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Market Recap: Santa's Christmas Rally

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Investors got a Christmas rally in today's shortened trading session. Markets end higher.

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Stocks rallied on Christmas Eve. The Dow Industrials gained +94 points, or +0.71% to 13545, the S&P 500 gained +14 points, or +0.68% to 2126, and the Nasdaq Composite added +14 points, or +0.71% to 2126.

Merrill Lynch (MER) topped headlines in today's shortened trading session. The investment bank began this morning saying it would sell its commercial finance business to General Electric (GE) for an undisclosed price as part of a plan to free up capital.

I believe that today's announced sale of Merrill Lynch Capital to General Electric is an important milestone in the continuing credit bubble unwind. It represents the first major sale of "good" assets by a struggling financial institution…What this transaction with GE shows… is that raising additional capital through the Middle East and Asia will not be enough. More asset sales, not just by Merrill Lynch but by others as well, will be required," said Minyan Peter.

Shortly after the bank announced that it would receive $6.2 bln from Singapore's Temasek Holdings and Davis Selected Advisors. Yet shares took a tumble when it was announced that the investment was for $48 per share. Further, Toddo noted on the Buzz "Fitch – or his mom, I'm not sure, just came out to say that it's 'highly probable' that Merrill will recognize additional losses in the fourth quarter." MER finally closed -2.95%. The broader Philadelphia Bank Index, however, added +1.26%. Lehman Brothers (LEH) added +1.67%, Morgan Stanley (MS) added +1.10%, and Goldman Sachs (GS) added +2.25%. Bear Stearns (BSC) continued to lag falling -1.28%. For more read Professor Depew's Five Things You Need To Know.

Retail stocks gained after a report in the WSJ said the nations retailers were hoping for a final push in today's trading session. The report cited a survey by America's Research Group which showed 71% of 800 surveyed had completed Christmas shopping where typically 85% would have been done at this time. Wal-Mart (WMT) added +1.10%, Gap (GPS) added +0.51%, and J.Crew (JCG) added +1.37%.

Target (TGT) shares surged +3.5% after Investor William Ackman raised his stake in the company to 10%, Ackman's company Pershing Square Capital disclosed in a filing.

FedEx (FDX) fell after the IRS said the company owed $319 ml in back taxes and fines due to employees erroneously classified as independent contractors. FDX fell -2.29%.

Commodities traded higher today. Crude oil added +0.32 to 93.64. Gold added +1.00 to 812.60. Silver added +0.15 to 14.34,and copper gained +5.15 to 314.50.

Click on Minyanville's Buzz Bits for more summaries.


Idea Flow

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: DHI, MON, MOS, TNH, MTW

Some bearish trade or investment ideas: CME, MER, GM, F, DJ, DD, CAT, NVLS, RIMM, AMZN

Have a Merry Christmas! We'll see you back here on Wednesday.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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