Back to top

Stock Market News for June 17, 2010

Read MoreHide Full Article

BP’s announcement that it will suspend dividend payment and sell assets to create a $20 billion fund to pay for the Gulf oil spill claims helped stocks pare deeper losses and close mixed, but sentiments remained jittery as bellwether FedEx came out with a disappointing outlook.

Stocks began the day on a down note after a government report showed home construction and application for building permits slumped in May.  However, BP’s (NYSE:BP) announcement that it will cancel dividend payment for the rest of the year and sell assets worth $10 billion helped lift some uncertainty about the energy giant’s future. For most of the session, stocks traded in a narrow range and volume remained thin.   

The Dow Jones industrial average advanced 4.69 points, or 0.05%, to 10,409.46.  The S&P 500 fell less than a point to 1,114.61, but managed to close above its 200-day moving average for the second straight session.  The Nasdaq Composite index ended the session virtually unchanged.  On the New York Stock Exchange three stocks rose for every two that fell in price.

FedEx (NYSE:FDX) shares dropped 6% to $78.07 after the shipping company said it sees fiscal 2011 earnings to be “constrained” due to higher costs, noting it sees a moderate recovery in the global economy.  A week forecast from mobile phone maker Nokia (NYSE:NOK) sent its shares down more than10%.

Meanwhile, after a meeting with President Obama, BP’s Chairman Carl-Henric Svanberg apologised for the April 20 spill that has since wiped off almost half of the British energy company's market capitalization. BP’s shares, down more than 4% in morning trade, closed with a gain of 1.4% at $31.85.         

Bond prices rose, sending corresponding yields lower. The yield on the benchmark 10-year Treasury note dropped to 3.27% from 3.31% late Tuesday. 

A Spanish newspaper report that said the International Monetary Fund and the European Union were working on modalities for a financial package for Spain weighed on the euro.  Spain denied the media report.  Still the country faces next month's need to raise about $30.75 billion to cover bond and bill redemptions.   

Today's futures suggest some strengthening as risk sentiment rallies on the euro strength, bolstered by the better-than-expected Spanish auction of 10 and 30-year government bonds.  Nevertheless, traders keep their eyes set on expanding government regulatory oversight and burgeoning corporate health care costs.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


BP p.l.c. (BP) - free report >>

FedEx Corporation (FDX) - free report >>

Nokia Corporation (NOK) - free report >>

More from Zacks Market News

You May Like