CLOSING BELL

Dow 10442.41  -8.23, Nasdaq 2289.09  -20.71, S&P 1113.20  -4.31 

The markets started the day off strong on news that China would let the yuan fluctuate.  But the gains didn’t last and the market ended the day lower.

In the morning raw materials and natural resource stocks saw strong support with the idea that a stronger yuan would fuel China’s demand for materials.  Materials stocks were up +2% in trading today but lost their momentum and ended the day with a +0.4% gain.

Retailers saw some of the worst selling pressure. As a group, retailers fell -1.7%, which hurt the consumer discretionary sector so that it fell -0.9%, which was the worst loss of any major sector.

August gold had been up to a new record high of $1266.50 per ounce overnight after it was learned that Saudi Arabia’s central bank was hold almost twice the amount of gold previously thought.  But gold fell back closing at a +1.9% to $1240.70 per ounce.

Advancing Sectors: Materials +0.4%, Industrials +0.3%
Declining Sectors: Consumer Discretionary -0.9%, Tech -0.8%, Utilities -0.8%, Health Care -0.4%, Consumer Staples -0.3%, Financials -0.3%, Energy -0.2%, Telecom -0.1%

MIDDAY LUNCH

Dow 10509.44  +58.80, Nasdaq 2310.61  +0.81, S&P 1122.11  +4.60 

Stocks are well of the session highs but are still trading to the plus side.

Large cap tech stocks have come under pressure causing the Nasdaq to give up almost all of its gains.  Google (GOOG) 493.43 -6.60, -1.32%, Microsoft (MSFT) 26.26 -0.18, -0.68%, Apple (APPL) 275.56 +1.60, +0.58%.

Materials stocks continue to outperform today of the 32 companies in the sector only 3 are showing a slight decline.  3M (MMM) 82.20 +1.02, +1.26% and United State Steel (X) 45.88 +2.47, +5.69% are showing nice gains today.

Gold is down -15.60 to $1242.70 per ounce, while oil is fractionally higher trading at $77.48 per barrel.

MORNING COFFEE

China To Let Yuan Rise. Ahead of this week's G-20 summit, China said it would allow the Yuan to rise following an improvement in the economy. China didn't set a timeline for the change, and ruled out a one-off revaluation, saying there is no basis for “large-scale appreciation." Asian stocks climbed the most in seven months on speculation that a more flexible yuan will help China’s growth, while the yuan rose the most in five years.

Gold Higher On Saudi Arabia News. Saudi Arabia's central bank announced that it is holding nearly twice as much gold as previously thought.  The news sent gold prices to a fresh high of almost $1,265 per ounce. Saudi Arabia's is holding to 322.9 million tons compared to the 143 million tons reported in March.

Durable Orders Show Strong Increase. The Federal Reserve reported that manufacturing production increased by +0.8% in May, driven by a +1.7% rise in durable goods production.  Wall Street had estimated that durable orders would show a -1.3% decrease. The gains in durable goods production were widespread, with 9 of the 11 industries increasing last month.

·         Futures: Dow +1.3%. S&P +1.5%. Nasdaq +1.5%. Crude +1.75% to $78.53. Gold +0.1% to $1259.50.

·         Asia: Japan +2.4% to 10238. Hong Kong +3.1% to 20912. China +2.9% to 2586. India +1.7% to 17877.

·         Europe: London +1.1%. Paris +1.6%. Frankfurt +1.5%.

CLOSING BELL

Dow 10450.87  +16.70, Nasdaq 2309.80  +2.64, S&P 1117.52  +1.48 

Stocks traded in a small range today with little news to move the markets in either direction.

Energy stocks were leaders most of the day.  BP (BP) 31.76, +0.05, +0.16% didn’t move much today after Congressional testimony and a downgrade by Moody’s (MCO) rating service.  Yesterday, Standard & Poor’s downgraded the company and it was highly anticipated that S&P would follow suit.

Other energy companies trading higher include: ExxonMobil (XOM) 63.10, +0.50%, +0.80%, ConocoPhillips (COP)56.01, +0.83, +1.50%,  Transocean (RIG) 54.61, +5.18, +10.48%, and Halliburton (HAL) 26.98, +0.59, 2.24%.

Shares of CVS (CVS) 32.43 +0.59, +1.85% and Walgreen (WAG) 30.09, +0.82, +1.85% were among the biggest gainers after the two companies announced a new PBM pharmacy agreement. 

Earlier in the morning gold hit an all-time high near $1264 per ounce before pulling back to $1258.30 up +9.60. Materials stocks gave back early gains, but were still able to close in positive territory. SPDR Gold Fund (GLD) 122.83 +0.93, +0.76% continues to climb on higher gold prices. 

MIDDAY LUNCH

Dow 10450.11  +15.94, Nasdaq 2311.91  +4.75, S&P 1117.41  +1.37 

Stocks are trading higher after a choppy opening but continue to trade higher with the help of the energy sector.

Energy stocks are still trading near their day highs up +0.7%.  The gains are coming from a rise in oil prices which are up +0.5% to $77.20 per barrel.

BP (BP) 31.77, +0.06 was downgraded today by Moody’s rating agency, but the stock has had little reaction since yesterday Standard & Poor’s downgraded the company.  It was highly anticipated that S&P would follow suit.

Other energy companies trading higher include: ExxonMobil (XOM) 63.18, +0.58%, +0.93%, ConocoPhillips (COP)55.81, +0.63, +1.12%,  Transocean (RIG) 53.46, +4.03, +8.15%, and Halliburton (HAL) 26.87, +0.47, 1.78%.

Gold is continuing to climb higher up +10.50 to 1259.20 per ounce.

MORNING COFFEE

Lockheed Ready For Military Cutbacks. Lockheed Martin’s (LMT) CEO Bob Stevens said the defense industry faced with "a new reality," as the Defense Department moves to cut costs. Lockheed is cutting in half its participation in an important biennial trade fair.  The company is also preparing for increased scrutiny of its F-35 Joint Strike Fighter program and is preparing to cut the price of the new planes by at least 20%.

Oh,Oh SpaghettiO’s. Campbell (CPB) announced they are recalling SpaghettiOs with meatballs due to possible undercooking. The company said "there is no information indicating that any under-processed product has reached consumers," and that the recall was undertaken out of "an abundance of caution."

Downgrades

L-3 Comms (LLL):  Argus lowered their rating from Buy to Sell.

·         Futures: Dow -0.2%. S&P -0.2%. Nasdaq -0.1%. Crude -1.45% to $75.68. Gold -0.2% to $1246.30.

·         Asia: Japan 0.0% at 9995. Hong Kong +0.7% to 20287. China -1.8% to 2513. India -0.3% to 17571.

·         Europe: London 0.0%. Paris -0.3%. Frankfurt -0.2%.

MIDDAY LUNCH

Dow 10361.16  -48.37, Nasdaq 2298.15  -7.84, S&P 1109.92  -4.72 

The markets continue to trade lower but are up from the day’s lows. 

BP’s (BP) 31.68, -0.17, -0.53% CEO Tony Hayward is currently fielding questions from a Congressional panel regarding the Gulf oil spill.   Additionally, CNBC reported that BP is considering a corporate debt offering to raise $5 billion to $10 billion as early as next week.

Apple (AAPL) 271.22 +3.97, +1.49% shares are bucking the trend again today on news of very strong iPhone 4 sales.

Economic data released today disappointed the market for the most part.  Initial jobless claims for the week of June 12^th spiked to 472,000 well above the 450,000 that economist had estimated. The Philadelphia Fed Index for June also missed estimates. The index came in at 8.0, well below the 20.0 that was widely anticipated and down from the 21.4 that had been recorded for the prior month.

MORNING COFFEE

BP Cuts Dividend. After yesterdays White House meeting, BP (BP) announced it will suspend its dividend for the rest of the year.  The company also agreed to a $20 billion fund to cover costs related to the Gulf spill, as well as a 10% cut in 2010 capital spending and a $10 billion asset sales program to help fund the account. Today BP’s CEO Tony Hayward will testify before Congress about the spill. 

Initial Jobless Claims Spike. Initial jobless claims for the week of June 12^th spiked to 472,000 well above the 450,000 that economist had estimated.  The number of people continuing to claim benefits rose by 88,000 to 4.57 million, which doesn't include the 5.2 million people who receive extended benefits paid for by the federal government. A total of 9.7 million people received unemployment insurance in the week ending May 29.

Aetna Says They Will Beat Estimates. Aetna (AET) announced they expect to beat their 2^nd quarter estimates.  Wall Street analysts had expected the company to report earnings of $0.68 per share.  The company is scheduled to report their results on July 27^th before the market opens.

Upgrades

Spectra Energy (SE): Jefferies upgraded their rating from Underperform to Hold and raised their target price from $18.00 to $20.00.

EMC (EMC): Argus raised their rating from Hold to Buy and placed a target price of $25.00 on the company.

Coverage Initiated

General Dynamics (GD): HSBC Securities initiated coverage with an Overweight rating and target price of $75.00.

Lockheed Martin (LMT): HSBC Securities initiated coverage with a Neutral rating and target price of $85.00.

Coverage Reiterated/Price Target Changed 

Apple (AAPL): Kaufman Bros reiterated their Buy rating and raised their target price from $320.00 to $340.00.

Sunoco (SUN): Caris & Company reiterated their Average rating and raised their target price from $28.00 to $37.00.

Sunoco (SUN): Howard Weil reiterated their Market Perform rating and raised their target price from $33.00 to $39.00.

·         Futures: Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude -0.3% to $77.44. Gold +0.35% to $1234.80.

·         Asia: Japan -0.7% to 9999.4. Hong Kong +0.4% to 20138. China -0.4% to 2560. India +0.9% to 17617.

·         Europe: London +0.8%. Paris +0.9%. Frankfurt +0.5%.

MORNING COFFEE

Bailout Package For Spain. Rumors are flying about a possible rescue package for Spain, with a Spanish newspaper reporting that the EU, IMF and U.S. Treasury are working on a liquidity plan involving a €250B ($335 billion) credit line. The IMF and the Spanish government both deny that any rescue package is in the offing.

Fannie & Freddie To Be Delisted. The Federal Housing Finance Agency (FHFA) has directed both Fannie Mae (FNM) and Freddie Mac (FRE) to delist from the New York Stock Exchange. The delisting of their common and preferred shares from the NYSE will be effective around July 8, when their stocks will move to the OTC market.

Economic Data Disappoints. Housing starts fell -10% to 593,000 in May, well below economist estimates of 655,000.  Building permits also fell -5.9% to 574,000, missing economists' forecasts. Additionally, the producer price index fell -0.3% last month, compared with forecasts of a -0.5% decline. The core number PPI, which excludes food and energy, rose +0.2%. Economists expected a +0.1% increase in May on the core number.

Coverage Initiated

Caterpillar (CAT): Jefferies initiated coverage with a Buy rating and target price of $75.00.

MGM Mirage (MGM): Brean Murray initiated coverage with a Hold rating.

JP Morgan Chase (JPM): FBR Capital initiated coverage with an Outperform rating and target price of $45.00.

·         Futures: Dow -0.2%. S&P -0.3%. Nasdaq -0.2%. Crude -0.4% to $76.66. Gold +0.2% to $1236.60.

·         Asia: Japan +1.8% to 10067. Hong Kong +0.1% to 20062. China +0.3% to 2570. India +0.3% to 17463.

·         Europe: London +0.3%. Paris +0.2%. Frankfurt +0.3%.