S&P 500 Breaks Above 1,000
S&P 500 BREAKS ABOVE 1000
Bullish reports on manufacturing, housing and banking sent the S&P 500 barreling higher; taking it past 1,000 for the first time since early November.
In fact, all the major indexes rose more than 1% on Monday, with the Dow Jones industrial average jumping 115 points.
The gains were spread across many sectors -- positive ISM data and rising commodity prices lifted energy and material stocks, while stronger earnings reports from European banks lifted shares of financials .
How much higher can we go?
With these moves in the S&P there’s pressure on asset managers to put money to work, says Joe Terranova. And heading into the end of the year I think there’s more room to run.
I agree; investors are scared to death to be on the sidelines, adds Tim Seymour.
Considering the moves in the S&P, as a hedge fund manager I can’t risk being under-invested and missing the moves, echoes Karen Finerman.
I think when retail investors see the S&P at 1,000 they will probably get back into the market, adds Steve Grasso. So more money could be coming in from the sidelines.
'CLUNKERS' CATAPULT AUTO SALES
Adding to the positive sentiment, Ford said on Monday that U.S. auto sales rose 2.3% in July, its first year-over-year monthly sales increase since November 2007, supported by the U.S. government "Cash for Clunkers" program which took effect on July 24, a week before the end of the July sales period.
Officially called the Car Allowance Rebate System, or CARS, the program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle.
Congress approved the plan early in July, but the government considered suspending it on Thursday after an overwhelming response threatened to deplete the $1 billion allocated for the rebates.
But the program continued and the House voted to allocate another $2 billion to keep the sales going. Now, the program's fate hangs on whether the Senate will vote to extend more funds this week.
What should you know?
The expectation in Washington is that cash for clunkers will be extended and by $2 billion, explains CNBC’s Phil Lebeau. But Congress has to make its move soon or the money will dry up.
Personally, I don’t get cash for clunkers, says Karen Finerman. It only creates a one-time gain for the automakers and then we get right back to where we were.
What’s the trade?
I think it’s time to get off the Ford trade and move to the sidelines, counsels Joe Terranova.
BANK OF AMERICA SHAKES OFF SEC
Shares of Bank of America closed higher despite word that the firm agreed to pay $33 million to settle charges that it made false and misleading statements to investors about bonuses at Merrill Lynch.
And on a related issue, Bank of America has begun restructuring its top management, including hiring former Citigroup CFO Sallie Krawcheck, as a prelude to finding a successor for CEO Ken Lewis, CNBC has learned.
What’s the trade?
All that matters is that Bank of America is improving its balance sheet, says Joe Terranova. Personally, I see every reason to be long.
Also, Sallie Krawcheck is a great hire, adds Karen Finerman. That could be bullish. I think she’s a great person.
NASDAQ TOPS 2000
Apple, Google and Microsoft led technology shares higher with the Nasdaq closing above 2,000 for the first time since early October.
What’s the tech trade?
I think the move bodes well for the entire tech sector because Apple, Google and Microsoft all have great balance sheets, explains Joe Terranova, and it makes sense to me they start putting that money to work on research and development in an attempt to get an competative edge.
FIRST ON FAST: MOLSON COORS CEO
Shares of Molson Coors surged on Monday after the company reported a higher-than-expected quarterly profit buoyed by increased beer prices and savings from its U.S. joint venture with SABMiller Plc.
However, for the rest of the year, Molson Coors expects challenges.
What lies ahead? Find out from our First On Fast interview with Molson Chief Executive Peter Swinburn. Watch the video now!
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Trader disclosure: On Aug 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (MSFT), (MCD), (AMZN); Terranova Works For (VRTS); Terranova Is Short (TM); Seymour Owns (AA), (AAPL), (BAC), (BHI), (F), (RIMM), (YHOO), (EEM); Seymour's Firm Is Short (PBR); Seymour Owns (POT); Finerman Owns (RIG); Finerman's Firm Owns (MSFT), (NOK), (PBR), (RIG), (TBT), (WMT); Finerman's Firm And Finerman Own (BAC) Preferred Shares; Finerman's Firm And Finerman Own (WFC) Preferred Shares, Finerman's Firm Is Short (WFC); Finerman's Firm Is Short (USO), (IJR), (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Short (WFMI); Grasso Owns (BAC), (BA), (COST), (CSCO), (FAZ), (OXY), (V), (WMT), (XLF); Grasso's Company Owns (ABT), (GERN), (MSFT), (NWS.a), (NYX), (PDE), (RDC), (ROK), (XOM), ;Grasso's Company Owns (SDS); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU)
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