The market was on the move.
The heavy volume supported narrow rally led by tech and energy stocks upgrade and financial stocks jump despite the rising bond yields to 4.26%.
The volume was strong right from the opening, and market passed one billion shares by mid-day. The total volume on NYSE was 3.0 billion shares surpassing the previous high of the year on March 18th. The trading volume of 2.2 billion shares on NASD was also close to this year’s record. There were 273 new highs and 104 new lows on NYSE and 220 new highs and 106 new lows on NASD.
The strength in financial sector was widespread across large banks, mortgage originators, and brokers. Despite the fall in bond prices these stocks were widely favored during the session. Home builders came under heavy selling pressure as yields on 10-year note rose to 4.26%.
Tech stocks advanced as shares of Intel were upgraded by a broker. Tech rally was felt by networking stocks, semiconductors, security systems, and select computer hardware makers.
Fall in oil price to $63 per barrel helped market to sustain the gains in the last trading hours, but energy stocks still rose on upgrade on ExxonMobil and fears of rising natural gas prices.
MOVERS AND SHAKERS
Intel (
INTC: chart) was up 1% after the company’s stock was upgraded at CS First Boston to neutral from underperform, citing as a reason that the stock price now sufficiently diminishes concerns over bearish market share and descending average selling prices.
Exxon Mobil Corp. (
XOM: chart) was upgraded at Deutsche Bank to buy from hold and raised its price target to $75. Company’s stock rose 2% on expectations of higher revenue and better margins.
JDS Uniphase (
JDSU: chart) jumped 8.4% after Citigroup upgraded the company to buy from hold, and pointed as a reason improved clearness in the optical components market and the strong margin performance at Acterna.
Corning (
GLW: chart) advanced 3.2% after Merill Lynch upgraded the stock to buy from neutral, due to a favorable forecast for the company's liquid crystal display glass operations in Japan. Only a few days ago the stock was downgraded by Morgan Stanley.
American Express (
AXP: chart) shares jump $1.88 as news report suggest that bankruptcy court approved it lending plan for Delta Air.
Peabody Energy (
BTU: chart) and
Fording Trust (
FDG: chart) shares rose better than 5% during the session.
ECONOMIC NEWS
Friday morning, the Department of Commerce released its report on the U.S. current account deficit in the second quarter. The report showed that the deficit narrowed compared to an upwardly revised first quarter deficit.
The report showed that the current account deficit narrowed to $195.7 billion in the second quarter from an upwardly revised $198.7 billion in the first quarter. Despite the decrease, the deficit still ranked as the second highest on record.
Economists had expected the deficit to fall to $194.5 billion from the $195.1 billion deficit originally reported for the first quarter.
The Commerce Dept. said that the deficit amounted to 6.3 percent of the gross domestic product in the second quarter. The deficit in the first quarter ran at 6.5 percent of GDP.
The nation's trade deficit helped to keep the current account deficit near record levels, representing about 90 percent of the shortfall. The trade deficit rose to $173.3 billion in the second quarter from $173.1 billion in the first quarter.
INTERNATIONAL MARKET NEWS
Asian-Pacific benchmarks ended mostly down, reflecting confusing economic news coming from the U.S. The Japanese stocks declined 0.2% on tech stock issues sell-off because of negative earnings prospects of high-tech companies. Across the region, Hong Kong’s Hang Seng lost 0.4%, while South Korea’s Kospi advanced 0.4%.
European stocks made solid gains and closed higher on forthcoming German general election, strong resource stocks and 17-year high gold futures. The German DAX 30 rose 1.6% rebounding from recent losses, the French CAC 40 advanced 0.7%, and London’s FTSE 100 climbed 0.5%.
ENERGY, METALS, CURRENCIES
Oil prices fell $1.75 to $63 a barrel on lower OPEC demand forecast. OPEC suggested that world oil demand will decline by 150,000 to 200,000 barrels a day. The daily demand is still expected to be better than 82 million barrels a day. Heating oil fell 7 cents to $1.83 a gallon. Gasoline lost 11 cents to $1.78. London Brent fell $1.38 to $62.28.
