Stock Market News for December 3, 2010

Stocks advanced for a second straight day as better-than-anticipated retail sales and housing data continued to point toward economic strength. European Central Bank’s assertion that it would not abandon its plan to buy government bonds helped contain eurozone worries, helping stocks extend their gains.

Financials led on the upside, after Goldman Sachs (NYSE:GS - Analyst Report) raised its rating on the sector to “overweight,” saying an improving economy is helping U.S. banks’ operations. The upgrade sent Dow components Bank of America (NYSE:BAC - Analyst Report) and JP Morgan (NYSE:JPM - Analyst Report) up 3.5% and 1.16%, respectively.  

The Dow average, after its 250-point surge Wednesday, added another 107 points to its tally, marking its best two-day run since early July. The tech-focused Nasdaq Composite index gained nearly 30 points, or 1.2%, to 2579.35. The widely tacked S&P 500 index 15.46 points, or 1.3%, to 1221.53. On the New York Stock Exchange, more than two stocks rose in price for everyone that advanced. The CBOE Vix, market’s measure of volatility, retreated 9.2% to 19.39.

A disappointing jobs report has sent this morning’s stock futures lower.

Shares in Kroger (NYSE:KR - Analyst Report) plunged 9.4% after the company trimmed its yearly sales and earnings outlook and cut its planned capital expenditure by $100 million. PepsiCo (NYSE:PEP - Analyst Report), which said it plans to acquire Wimm-Bill-Dann Foods (NYSE:WBD) in a $3.8 billion deal, saw its shares dropping 0.7%. Alcoa (NYSE:AA - Analyst Report) gained 3.8% as material shares rallied on strengthening global manufacturing activity.

Retailer Abercrombie & Fitch (NYSE:ANF - Analyst Report), which posted a 22% jump in comparable store sales, saw its shares surging 11.1%. Costco Wholesale Corp. (NASDAQ:COST - Analyst Report), Target Corp. (NYSE:TGT - Analyst Report), and Limited Brands (NYSE:LTD - Analyst Report) all saw their shares rising after reporting estimate-beating sales numbers.  

The demand for safe haven assets such as US Treasurys waned, sending prices lower. The yields rose, with the yield on the benchmark 10-year note jumping to 3.00% from 2.96% late Wednesday. This is the first time since July that the yield touched the 3% mark. Brightening economic prospects sent crude prices up $1.25 to $88, a two-year high. Gold added $1 to end the day at $1,387.30.    

A sharp jump in pending home sales sent shares in home building and home improvement retailing companies higher. Shares in Lowes (NYSE:LOW - Analyst Report) gained nearly 5% to $24.92. Pulte Homes (NYSE:PHM - Analyst Report) added 3.2% to $6.75 and Lennar (NYSE:LEN - Analyst Report) surged 7.2% to $16.88. KB Home (NYSE:KBH - Analyst Report) gained 4.5% and DR Horton (NYSE:DHI - Analyst Report) closed up 3.7%.

All ten S&P500 industry sectors closed the session in the green for a second consecutive day. Financials (+2.4%) topped the sector list of gainers, followed by industrials up 1.6%, basic materials up 1.5%, oil and gas up 1.4%, tech up 1.2%, telecommunications up 1.1%, consumer services up 0.8%, health care up 0.7%, consumer goods up 0.6% and utilities up 0.4%.

Read the full analyst report on GS

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Read the full analyst report on KR

Read the full analyst report on PEP

Read the full analyst report on WBD

Read the full analyst report on ANF

Read the full analyst report on COST

Read the full analyst report on TGT

Read the full analyst report on LTD

Read the full analyst report on LOW

Read the full analyst report on PHM

Read the full analyst report on LEN