Dow Rises Toward 11,000; Energy Gains
CNBC.com News Editor
The Dow continued rising toward 11,000 Friday as the dollar fell after a Greek official said the debt-riddled nation has not yet sought financial aid.
Energy, consumer discretionary and telecom were the day's best performers; utilities and materials were the weak spots.
The Dowwas up near 40 points, led byDisney , Chevron, ExxonMobil.
Alcoa and Walmart were among the decliners.
Alcoa got another downgrade today: JPMorgan cut its rating to "neutral" from "overweight." Earlier this week, Deutsche Bank slashed its rating and and full-year forecast for the company amid worries about a weak first quarter.
The S&P energy sector led the market after India's Reliance Industries said it will form a joint venture with independent U.S. gas company Atlas Energy.
"The catalyst on the energy side primarily is that (Reliance) took a considerable stake in Atlas. That has the energy group flying," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus told Reuters.
Oil pricesslid to nearly $85 a barrel after hitting an 18-month intraday high on Tuesday. Some analysts attributed the drop to a technical reversal.
Despite the dip, Jerry Castellini, president and CIO of Castleark Management said he still prefers oil over gold and advised investors to buy the sector.
“You don't have to worry about the holding of the commodity, you don't have to worry about the forward curve,” he said. “You can buy companies like EOG , Occidental Petroleum, Whiting Petroleum and Brigham Exploration ."
Meanwhile,gold prices hit a year-high while the dollar fell against the euroas speculation grew that Greece may get financial aid to tackle its debt crisis.
Alcoa reports earnings on Monday, marking the unofficial kickoff to earnings season.
Overall, S&P 500 earnings are expected to be up 36.8 percent from a year ago, according to the latest survey by Thomson Reuters. It would be the second straight increase in earnings.
The first-quarter earnings trend is"definitely going to be higher," said Art Hogan, director at Jefferies.
“It’s one of those earnings seasons where we’ve had little or no pre-announcements to the downside, which probably means that the estimates for the S&P 500, which are up 36 percent year-over-year, are probably understated,” Hogan said on CNBC this morning.
Walmart , the world's biggest retailer, is cutting prices on 10,000 items in an attempt to halt slowing U.S. sales, the Wall Street Journal reported.
JCPenney jumped more than 2 percent after Goldman Sachs added the department-store stock to its "buy" list.
Overall, retailers were mixed: Consumer discretionary stocks such as Nordstrom and Abercrombie were higher while consumer staples such as Colgate-Palmolive and Walmart fell, suggesting that investors are betting on an economic recovery.
Still, investors remain worried that the strong March retail sales reported on Thursday may come at the expense of April sales.
The Dow is right around where it was at the end of last week, at 10,927.07 points. The S&P 500 and the Nasdaq are on track for weekly gains, and if all three are positive for the week, it will mark the sixth consecutive weekly rise, the first time that's happened since March and April of last year.
“We spent a week going sideways," said Hogan. "That’s probably a healthy thing coming into earnings season next week."
European shares climbed as Greek bank stocks rebounded and yield spreads between Greek government bonds and German bunds narrowed. Asian stocks closed mostly in the green with the Hang Seng leading the gains.
In the morning's economic news, wholesale inventories rose 0.6 percent in February after a 0.1-percent rise in January. Economists had expected a more modest 0.4-percent increase.
In banking news, the Wall Street Journal reported that 18 banks, including Goldman Sachs, Morgan Stanley, J.P. Morgan Chase, Bank of America and Citigroup, understated their debt levels used to fund securities trades by lowering them an average of 42 percent at the end of each of the five past quarters, to make their balance sheets look less risky.
Palm jumped more than 8 percent today amid continuing buzz that the gadget maker could be a takeover target.
Research In Motion ticked higher following news the BlackBerry maker is acquiring QNX Software, a company that makes automotive software.
Apple also rose as the company is unveiling an advertising platformfor the iPad.
TiVo shares rose after Citi put out a note saying the digital-video-recorder company is likely to merge with satellite-television provider EchoStar . EchoStar shares fell, while shares of rival Dish network rose.
And shares of Jacobs Engineering jumped amid speculation that it may be a takover target.
Shares of United parent UAL and U.S. Airways rose Thursday on news the two are in merger talks, but United pilots have now say they are "vehemently opposed" to such a combination and flight attendants have also said they don't support such a deal. Additionally, the CEO of American Airlines parent AMR , Gerard Arpey, told a Los Angeles media event that consolidation is "no silver bullet" for the airline industry.
Aetna said it's suspending new enrollment in Medicare plansand marketing to the elderly due to new government sanctions.
Shares of Massey Energy rebounded after taking a hit in recent sessions following the massive explosion at one of its mines in West Virginia that left 25 miners dead and four missing.
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