U.S. markets snapped their three-day losing streak on favorable news from Europe and a solid day in the energy markets.
The day began in positive mode with European Central Bank (ECB) President Mario Draghi saying it’s likely that interest rates will remain the same or be even lower for quite awhile, due to increased downside risk. Draghi even indicated, to the delight of The Street, that further stimulus might soon be in order.
Crude oil snapped back today as well, rising well over 5%, and to back over $29 a barrel. This occurred despite a greater-than-anticipated increase in oil and gasoline stockpiles. It was actually a relief rally, as some expected the news to be even worse.
Elsewhere, in U.S. economic news, the U.S. Labor Department reported that jobless claims are at their highest level since last July, as 293,000 claims were made this past week. The Street’s estimate was for only 278,000, indicating a potential slowdown of the economy.
Claims below 300,000 usually indicate a firm labor market, but the number is now creeping up close to that mark.
By the end of the day, the Dow Jones Industrial Average was up 0.7%, while the S&P 500 was 0.5% higher. But interestingly, the Nasdaq finished flat on the day. Most sectors were showing green by the closing bell, and unlike yesterday, energy and basic materials stocks were leading the markets.
Technology stocks also had a good day, as evidenced by strong performances by Micron Technology, Inc. (NASDAQ:MU) and Cypress Semiconductor Corporation (NASDAQ:CY). Those two and energy play Anadarko Petroleum Corporation (NYSE:APC) are three of today’s best stocks.
Micron Technology, Inc. (MU)
MU stock shone today after Morgan Stanley (NYSE:MS) crowed about the company, saying there may be an 80% upside to reach its $18 target price, with “limited downside” to the stock.
Of course, in order to reach that 80% mark, Morgan Stanley said that MU first has to see some improvement in its cost structure and earnings. But investors ignored that part and jumped all over the stock, sending it up nearly 8% on heavy volume of 50.3 million shares — more than twice its daily average.
MU stock last saw $18 a share in October, but has been in a downtrend since. The stock was heavily oversold and due for at least a bounce.
Cypress Semiconductor Corporation (CY)
MU wasn’t the only technology making waves today. CY stock blasted over 7% higher as the semiconductor company reiterated its fourth-quarter guidance for EPS and revenue, falling in line with Wall Street’s estimates.
CY said it will have EPS of 11 cents to 15 cents, along with $430 million to $460 million in revenue. But really boosting CY stock was their reiteration to also buy back $450 million shares of company stock over a long period of time. CY announced they will begin these purchases starting tomorrow.
The timing of the company stock purchase is very good, as the current price is nearly 50% below the $15.50 a share where CY stock traded only 11 months ago.
Anadarko Petroleum Corporation (APC)
With oil’s renewed strength today, APC led a large group of energy stocks higher. Anadarko announced that its Heidelberg Gulf of Mexico oil project has finally begun to produce oil. This occurred some four months ahead of schedule, and below budget as well.
The project may produce as much as 80,000 barrels of oil per day, as well as natural gas. And while more oil will contribute to the current oversupply, this Heidelberg project will surely boost APC’s bottom line. APC rose nearly 10% on the news.
One of APC’s partners on the Heidelberg project is Freeport McMoRan (NYSE:FCX), and FCX stock was up over 6% today as well.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
