Stock Market News for June 28, 2010

Banking stocks rallied Friday as the Congress reached an agreement on the contentious financial reform regulation, but the gains were not enough to push the broader markets higher.  A downwardly revised first-quarter economic growth added to investors’ jitters and capped a week that saw China announcing that it would let yuan float more freely.

The passage of the bill alleviated concerns that banks’ profits would be impacted in a major way.  Shares in American Express (NYSE:AXP) jumped 3.9%, while J.P. Morgan (NYSE:JPM) added 3.7% and Bank of America (NYSE:BAC) rose 2.7%.  Goldman Sachs (NYSE:GS) rose 3.5% to $139.66 and Citigroup Inc. (NYSE:C) rose 4.2% to $3.94

China’s announcement last week that it would let yuan appreciate was seen as a vote of confidence in the global economic recovery.  Majority of the firms exporting to China saw an immediate strength to their bottom lines, but as the week progressed fears that European recovery would stumble had that early enthusiasm fading.  Wednesday’s FOMC policy report was circumspect about the pace of the economic recovery, noting the impact of European developments on financial conditions.  Over the weekend, G-20 leaders cautioned the fiscal efforts to curtail nations' deficit-spending and debt levels could hurt the economic recovery.

Gold prices rose $10 to close at $1,256.20 an ounce.  Meanwhile, rising costs of the oil spill, with some reports suggesting BP (NYSE:BP) incurring $100 million daily, shaved another 6% of BP shares. 
The Dow industrials fell 9 points, or 0.1%, Friday for a 2.9% weekly drop.  Twenty-five of the thirty Dow components closed lower on the week.  The tech-heavy Nasdaq edged up 0.3% but dropped 3.7% on the week.  The widely followed S&P 500 index added 0.3% Friday but was down 3.7% on the week.  Waning risk sentiments sent demand for safe-havens higher, with the yield on the 10-year note dropping to 3.11%.  The annual rebalancing of the Russell indexes sent volume soaring on the NYSE where 2.56 billion shares exchanged hands on Friday.

Today’s stock futures suggest stocks would open with modest gains.  Ahead of the opening bell, Dow Jones industrial average futures fell 10 points, or 0.1%, to 10,094.  Standard & Poor's 500 index futures fell less than a point to 1,074.30, while Nasdaq 100 index futures rose 4.50, or 0.2%, to 1,843.75.

Today’s Fed-speak calendar includes speeches from Kevin Warsh today, and Charles Evans, Elizabeth Duke and Dennis Lockhart on Wednesday.

Read the full analyst report on AXP

Read the full analyst report on JPM

Read the full analyst report on BAC

Read the full analyst report on GS

Read the full analyst report on C