Stocks Turn Higher After High Court Ruling
Stocks turned higher Monday after the Supreme Court struck down a key part of the Sarbanes-Oxley law, which regulates corporate accounting.
The Supreme Court ruled that a part of that law was unconstitutional — the part that would create a public oversight board for corporate accounting practicies. The decision could put pressure on Congress to revisit the Sarbanes-Oxley law, which was created after a number of accounting scandals include Enron and Tyco.
The Dow Jones Industrial Average jumped nearly 50 points, led by Coca-Cola , Cisco and Intel , after a shaky morning.
Today's economic report was a mixed bag: Personal incomerose 0.4 percentin May,while spending climbed 0.2 percent, slightly higher than expected. But the 4 percent savings rate indicated caution among consumers as weakening data have raised the threat of a double-dip in the economy.
Offering some encouragement to the market, President Obama pledged to tackle the country's ballooning public deficit while at the G20 summit over the weekend.
Obama has previously warned that cutting spending too quickly could endanger the economic recovery. But Sunday's comments could now signal a shift to more aggressive cost-cutting measures.
Material and energy stocks were among the biggest decliners amid worries about Tropical Storm Alex.
Banking stocks were mixed as the death of Sen. Robert Byrd (D-W.Va.), the longest-serving member in the chamber, threatened the passage of the financial-reform bill. Byrd had secured several Democratic votes, which are now uncertain in the wake of his death.
Boeing was among the biggest decliners on the Dowas financial trouble at a Dubai firm could cause the company to renegotiate an order for 220 planes from Boeing, a French newspaper reported. This came after Air China said last week it would buy 20 Boeing planes.
Apple shares rose after the company reported it has sold 1.7 million iPhone 4sin the first three days, the strongest product launch for Apple ever.
US-traded shares of BP rose after the company denied a comment from a Russian official that CEO Tony Hayward was resigning. Meanwhile, a tropical storm headed for the Gulf of Mexico looked like it may not barrel through the oil spill but it still could generate significant waves at the cleanup site.
Oil prices fell back toward $78 a barrel. Some M&A news in the sector: Offshore oil and gas driller Noble agreed to buy privately-held FDR Holdings for $2.16 billion.
The earnings calendar is very light Monday, but Barnes & Noble , Micron and SMSC are due to report figures after the closing bell.
Electric-car maker Tesla raised the number of shares it will sell in its IP by 20 percent, a good sign that demand for the offering is strong. That stock is expected to debut early this week.
TUESDAY: Case-Shiller home-price index; consumer confidence; Tesla IPO expected
WEDNESDAY: FCIC hearing; weekly mortgage apps; ADP employment survey; weekly crude inventories; Fed's Lockhart speaks
THURSDAY: Weekly jobless claims; ISM manufacturing index; construction spending; pending-home sales; June auto sales
FRIDAY: June jobs report; factory orders
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