Wednesday, December 15, 2010

Stocks Near 2-Year Highs; Bonds Suffer

Stocks Near 2-Year Highs; Bonds Suffer

By MARK GONGLOFF

Stocks crept to a two-year high on Tuesday on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 back of positive economic news and a fresh commitment by cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Federal Reserve to keep pumping cash into cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 markets.

Investors are dealing with a busy schedule of economic indicators and news, while preparing for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Federal Open Market Committee policy announcement at 2:15 pm. Stocks got an early lift on strong retail sales data, but Best Buy swooned on a poor earnings report. Donna Kardos Yesalavich, Kathleen Madigan and Michael Casey report.

.The rally was clouded, however, by anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r spike in government-bond yields, sending rates on 10-year Treasury notes to a seven-month high, and anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r brutal day for municipal bonds, whose rates rose to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 highest levels since March 2009.

Though interest rates on Treasurys are rising partly because of better prospects for economic growth, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y also could pose a challenge to housing and ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r sectors of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 economy.

The Dow Jones Industrial Average rose 47.98, or 0.4%, to end cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 day at 11476.54, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 blue-chip measure's highest close since Sep. 8, 2008, a week before cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Lehman Brocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365rs bankruptcy triggered a global financial crisis.

The Nasdaq Composite index rose 2.81, or 0.1%, to 2627.72. The Standard & Poor's 500-stock index rose 1.13 points, or less than 0.1%, to 1241.59, its highest close since Sep. 19, 2008.

Stocks barely registered cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest Fed policy meeting Tuesday afternoon, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 results of which surprised roughly no one. Policy makers kept overnight interest rates unchanged and pledged again to buy $600 billion in Treasury debt through next June in an effort to support risk-taking and economic growth.

But this easy-money spigot has already helped drive investors into stocks and ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r risky assets, contributing heavily to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Dow's 18.5% rally since early July. And few investors are willing to bet cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 cash-fueled rally will end any time soon.

"Equity guys love this. The more stimulus cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 better for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365m," said Joe Saluzzi, co-founder of Themis Trading in Chatham, N.J. "It's still this momentum-fueled craziness, this performance-chasing type of rally."

The risk-taking appetite was whetted early Tuesday with a batch of improved economic numbers. November retail-sales data from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Census Bureau topped forecasts, and small-business sentiment improved to its highest level in three years, according to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 National Federation of Independent Business.

Also, corporate treasurers turned noticeably more optimistic in early December, according to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest survey of chief financial officers by Duke University and CFO Magazine.

"There are still obviously risks and uncertainties out cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365re, but this is cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 best survey we've had since before cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 recession," said Duke finance professor John Graham, director of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 survey.

But cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 good economic news has contributed to an ongoing crunch in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Treasury market. The 10-year Treasury note ended Tuesday yielding 3.457%, its highest closing yield since May 17. Bond yields and prices move in opposite directions.

The 10-year note yield has surged more than a full percentage point since early October, driving mortgage rates higher and snuffing out a refinancing boomlet that had put billions of dollars in cash in consumers' pockets.

The 10-year yield has returned to its levels before cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 market started pricing in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 latest Fed bond-buying program, noted David Ader, head of government-bond strategy at CRT Capital. "Is this cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 level of rates that makes cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Fed nervous?" he asked in a note. "Well, it was in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 second quarter of 2010."

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.Rates jumped in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 hour after cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Fed's decision, for little apparent reason, possibly contributing to a late-day pause in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 stock rally. Selling has led to more selling in recent weeks as traders rush to cash in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir still-profitable Treasury investments before year-end.

"This selloff has become a vicious, as opposed to a virtuous, cycle," said Russ Certo, co-head of rate trading at Gleacher & Co., a boutique investment bank and bond dealer.

Commodities were mixed on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 day. Nymex crude-oil futures fell 33 cents to $88.28 a barrel. Comex gold edged up $6.30 to $1403.60 per ounce.

Meantime, muni bond prices fell sharply for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 second day Tuesday, as investors worried about cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 impact of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 end of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Build America Bond borrowing program.

The yield on a closely watched index of high-grade, tax-exempt 30-year muni bonds rose to 4.81%, its highest level since March 2009, according to initial indications from Municipal Market Data.

Anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r dark spot for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 market was Best Buy, which tumbled $6.18, or 15%, to $35.52, after cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 company issued a dour report for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 quarter ended Nov. 27, which included Black Friday. Best Buy's earnings came in well below analysts' estimates as revenue unexpectedly fell. The consumer electronics retailer also cut its earnings view for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 year.

Bank stocks also fell, including Dow components J.P. Morgan Chase, down 0.72, or 1.73%, to 40.79, and Bank of America, off 0.14, or 1.12%, to 12.40.

The Dow was mainly led higher by technology giant IBM, up 1.54, or nearly 1.1%, to 145.82.

Among ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r stocks, Amgen rose 2.65, or 4.9%, to 56.76. The biotechnology company said a study of its key bone drug Xgeva showed it helped prostate-cancer patients live longer without cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 disease spreading to cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365ir bones.

HCP edged up 44 cents, or 1.4%, to 32.96, after cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 real-estate investment trust said it will buy all of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 real-estate assets of privately owned nursing-home operator HCR ManorCare for $6.1 billion in a cash-and-stock deal.

Sanderson Farms rose 2.33, or 5.5%, to 40.15. The poultry producer's fiscal fourth-quarter earnings more than doubled as average market prices rose 3.2% and margins improved.

C.R. Bard advanced 3.52, or 4.1%, to 89.57. The medical-device maker said it is targeting double-digit earnings growth next year amid a boost from a stock buyback plan, and announced restructuring measures that will include job cuts.

Williams Partners LP slipped 2.42, or 5%, to 46.50. The natural-gas company said its planned sale of common units, which was raised in size to at least 8 million units, priced at an estimated $47.55 each, a 2.8% discount to Monday's close.

—Matt Phillips,
Romy Varghese
and Donna Kardos Yesalavich contributed to this article.
Write to Donna Kardos Yesalavich at donna.yesalavich@dowjones.com

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