It was a 2nd week rise for U.S. stocks, benchmark indexes sent to 32-months highs. Takeovers, retail sales spring back and the quitting of Egypt President Hosni Mubarak increased hopes of investors.
Advancing by 6.7% to $46.75 was American Express leading the Dow Jones Industrial Average gains. Second was Walt Disney Co. advancing 6.6% to $43.41 posting a quarterly profit of 54% that exceeded estimates. The theme park’s sales rose to $10.7 billion (10%).
The S&P 500 Index consumer companies that are dependent on consumer spending gained 3.5%. NYSE Euronext rose 17% after its announcement that it is to be acquired by Deutsche Boerse AG.
At a 1.4% increase, the S&P 500 rose to 1,329.15, the Dow to 12,273.26 earning 181.11 points (1.5%). This year’s S&P 500 gain at 5.7% has exceeded forecast. The Federal Reserve’s plan of $600 billion in Treasuries procurement is continued. Data has it that 2,707 takeovers have been announced globally this year reaching $226.2 billion, higher by 21% from 2010’s same period at $186.9 billion.
Fed Chairman Ben S. Bernanke reported a stronger economic healing though unemployment may still be high for a while, proof of which is awaited by central bank as it proceeds with its plan of quantitative easing.
Unemployment benefits claims dipped its lowest from July 2008, first-time claims dropping by 36,000 to 383,000.
Protesters won as Mubarak handed power over to the military after his 3-decade rule causing stocks to erase their losses. Egyptian shares holder, the Market Vectors Egypt Index ETF rallied after its 4.2% weekly gain was posted. Strategist Kevin Caron said the noise of Egypt has not disrupted global trade production, the U.S. economy or credit markets to unseat what’s been a fairly decent market for risk assets.
The week ending Feb. 5, U.S. retail sales went 2.2% up after 4 dips according to the ICSC-Goldman Sachs Weekly Chain Store Sales Index. From January’s 74.2, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment for the month went 75.1 up. Retail sales were up at 3.4%, the 5th highest gain in the S&P 500 divided by 24 groups.
Of the 348 S&P companies, 73% showed results since Jan. 10 that were higher than estimates. U.S. small firms’ confidence rose to its highest in 3 years with positive sales and profits view.
McDonald’s Corp. hiked to $76.14 (2.8%). Its 5.3% rise against competitors topped a 4.5% estimate as European sales increased their highest in a year.
Whole Foods Market Inc. was up to $59.67 (13%), its forecast boosted by consumers willing to spend on healthy food. Its 2011 earnings is seen at $1.80/share from previous $1.71.
The announced talk of Deutsche Boerse acquiring NYSE Euronext in an all-stock deal to produce the biggest exchange operator hastened takeovers starting with London Stock Exchange Group Plc’s acquisition of TMX Group Inc. NYSE Euronext shares rose to $38.31 (17%).
Big Lots Inc. increased to $41.57 (22%), the 2nd highest in the S&P 500. The company works with Goldman Sachs for a likely sale after it was notified of interest by Thomas H. Lee Partners LP and Bain Capital LLC.
In the stock index, the highest gainer at 24% to $28.16 was JDS Uniphase Corp. its share-price forecast rose from $25 to $30.
The highest fall for a week since November was Cisco Systems Inc. at 15% to $18.70. In the period ending January 29, its gross margin slid to 62.4% missing the 63.3% average estimate. Not including some items, Cisco profit estimate is 35 to 38 cents per share in this quarter against analyst estimate of 40 cents.