STOCKS EXPLODE HIGHER TO START THE YEAR, BANKS LEAD THE WAY: Here's What You Need To Know

Simone Foxman 

Jan. 3, 2012

Stocks posted a big rally early, and traded tightly afterwards to hold on to major gains. But first, the scoreboard:

Dow: 12,397.4, +179.82, +1.47%

S&P 500: 1,277.1, +19.46, +1.55%
NASDAQ: 2,648.7, +43.57, +1.67%
Here are your top stories:

• The first big data releases of the year—ISM manufacturing and construction spending—smashed expectations when they came out this morning. ISM manufacturing rose more than a point for December to 53.9, beating expectations of 53.4. Construction spending posted an even bigger gain—growing 1.2% versus an expected 0.4%.
• Blackstone Vice Chairman Byron Wien came out with his highly anticipated 10 predictions for 2012 today. Among his forecasts: the price of oil falls below $85 per barrel, U.S. GDP growth exceeds 3%, and EU leaders get their act together to develop a long-lasting plan for the eurozone. 
• The Financial Post reported that Research In Motion's executive board could strip CEOs Mike Lazaridis and Jim Balsille of some of their power. The troubled phone manufacturer also announced a sale that cuts the price of the Blackberry PlayBook by as much as $400.
• Phil Falcone's troubled telecom venture LightSquared Inc. appointed telecom aficionado Mark Montagner as its new CFO. Montagner will be tasked with finding capital sufficient to keep the company afloat despite worries that it could run out of cash by the end of the second quarter.
• Stories about Greece leaving the euro circulated today, however markets didn't seem to care. BBC wrote that the country is threatening to leave the euro if it doesn't get the next round of bailout aid, and the Italian Linkiesta reported that EU leaders will "informally" talk about a Greek exit at the next EU summit.
• Minutes from the December FOMC meeting showed that Bernanke and friends are about to stage a game-changing communications policy. Under the new policy, the Fed will release a long-term interest rate forecast for investors, allowing investors to more accurately gauge monetary policy.
• Iowans will start casting ballots at 8PM CT tonight in the first caucus of the Republican primary. It's likely that at least one candidate could drop out after disappointing results, and political analysts are speculating that Mitt Romney might just pull off a win. 
• Bank stocks made major gains, leading off the rally today. Citigroup, Goldman Sachs, Bank of America, Morgan Stanley, and J.P. Morgan were all up over 5%, most even more than that.

STOCKS EXPLODE HIGHER AFTER LATEST ATTEMPT TO SAVE THE WORLD: Here's What You Need To Know

Sam Ro

Nov. 30, 2011

 4:00 PM

Central banks around the world to the rescue?
First, the scoreboard:
Dow: +490.1 pts, +4.2%
S&P 500: +51.7 pts, +4.3%
NASDAQ: +104.8 pts, +4.2%
And now, the top stories:

• Global coordinated intervention. The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada, and the Swiss National Bank announced they would lower the cost of swapping dollars. Specifically, they are cutting the U.S. dollar liquidity swap rate by 50 basis points. This is an effort to boost liquidity in the European bank funding markets. The announcement, which came before the markets opened, caused futures to roar higher.

• In case that wasn't enough, the Fed also reminded us that it could still do much more: "[W]ere conditions to deteriorate, the Federal Reserve has a range of tools available to provide an effective liquidity backstop for such institutions and is prepared to use these tools as needed to support financial stability and to promote the extension of credit to U.S. households and businesses."

• In other market moving central bank actions, the People's Bank of China cut its reserve ratio requirement for banks by 50 basis points. In other words, the PBOC reduced the amount of money banks have to keep on hand, which should encourage more lending activity. This move is likely to appease those fearing a hard landing for the slowing Chinese economy.

• U.S. financials were among the big winners today. This despite last night's S&P ratings cuts, which included Bank of America (+7.3%), Citigroup (+8.9%), and Morgan Stanley (+11.1%). S&P also cut Wells Fargo (+7.4%) and Goldman Sachs (+7.9%) and slapped negative outlooks on the two banks.

• Metals were also among the major movers today. Gold jumped 2% and copper soared 6%. Mining stocks were big winners today. Rio Tinto and Freeport McMoran jumped 9.2% and 8.6%, respectively.

• The U.S. saw three pieces of good economic data this morning. According to ADP, companies added 206k private payrolls in November, crushing economists estimate of 130k. This is encouraging ahead of Friday's big BLS jobs numbers

• The Chicago PMI came in at 62.6, beating the estimate of 58.5. October pending home sales jumped 10.4%, smashing the estimate of of 2.0%.

• The Fed Beige Book of economic anecdotes was released this afternoon. It showed 11 of 12 Fed districts were showing slow to moderate growth. The only exception was the St. Louis district, which includes parts of Arkansas, Illinois, Missouri, Indiana, Kentucky, Tennessee, and Mississippi.

• There were few losers in the stock markets today. Netflix was the biggest loser in the S&P 500, falling 4.5%.