Market Wrap for Thursday, July 11: Market Jumps on Dovish Bernanke Comments
The stock market soared on Thursday after Fed Chairman Ben Bernanke said on Wednesday that monetary policy would remain accomodative for "the foreseeable future."
This helped to stem concerns that the central bank was on the verge of turning more hawkish on the monetary policy front. The market rally was led by the Nasdaq, but all three of the major averages rose better than 1 percent on the session.
Treasury prices also climbed on the day while the U.S. Dollar plunged in the wake of Bernanke's comments.
The Dow Jones Industrial Average rose 169 points, or 1.11 percent, to close at 15,461.
The S&P 500 jumped better than 22 points, or 1.36 percent, to 1,675.
The Nasdaq surged almost 58 points, or 1.63 percent, to close at 3,578.
Initial jobless claims rose from 344,000 for the week ending June 29 to 360,000 for the week ending July 6. This compared to consensus expectations calling for a rise to 345,000.
Continuing jobless claims climbed to 2.977 million for the week ending July 29 from 2.953 million for the week ending July 22. This compared to consensus expectations that expected continuing claims to rise to 2.949 million.
Energy prices fell on Thursday despite a sharp rally for stocks. NYMEX crude futures were last trading down 1.68 percent to $104.73. Brent crude contracts lost 0.88 percent to $107.56. Natural gas fell almost 2 percent on the day and was last trading at $3.62.
Precious metals jumped sharply on Thursday. COMEX gold futures were last up a little less than 3 percent to $1,283.50 while silver climbed nearly 4.50 percent to $20.02. Copper futures added 2.72 percent on the session to $3.1750.
In the grains complex, both corn and wheat rose. At last check, corn futures were up around 1 percent while wheat added 0.59 percent. Movers in soft commodities included cocoa and cotton. Cocoa futures climbed almost 3 percent on the day while cotton was last down 2.36 percent.
Bond prices also rose sharply on Thursday. Near the close of equities, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) was up 1.12 percent to $107.66. Yields fell as prices rose on the session.
Yields were as follows on Thursday afternoon: The 2-Year Note yield was last at 1.40 percent while the yield on the 5-Year Note was sitting at 1.40 percent. The 10-Year Note was yielding 2.58 percent and the 30-Year Bond yield was last at 3.63 percent.
The U.S. Dollar plummeted on the session, helping to spur the rally in risk assets. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, fell 1.67 percent to $22.40.
The closely watched EUR/USD pair was last trading up 1.67 percent to $1.3097. Other movers included the USD/JPY, which fell 1.15 percent and the GBP/USD, which surged 1.80 percent. The USD/CAD fell 1.25 percent on Thursday.
Volatility and Volume
The VIX continued its descent on Thursday, although the loss was small. At last check, the widely watched barometer of volatility expectations was down a little less than 2 percent to 13.94.
Volume was lighter than usual despite the market rally. Around 111 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 144 million.
Positive top-line data from a Phase I study and a price target boost at JMP Securities sent shares of Alnylam Pharmaceuticals (NASDAQ: ALNY) up around 17 percent near the close of trading on Thursday.
Celgene (NASDAQ: CELG) had added almost 8 percent near the close after the company said its flagship blood-cancer drug Revlimid helped extend the time that newly diagnosed multiple myeloma patients survived without their tumors growing in a late-stage study.
Advanced Micro Devices (NYSE: AMD) jumped almost 12 percent after analysts at Bank of America-Merrill Lynch upgraded the stock from Underperform to Buy, citing next generation gaming consoles as a catalyst.
Eldorado Gold (NYSE: EGO) rose almost 11 percent on Thursday amid the rally in gold prices.
Small-cap biotech firm Rockwell Medical (NASDAQ: RMTI) had added better than 15 percent late in the day after reporting positive results from a late-stage study of its investigational drug for the treatment of iron deficiency in chronic kidney disease patients receiving hemodialysis.
Homebuilders rose on the session on signs that the Federal Reserve intends to keep its easy-money policies in place for the time being. Among the leaders were Lennar (NYSE: LEN), which added more than 8 percent and D.R. Horton (NYSE: DHI), which added almost 9 percent.
Shares of Ascent Capital (NASDAQ: ASCMA) had lost around 7 percent late in the day after the company announced it was buying Security Networks for $507.5 million.
Restoration Hardware (NYSE: RH) fell around 5 percent after the company announced that selling stockholders are offering 12 million shares.
Merrimack Pharmaceuticals (NASDAQ: MACK) fell 28 percent on the session after the company announced that it plans to offer $50 million in stock and $75 million in convertible senior notes.
Texas Industries (NYSE: TXI) lost around 3 percent after the company reported its fiscal first-quarter earnings results.
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