Stocks Shake Off "Blues" To Move Higher
CNBC Executive News Editor
Stocks are firming after the last few anxious sessions though the U.S. dollar has moved to a new low, oil is back on the rise and gold is at a 28-year high. The ever sunny Google is hitting a new high before the opening bell after Sanford C. Bernstein upped its target on the stock to $850 from $720.
Asian markets closed mixed. Japan ended slightly lower. An index gauging the country's economic outlook fell for a second month and hit a decade low of zero, a sign the Japanese economy may be in for a tough time. Alibaba.com, a hot Chinese internet company, debuted in Hong Kong and immediately tripled. In Europe, stock markets are higher on buying in financial and mining shares.
Gold hit a high of $826.40 this morning. The dollar slumped to an all time low against the euro of $1.4571 this morning. Oil is just above $96 per barrel, up about $2 this morning.
John Kilduff, MF Global senior vice president, says if oil keeps running it could hit $100 soon. "We’re likely to get it tomorrow, after another bullish inventory report. BUT – (Former Prime Minister Benazir) Bhutto just landed in Islamabad and there was a pipeline blast in Yemen that has knocked off 155k barrels of crude. So there are plenty of combustibles out there," said Kilduff, a CNBC contributor, in a brief note.
Financials in Focus
Fear in the financial sector, which choked stocks for the last several sessions, dissipated a bit this morning. Citigroupnamed risk expert Richard Stuckey to head a new team to focus on managing its subprime mortgage portfolio. CNBC's Charlie Gasparino says Vikram Pandit, who heads the Citi institutional client group, and NYSE Chairman John Thain are in the lead to fill the Citigroup ceo.
CNBC's retail reporter Margaret Brennan tells us that Morgan Stanley took a knife to the retail sector, downgrading it to cautious from in line. Morgan expects 60% of retailers to have lower margins in 2008 and earnings per share growth of just 9%, compared to the street's estimate of 14%.
And the worst comment from Morgan: "2007/2008 looks to us like the new 89/90" just before the housing recession of 1990-1991. Speaking of housing recession, Beazer Homes plans a $230 million charge to abandon land option contracts and for inventory impairment. It had a huge number of cancellations as did Hovnanian , which said its sales pace in October deteriorated significantly and cancellations for fourth quarter were 40%.
Brennan tells us Morgan is underweighting Sears, Nordstrom,Urban Outfitters and Jones Apparel as well as others. On the defensive plays list, they have Target, Wal-Mart,CVS, Nike and Walgreens.
Other stocks in the news:
* Valero, like others pressed by refining margins, said third quarter profits fell 20% to $1.60 billion.
* Microsoft was removed from Goldman, Sachs conviction buy list.
* Citigroup reiterated a sell on Ford saying the company's agreement with the UAW sacrifices some platform flexibility.