U.S. markets surged higher again for the second consecutive day, as oil had its best day since March 2009, gushing 10% higher on short covering following a lower-than-expected crude oil inventory, and there was more good news on the national economic front.
A pull back later in the day threatened to derail the earlier gains, but the market rallied once more into the close.
Second-quarter gross domestic product was revised from an annualized 2.3% to 3.7%. This was a very notable increase, and investors were pleased by the report.
In addition, the Labor Department reported that weekly jobless claims were at 271,000, marking the first decline since mid-July. Also, the National Association of Realtors reported that July pending home sales were up 0.5%, which was the same as the revised reading from June.
The Dow Jones Industrial Average rose 2.2%, while both the S&P 500 Index and Nasdaq Composite were 2.4% higher. Every sector was up again today, with energy and basic materials stocks soaring more than 4%. But the three stocks that manage to win big today were Tesla Motors Inc (NASDAQ:TSLA), Avago Technologies Ltd (NASDAQ:AVGO) and Freeport-McMoRan Inc (NYSE:FCX).
And here’s why.
Tesla Motors Inc (TSLA)
TSLA stock was in high gear today, after Consumer Reports rated Tesla’s new Model S P85D a perfect score:
“”It really blew up our system … It actually scored above 100 in our system before we had to make some changes to account for this car.”
In fact, Consumer Reports called Tesla’s P85D the best car it has ever tested.
Unfortunately, the P85D is not expected to see high sales volume, because it’s still slapped with a $130,000 price tag. Nonetheless, investors liked what they heard, and TSLA stock finished the day up more than 7% on strong volume.
Avago Technologies Ltd (AVGO)
AVGO stock blistered up over 8% after reporting third-quarter earnings late on Wednesday of $2.24 a share, while the Street estimates were for $2.14 a share. Revenue of $1.75 billion was pretty much the expected amount. Earnings were up 78% year-over-year and revenue was up 36%. However, guidance for the current quarter was a little bit less than what was expected by the Street.
Avago is currently in the process of purchasing Broadcom Corporation (NASDAQ:BRCM). Avago is best known as the company that manufactures the chips for the Apple Inc. (NASDAQ:AAPL) iPhone.
Freeport-McMoRan Inc (FCX)
Even in the current environment of the lowest copper prices since 2009, it was a great day for FCX stock, which gained more than 28% on the day. The copper producer announced it would be cutting production levels, exploration, administrative costs and capital expenditures for 2016 (from $5.6 billion to $4.0 billion).
FCX is citing “weak and uncertain market conditions,” after the meltdown of the Shanghai stock market led to another decline in copper prices.
FCX stock has fallen about 60% this year, but recently has seen some insider buying among its executives (which could be a bullish signal), as the stock price (at $23 in May) recently hit a low around $8.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
