Stock Market News for June 9, 2010

It seems nauseating churns have become a trend.  A volatile last-hour trading Tuesday sent stocks higher, helping markets end a two day-slump as Federal Reserve Chairman Ben Bernanke noted the economy’s return to recession was unlikely.

In the final minutes of trading, the Dow industrials jumped 107 points, for a 124 points gain on the day, which helped it erase the previous session’s 115-point drop.  The Nasdaq, however, slipped in the red due to weakness in technology issues.  The index fell 3.33 points, or 0.2%, to 2,170.57.  The broader S&P 500 index gained 1.1% to 1062.  On the New York Stock Exchange, advancing shares beat those that fell in price by a three-to-two margin on volume of 1.6 billion shares.

Gold extended its gain and touched a record high of $1245 per troy ounce on expectations central banks around the world would be looking to the safety of the yellow metal in these times of economic uncertainty.  Treasury prices rose, sending corresponding yields lower.  The yield on the benchmark 10-year note dropped to 3.17% from 3.18% late Monday.  The US dollar, meanwhile, dropped against a basket of currencies for the first time in the past four sessions, off 0.4% to 88.14.

Optimism ahead of an upcoming multi-billion dollar Agriculture Bank of China IPO, and reports that Chinese exports, due out tomorrow, rose a greater-than-expected 50% in May from a year earlier sent the Shanghai Composite Index up 2.8%.  The Nikkei, however, dropped to its lowest close of the year.  Back home, expectations are building that the economy is showing signs of revival, sending this morning’s stock futures modestly higher.  Ahead of the opening bell, Dow Jones industrial average futures are up 57 points, or 0.6%, to 9,971.  Standard & Poor's 500 index futures rose 7.50 points, or 0.7%, to 1,066.70.  Nasdaq 100 index futures rose 12.25 points, or 0.7%, to 1,803.75.

Gains were broad based yesterday, with only four DJIA components closing the day in the red.  Leading the index higher was DuPont (NYSE:DD - Analyst Report), which rose 4.1%, after it said the Agriculture Department has approved its new soybean biotechnology product for US cultivation.  Higher crude prices and an analyst upgrade sent shares in ExxonMobil (NYSE:XOM - Analyst Report) up 3.3%.  McDonalds (NYSE:MCD - Analyst Report) reported a better-than-expected 4.8% jump in May same-store sales, sending its shares up 2.4%; however, McDonalds warned foreign exchange rates, especially a weakening euro, will hurt its full-year earnings.

Banking analyst Dick Bove’s cautious comments on JP Morgan (NYSEJPM) were brushed aside, as JP Morgan (NYSE:JPM - Analyst Report) rose 2.9% and Bank of America (NYSE:BAC - Analyst Report) advanced 3.4%.  Bove noted JP Morgan "faces challenges in its business model almost everywhere."

However, shares of technology and oil drilling companies failed to advance with the broader market.  Brokerage downgrades on a number of technology firms also weighed on stocks from the sector.  Intel (NASDAQ:INTC - Analyst Report) fell 0.6% after Susquehanna Financial Group cut the stock to “neutral” from "buy."  Citing a strengthening greenback, analysts at Bank of America/Merrill cut their earnings estimate on eBay (NASDAQ:EBAY - Analyst Report), Amazon (NADSDAQ:AMZN - Analyst Report) and Google (NASDAQ:GOOG - Analyst Report), sending the shares in the company off 0.7%, 2.6% and 0.2%, respectively.  Microsoft (NASDAQ:MSFT - Analyst Report) shares closed down 0.7%.  The company announced plans for a private offering of senior notes to help repay short-term debt.

Shares in oil drilling companies fell on worries the moratorium on deepwater drilling in the wake of the Gulf oil spill could be extended beyond six months.  Shares in Transocean Corp. (NYSE:RIG - Analyst Report) dropped $2.84, or 5.8%, to $46.33.  BP (NYSE:BP - Analyst Report) dropped 5.7% to $34.68.  Diamond Offshore (NYSE:DO - Analyst Report), which had its rating lowered, fell 3.8% to $56.94.

Fed Chairman Bernanke testifies on the economy's state at 10:00 AM ET, and talks about employment issues as markets close this afternoon.

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