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Saturday, February 12, 2011

WALL STREET >>> DJIA Reacts Positively To Newfound Hope In Egypt

Stocks got off to a rocky start this morning, but eventually shook off early losses amid newfound hope for calm in Cairo. Egyptian Vice President Omar Suleiman announced that embattled President Hosni Mubarak has turned over the reins to the country's military, going back on last night's vow to remain in office through the next election, and ending a three-week spree of escalating political protests. In response, President Obama called the resignation a beginning, not an end, for Egypt, and expressed confidence that both the nation's military and citizens will uphold fair and free elections.
On the home front, meanwhile, Uncle Sam unveiled plans to trim its exposure to the mortgage market – including plans to scale down government-backed insurers Fannie Mae and Freddie Mac – fueling a rally among corporate competitors. In addition, news of a smaller-than-expected international trade deficit, as well as a slightly larger-than-anticipated rise in the Reuters/University of Michigan consumer sentiment index, also stoked the bullish flames. Against this backdrop, the major market indexes picked up steam as the session progressed, with all three scoring new multi-year highs by the bell.

The Dow Jones Industrial Average (DJIA – 12,273.26) reversed course just before midday, advancing nearly 44 points, or 0.36%, to finish not far from its fresh two-plus-year peak of 12,285.94. 

All but 11 of the Dow's 30 components ended higher, led by Caterpillar's (CAT) 2.9% climb, while Kraft Foods (KFT) paced the decliners on the heels of an earnings miss, giving up 1.5%. For the week, the blue-chip barometer added 1.5%. What's more, the index has already tacked on more than 3.2% since the start of February, powering higher in nine out of the past 10 sessions.

Meanwhile, the S&P 500 Index (SPX – 1,329.15) also bounced back around midday, adding 7.28 points, or 0.55%, to settle just a hair's breadth south of its own two-plus-year acme of 1,330.79. For the week, the SPX gained 1.4%.

In similar fashion, the Nasdaq Composite (COMP – 2,809.44) advanced 18.99 points, or 0.68%, to end just beneath its new three-year high of 2,810.56. What's more, the tech-rich index finished the week north of the 2,800 level for the first time since November 2007, adding 1.4%.

Mubarak's resignation sent crude futures spiralling to 10 weeks low
Crude futures tumbled to a two-month low today, as Egyptian President Hosni Mubarak's resignation eased concerns about potential supply disruptions in the region. As a result, March-dated crude oil futures finished with a loss of $1.12, or 1.3%, at $85.54 per barrel – the front-month contract's lowest settlement price since Nov. 30. For the week, black gold backpedaled 3.9%.


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