U.S. Stocks Edge Higher Amid Improving Consumer Confidence and Economic News

Strategic Insights -

U.S. stocks were boosted by improving consumer confidence and encouraging economic news, despite downbeat results from Sears Holdings and the U.S. housing sector. The Dow Jones Industrial Average and the S&P 500 were moving higher, while the Nasdaq edged up. The improving economic climate was partly driven by a small political breakthrough in Washington D.C. over the payroll tax holiday and encouraging news from the U.S.

Key Takeaways:

  • The Dow Jones Industrial Average was up 6 points, or 0.05%, at 12,300, while the S&P 500 was up 3 points, or 0.3%, at 1269, and the Nasdaq was up 7 points, or 0.3%, at 2626.
  • Sears Holdings plummeted 18.7% to $37.28 at the open, as the company plans to close 100 to 120 stores of its almost 2,200 Kmart and Sears stores.
  • Same-store sales dropped 5.2% in the last quarter, according to Sears Holdings.
  • CEO Lou D'Ambrosio aims to reduce expenses, adjust the asset base, and transform the business model of Sears Holdings.
  • Thin trading volumes are expected as many on Wall Street are likely taking advantage of two back-to-back long weekends.
  • European and Asian markets, including the U.K. and Hong Kong, were still closed on Tuesday, while Germany's DAX was climbing 0.38% and Japan's Nikkei Average settled 0.46% lower.
  • The Bank of Japan said on Monday that economic risks have increased, citing the European debt crisis and the yen's appreciation.
  • U.S. equities gained last week in part driven by holiday exuberance, and investors were comfortable with news from Europe and were able to focus on improving economic news out of the U.S.
  • Amsterdam-based ING gave up plans to sell its Belgium insurance division amid a volatile stock market, and shares were down 1.5% to $7.33.
  • GE Capital will acquire the depository business of MetLife Bank in a deal worth about $7.5 billion, and the deal is part of MetLife's plan to move away from being a bank holding company.

Statistics:

  • Sears Holdings plummeted 18.7% to $37.28 at the open, according to the company's announcement.
  • The company plans to close 100 to 120 stores of its almost 2,200 Kmart and Sears stores, as same-store sales dropped 5.2% in the last quarter.
  • Thin trading volumes are expected as many on Wall Street are likely taking advantage of two back-to-back long weekends, which may result in lower trading volumes.
  • U.S. equities gained last week in part driven by holiday exuberance, with the Dow up 3.6%, the S&P 500 advanced 3.7%, and the Nasdaq gained 2.5%.
  • The dollar index was down 0.09%, while the benchmark 10-year Treasury was wavering with the yield at 2.031%.
  • February oil futures were up 23 cents to $99.91 a barrel, while February gold futures were down $9.50 to $1,596.50 an ounce.

Sources:

  • TheStreet
  • Sears Holdings
  • Dow Jones Industrial Average
  • S&P 500
  • Nasdaq
  • Germany's DAX
  • Japan's Nikkei Average
  • Bank of Japan
  • Amsterdam-based ING
  • GE Capital
  • MetLife Bank
  • General Electric (GE)