and Google would only say that it has been talking to automakers. But within the past 18 months, former Ford CEO Alan Mulally joined Alphabet’s board after leaving Ford, and John Krafcik, a Ford employee for 14 years, became CEO of Google’s Self-Driving Car Project.
If the deal occurs, it is expected to be announced during the first week after New Year’s.
F stock was up 3.4% today and GOOGL stock was up nearly a percentage point.
Abercrombie & Fitch Co. (ANF)
ANF stock also had a winning day after announcing the company hired Fran Horowitz to fill the position of president and chief merchandising officer, and simultaneously fired the President of the Abercrombie brands, Christos Angelides, who some considered a strong candidate to become the next CEO.
Horowitz moves up from just being President of ANF’s Hollister brand to take over all of the ANF brands. In addition, ANF will suspend its search for a new CEO. Ever since former CEO Mike Jeffries left the company in 2014, ANF has split the CEO role up among several executives.
ANF stock, which has been on a tear since late August, rose more than 6% on the day.
Continental Resources, Inc. (CLR)
CLR stock got a much needed break today, as oil prices rose and talk of unusual bullish action in the options market drove CLR stock 7% higher.
Option Monster reported that someone purchased 3,600 Jan $22.50 calls Tuesday morning, and that overall option volume was more than two times higher than normal for CLR stock.
Tuesday’s action stopped the downslide that CLR stock has been going through since the beginning of December.
The stock has fallen from $37 to $20 during that short period of time, mostly because of declining oil prices.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
