Dow Briefly Pops Above 11,000; Chevron Gains
CNBC.com News Editor
Stocks advanced Friday, with energy stocks in the lead after an upbeat outlook from Chevron and a big natural-gas deal.
The Dow briefly broke above 11,000 — the first time it's been above that level since September 2008 — then settled a few points below that mark.
That wasn't the only benchmark this week: The CBOE volatility index closed at its lowest since October 2007. The 10-year yield crossed 4 percent for the first time, oil topped $87 a barrel and the Thomson Reuters same-store sales index hit a new record in March.
It was the sixth straight up week for stocks, the longest streak since April 2009.
Chevron was the biggest gainer on the Dow — today and for the week — after the oil giant delivered an upbeat outlook, saying its refining and marketing arm would return to profitability in the first quarter.
Adding fuel to the commodity fire was some M&A activity in the sector: Atlas Energy
Oil ended the week below $85 a barrelafter hitting an 18-month intraday high above $87 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 on CNBC today. “You can buy companies like EOG , Occidental Petroleum, Whiting Petroleum and Brigham Exploration ."
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.
Alcoaskidded after the aluminum maker got another downgraded 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.
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.
The problem is a lot of that first-quarter optimism has already been priced into the market, so unless it's a blowout earnings quarter, it may not mean much to the market.
While investors wait on earnings and worry about Greece, a debate has been brewing in the market if we're about to begin a correction.
But Oppenheimer's Brian Belski said not so fast — he thinks there's still more room for this market to run.
"We're acting and trading very defensively and not seeing the forest for the trees — what that's telling us is that this is a classic recovery. It has its issues but we still think we head higher throughout the year."
Walmart shares slipped as the world's biggest retailer is cutting prices on 10,000 itemsin an attempt to halt slowing U.S. sales.
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.
In the day's economic news, wholesale inventoriesrose 0.6 percentin 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 11 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.
Volume was light, with just 7.93 billion shares changing hands on the three major exchanges, nearly two billion below average. Advancers outpaced decliners on the Big Board, roughly 7 to 3.
On Tap for Next Week:
MONDAY: Earnings from Alcoa
TUESDAY: Trade balance; import/export prices; Fed's Lacker speaks; earnings from Intel
WEDNESDAY: Weekly mortgage apps; CPI; government's retail-sales report; Fed's Pianalto, Lacker, Warsh & Fisher speak; business inventories, crude inventories; beige book; earnings from JPMorgan Chase
THURSDAY: Taxes due; Empire state manufacturing survey; industrial production; Philly Fed report; Fed's Lacker, Bullard & Lockhart speak; housing-market index; earnings from Google, AMD
FRIDAY: State unemployment rates; housing starts; Fed's Warsh speaks; consumer sentiment; earnings from Bank of America, GE, Mattel & Gannett
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