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CNBC ON DIGG

Stocks Rally, Hold Gains After 7-Year Auction

Published: Thursday, 30 Jul 2009 | 1:43 PM ET

Text Size

By: Cindy Perman
Writer

Stocks rallied Thursday as investors were encouraged by the latest jobless report and round of corporate earnings.

The Dow Jones Industrial Average was up more than 1.6 percent, putting the average above 9,200. The S&P 500 was closing in on the 1,000 mark and the Nasdaq topped 2,000.

It was the highest intraday level for the Dow and S&P since November, and for the Nasdaq, since October.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

Halftime Report: Profiting From Optimism in This Rally

Jobless claimes rose by 25,000 last week to 584,000 but investors were encouraged as talk on the Street put the number as high as 600,000. Plus, the four week-moving average, which smooths out weekly fluctuations, fell to its lowest level since Jan. 24. And continuing claims were the lowest since April.

Stocks held onto their gains after the latest Treasury auction, which was met with decent demand. The Treasury auctioned $28 billion of seven-year notes at a high yield of 3.369 percent. The bid-to-cover ratio was 2.63, slightly above the recent average of 2.4.

This came after a a relatively strong auction of 2-year notes Tuesday and a somewhat weak auction of 5-year notes yesterday.

Shares of General Electric [GE Loading... () ] surged after Goldman Sachs upgraded the stock to "buy" from "neutral," after comments from House Finanical-Services Chairman Barney Frank, who suggested the conglomerate, and CNBC parent, may not have to break up its finance arm.

And CIT Group [CIT Loading... () ] gained more than 10 percent after the insurer secured $3 billion in credit from Barclays Bank.

Shares of PennyMac [PMT Loading... () ], which buys distressed home loans and is run by several former Countrywide Financial executives, fell on their debut on the New York Stock Exchange, after the offering fell short of expectations.

In this morning's wave of earnings, ExxonMobil [XOM Loading... () ] reported its profit plunged 66 percent amid the drop in oil prices. And Royal Dutch Shell said its profit dropped 70 percent.

FOR INVESTORS

This came after similar reports of a sharp drop in profits due to sliding oil prices from ConocoPhillips and BP earlier in the week. Still to come: Results from Chevron [CVX Loading... () ] are due out before the bell Friday.

Oil actually rose Thursday, climbing about $2 to above $65 a barrel.

And Travelers [TRV Loading... () ] delivered its first earnings report since being added to the Dow 30. The insurer said its profit fell 20 percent and missed its target.

Dow Chemical [DOW Loading... () ] posted a surprise profit and said the U.S. economy has bottomed.

A couple of positive readings on consumer-products companies: Colgate-Palmolive [CL Loading... () ] beat expectations, helped by cost-cutting measures, and backed its outlook. Motorola [MOT Loading... () ] reported a small profit, while revenue slipped just slightly and the handset maker boosted its cash reserves.

Elsewhere in tech land, Alcatel-Lucent, the world's biggest provider of fixed telecom equipment, reported a quarterly loss but said it hoped to be "moderately profitable" in 2010.

The after-the-bell list for today includes: Dow component Walt Disney [DIS Loading... () ] and MetLife [MET Loading... () ].