Stocks Eke Out Gains as Energy, Banks Rise
Special to CNBC.com
Stocks finished in positive territory after wavering much of the afternoon as the dollar rose for a third day ahead of a meeting of G20 leaders that begins Thursday.
The Dow Jones Industrial Average rose 10.29 points, or 0.1 percent, to close at 11,357.04 after finishing lower in the previous session as concerns over European sovereign debt pushed the dollar higher against the euro.
Bank of America and Chevron led the blue chip index higher, while Boeing and Wal-Mart fell.
The S&P 500 rose 5.31 points, or 0.4 percent, to 1,218.71, while the Nasdaq rose 15.80 points, or 0.6 percent, to 2,578.78. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 19.
Among key S&P sectors, financials, energy and consumerdiscretionary stocks rose, while utilities and consumer staples fell.
Investors were focused on how the G20 meeting in Seoul later this week will affect currency prices. Meanwhile, the dollar continued to rise against a basket of currencies as European debt troubles once again took center stage. Stocks have been moving inversely to the dollar.
The good news on the jobs front should have given more support to the market, said Tim Speiss, head of personal wealth advisors at at EisnerAmper, but he wasn't concerned about a shorterm downdraft interrupting the upward trajectory for stocks.
That's because large cap stocks are valued at less than 10 times earnings today versus 30 to 35 times earnings 10 years ago, Speiss said. And today, companies have cleaned up their balance sheets and are running much leaner and more efficiently, so they are poised to do well, particularly as the economy gains strength, he said.
"What valuations are now compared to 10 years ago portends that large cap equities will do very well," Speiss said.
The rise in U.S. jobless claims pushed gold prices down near $1,390 an ounce from record highs, as investors became skittish about silver after the Chicago Mercantile Exchange raised margin requirementsfor silver futures.
The debate over the impact of the Fed's quantitative easing would not be raised at the G20, according to one G20 official. But the summit is expected to produce an agreement on a more flexible foreign exchange policy.
A debate over currency markets has been raging all week after comments from World Bank President Robert Zoellick in the Financial Times were interpreted as a call for a return to the gold standard. Zoellick has since told CNBC that he is not in favor a gold-backed currency system, but a more international currency arrangement with less dollar weighting.
Boeing led the Dow lower for most of the session after a 787 test flight was forced to make an emergency landing.
And Assurant plummeted to the bottom of the S&P 500 after news in the American Banker that the insurer is involved in "forced-placed insurance" schemes involving mortgage servicing.
In the day's earnings news, General Motorsposted a $2 billion profit, driven by an accelerating turnaround in North America as it rushes to complete an initial public offering of stock set for next week. The results were better than rivals Ford and Chrysler.
Macy's shares fell slightly even after the department store chain reported higher than expected sales, crediting its strategy of catering to local tastes as well as improved sales at its Bloomingdale'schain.
Elsewhere, PoloRalph Lauren jumped more than 7 percent after the apparel retailer reported a 16 percent increase in earnings and posted an optimistic outlook.
Campbell Soup dropped after the food manufacturer said earnings for next year will rise only 2 percent to 4 percent, down from its previous forecast of a 5 percent to 7 percent increase, citing slowing sales despite discounting.
Cisco shares were largely flat ahead of the tech giant's earnings after-the-bell tonight.
In other tech news, Google announced it will give its employees a 10 percent pay increase at the start of next year, according to website Silicon Alley Insider.
Meanwhile, global smart phone sales nearly doubled in the third quarter, and Apple was cited as one of the top five bestselling manufacturers, according to a recent survey from Gartner. Although Nokia , Samsung Electronics and LG maintained their rankings as the top three cell phone makers, Apple broke into the top five for the first time with its iPhone. It has surpassed BlackBerry maker Research In Motion for fourth place.
On the energy front, Halliburton rose almost 5 percent after the oilfield services company said it plans to increase capital spending next year by about a fifth at least, as it targets new opportunities outside its core U.S. market.
Oil prices climbed above $87 a barrelafter news of a big drop in inventories outweighed the impact of a stronger dollar and a fall in Chinese oil imports. Chevron and ConocoPhillips were among oil companies that gained around 1 percent.
Invesco shares fell after news Morgan Stanley sold its stake in the investment manager for a 7.4 percent discount to Invesco's closing price on Tuesday.
BJ's Wholesale , meanwhile, soared more than 10 percent after a report in the New York post that the big-box retailer was considering options, including a sale to a private-equity firm.
Volume on the consolidated tape of the New York Stock Exchange was 4.5 billion shares. On the NYSE floor, 1.1 billion shares changed hands.
The bond market extended lossesafter the government auctioned $16 billion of 30-year bonds, which had a yield of 4.320 percent and a bid-to-cover ratio of 2.31. Bond markets are closed tomorrow for Veterans Day.
On the economic front, initial claims for unemployment fell by 24,000 to 435,000from a revised 459,000 for the week ended Nov. 6, according to the Labor Department. The four-week moving average of claims fell to 446,500, the lowest since September 2008. The news was a positive sign for jobs growth.
Also, import prices rose 0.9 percent in October, while export prices rose 0.8 percent, narrowing the trade deficit, as the weaker dollar gave a boost to U.S. exports.
Mortgage loan applicationsfor both home loans and refinancings rose for the week ended Nov. 5, as interest rates remained at record lows, the Mortgage Bankers Association said. The MBA's seasonally adjusted index rose 5.8 percent.
On Tap This Week:
WEDNESDAY: After-the-bell earnings from Cisco.
THURSDAY: Veterans Day – Bond market closed, stocks and futures markets open, G20 mtg. begins, Earnings from Kohl’s, Disney and Nvidia.
FRIDAY: APEC CEO summit, Consumer sentiment, Earnings from DR Horton and JCPenney.
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