After falling into the red in the morning over continued fiscal cliff worries, US stocks turned green by midday thanks to a financial stock rally.
The Dow Jones Industrial Average
(INDEXDJX:.DJI) was up 0.83% to 13,059.68 points as of 12:16 p.m. EST.
(NYSE:HPQ) continued its bullish run. After having gained close to 10% in the last week, shares of the PC giant jumped 4.29%. The stock, which has had a topsy-turvy run since the reveal of its $8.8 billion writedown on its Autonomy acquisition, could likely have received a confidence boost after Goldman Sachs upgraded PC rival Dell
(NASDAQ:DELL) on Monday.
Bank of America
(NYSE:BAC) also advanced 3.84% to $10.28, crossing the landmark $10-per-share level. Investors likely viewed fellow big bank Citigroup’s
(NYSE:C) cost-cutting announcement of 11,000 job cuts as a good move and hoped that Bank of America could follow suit to become more operationally efficient.
(NYSE:TRV) also increased 4.38% to $73.62 after offering its estimates of losses from Superstorm Sandy. Travelers forecasts losses of $1.135 billion from Sandy, though the figure would likely be reduced to about $650 million after accounting for reinsurance policy reimbursements and taxes. The insurance giant also said it would restart stock buybacks.
Among leading laggards was Intel
(NASDAQ:INTC), which slid 0.45% to $19.88 after the company was downgraded to Underperform from Market Perform by Raymond James’ Hans Mosesmann on gross margin worries as rivals ARM Holdings
(NASDAQ:ARMH) and Advanced Micro Devices
(NYSE:AMD) gained ground.
“We believe mid 50% (and potentially low 50% over time) gross margins [compared with the 62-%-65% gross margins over the past three years] are an increasing reality as opposed to a downside scenario, and investors should brace for lower estimates,” said Mosesmann in a note. Earlier in the day, Intel also announced a $6 billion senior notes offering.
one of the other two Dow stocks in the red at midday, dropped 0.04% to $74.02 on news that the FAA ordered inspections of Boeing’s new 787 Dreamliners after the agency received reports of fuel leaks, which were linked to
"improperly assembled" fuel couplings on in-service and production airplanes.
No positions in stocks mentioned.
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