Thursday, May 28, 2009

Wall Street Jumps On Relief Over Debt Auction, Chevron Rallies

. Thursday, May 28, 2009

By stockOzone team

US stocks finished higher on Thursday as investors heaved a sigh of relief after the Treasury Department saw strong demand at an auction of $26 billion in seven-year notes. Better than expected economic data also lifted optimism. The Dow Jones Industrial Average climbed 103.78 points or 1.25% to finish at 8,403.80. The S&P 500 advanced 13.77 points or 1.54% to end at 906.83. The Nasdaq Composite rose 20.71 points or 1.20% to 1,751.79.

U.S. Treasuries bounced back on Thursday and yields retreated from six-month highs amid robust demand at an auction for Treasury debt, easing fears that the government would have to pay higher interest rates to attract buyers.

According to Department of Commerce, orders for durable goods unexpectedly rose 1.9% in April. Economists on average had projected a rise of 0.5%.

A release by Department of Labor on Thursday showed number of Americans filing first- time claims for unemployment benefits decreased by 13,000 to 6623,000 in the week ending May 23. Economists expected the initial claim to fall to 628,000. The four-week average of seasonally adjusted initial jobless claims, a less volatile gauge, declined by 3,000 to 626,750. Continuing claims for the week ending May 16 jumped 110,000 to a record 6.79 million.

The Commerce Department said on Thursday that new home sales rose 0.3% to a 352,000 annual pace, from a downwardly revised 351,000 in March. Economists had projected sales at a 360,000 rate in April.

Shares of financials rallied. J.P Morgan (NYSE: JPM) jumped $1.99 or 5.74% to $36.65. Bank of America (NYSE: BAC) climbed 39 cents or 3.57% to $11.30.American Express (NYSE: AXP) surged 80 cents or 3.40% to $24.30. Wells Fargo & Co.(NYSE: WFC) gained 69 cents or 2.87% to $24.77.

Energy stocks finished up. Exxon Mobil (NYSE: XOM) increased 93 cents or 1.36% to $69.23. Chevron Corp. (NYSE: CVX) rose $1.24 or 1.92% to $65.81.

Early on Thursday, Costco Wholesale Corp. (NASDAQ: COST) said that its fiscal third-quarter profit fell 29% to$209.6 million, or 48 cents a share, from $295.1 million, or 67 cents a share, in the prior year quarter. Revenue declined 5% to $15.81 billion from $16.61 billion. Costco fell 86 cents or 1.76% to $47.97.

Time Warner Inc. (NYSE: TWX) on Thursday said that it would separate its AOL unit into a standalone company. However, before that separation can take place, Time Warner will buy the 5% of AOL owned by Google (NASDAQ: GOOG). Time Warner currently owns 95% of AOL. Shares of Time Warner rose 55 cents or 2.39% to $23.55.

General Motors (NYSE: GM) fell 3 cents or 2.61% to $1.12. The troubled automaker reached a deal with some major bondholders that would give them a larger stake in a reorganized company and could pave the way for a fast-track bankruptcy backed by the U.S. Treasury in coming days.

Meanwhile, Two US auto parts supplier Visteon Corp. and Metaldyne filed for Chapter 11 bankruptcy protection on Thursday amid slumping auto sales.

European stocks settled with losses. The UK FTSE fell 28.69 points or 0.65% to 4,416.23. The German DAX and French CAC advanced 0.30% and 0.76% respectvely.

Asian stocks finished with gains. The Nikkei 225 rose 12.62 points or 0.13% to 9,451.39.

NYMEX crude oil for July delivery climbed 98 cents or 1.6% to $63.43 a barrel.

Disclosure: Author does not own any of the stocks discussed here.

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