Stocks Jump; Cisco Soars 10%; Facebook Down 6%
Stocks had their best session in nearly two weeks Thursday after German Chancellor Angela Merkel reiterated her support for the ECB's plans to fight the euro zone crisis and Dow component Cisco Systems hiked its dividend 75 percent.
The Dow Jones Industrial Average, S&P 500 and the Nasdaq all posted their biggest gains in two weeks. The S&P 500 has moved less than 0.1 percent in three of the past six sessions.
The Dow added 85.33 points, or 0.65 percent, to end at 13250.11, while the S&P 500 climbed 9.98 points, or 0.71 percent, to close at 1415.51. The Nasdaq jumped 31.46 points, or 1.04 percent, to finish the day at 3062.39.
Cisco paced the advance, while Wal-Mart led the blue-chip laggards.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, slipped to just above 14, a five-year low. (Read More: Marc Faber—S&P 500 Could Decline by 10%).
Among key S&P sectors, techs and materials led the gainers, while utilities and health care slipped.
Stocks took another leg higher today after German Chancellor Angela Merkel reiterated her support for ECB President Mario Draghi's strategy to help the euro zone during her visit to Canada, where she held talks with Prime Minister Stephen Harper on the ongoing sovereign debt crisis. (Read More: No Growth in Euro Zone Until 2013?).
Cisco jumped after the tech bellwether posted quarterly results that edged past estimatesand boosted its dividend by 75 percent. In addition, at least 10 brokerages raised their price targets on the firm. Still, the Dow component warned that weak economic conditions in Europe will continue to weigh.
Wal-Mart declined after the big-box retailer forecast full-year earnings that could fall short of Wall Street expectations.
On the economic front, factory activity in the mid-Atlantic area contracted for the fourth-straight month in August, according to the Philadelphia Fed survey.
Weekly jobless claims rose last weekto a seasonally adjusted 366,000, according to the Labor Department, in line with expectations. And housing starts unexpectedly fell in July to a seasonally adjusted annual rate of 746,000 units, while gains from June were revised lower, according to the Commerce Department. (Read More: Homebuilders Begin to See Credit Thaw).
“It’s been a mixed bag of economic news, but not bad enough for the Fed to move so we’re bumping along,” said Brian Battle, vice president of trading at Performance Trust Capital Partners. “Good news is that we’re not getting worse.”
Equities drifted sideways for most of the week with the S&P 500 latching onto its position above 1,400. Volumes have also been extremely light due to seasonality and little news from Europe. (Read More: Here's What'll Move Markets Next Month).
“We’re going through a soft patch, but we have enough resilience to overcome it,” said Harry Clark, CEO of Clark Capital Management Group.
Clark added that the market seems “overextended” and called for a 5 to 8 percent pullback before seeing a rebound near year-end. (Read More: How to Make Money in Stocks This Year).
Facebook slumped to new all-time lows after the company's first lockup period came to an end. Shares have lost more than 45 percent of their value since the social-networking giant's market debut in May.
Other social-media companies also tumbled, including Groupon and Zynga .
Dollar Tree fell after the discount-store chain forecast quarterly results below expectations. Separately, the stock suffered a mini flash crashnear the market open, plunging 18 percent in the first two seconds of trading before rebounding to regular levels.
Sears rallied after the retailer posted a loss that matched expectationsas lower expenses helped offset weaker-than-expected sales.
Apparel retailers Gap and Aeropostale , along with chipmaker Marvell Technology , are scheduled to report earnings after the closing bell.
Oracle was higher after the SEC charged the tech company
Electronic Arts jumped on news that the videogame publisher may be exploring a sale, according to sources.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
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