Tuesday, December 20, 2011

STOCKS EXPLODE HIGHER AFTER MOUNTAIN OF GOOD NEWS: Here's What You Need To Know, December 20, 2011

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Tuesday, December 20, 2011

STOCKS EXPLODE HIGHER AFTER MOUNTAIN OF GOOD NEWS: Here's What You Need To Know

Sam Ro | Dec. 20, 2011, 4:00 PM | 1,088 | 3

Good news out of Europe and the U.S. had investors feeling pretty good ahead of the holidays.

First, the scoreboard:

Dow: 12,103.6, +337.3, +2.9%
S&P 500: 1,241.3, +36.0, +3.0%
NASDAQ: 2,603.7, +80.6, +3.2%

And now, the top stories:

The good news kicked off in Europe. German business confidence, as measured by the Ifo institute, unexpectedly increased to 107.2 from 106.6 a month ago. Welcome news for Europe's biggest economy. Also, the Spanish government had a pretty good debt auction. See Also: Everything You Need To Know About Tomorrow's Big ECB Operation That Everyone's Watching >
We also got some good news from the all-important housing sector before the bell. November housing starts jumped 9.3% month-over-month to 685k, crushing the expectation of 635k. The figure is at a 19-month high. Homebuilder stocks surged on the news led by 10% gains in PulteGroup and KB Home. DR Horton, Lennar, and Toll Brothers each posted gains of around 6%.
Crude oil prices jumped more than 3% today. Oil services stocks also jumped on the news.
Jefferies Group shares surged 23% on a better-than-expected quarterly earnings announcement. The investment bank had been battling unfavorable speculation regarding its financial strength and exposure to Europe. "The truth has defeated misinformation," celebrated CFO Peregrine Broadbent. Investment banks Morgan Stanley and Goldman Sachs also jumped, likely benefiting from news of strong fixed-income trading results.
Last night, AT&T pulled the plug on its announced takeover of T-Mobile. This will cost AT&T $4 billion in cash and spectrum. Sprint shares surged 9% on the news as the telecom company doesn't have to worry about competing against an AT&T-T-Mobile behemoth. Meanwhile, Bloomberg reports that Verizon is being investigated over its spectrum deals with cable companies.
Shares of enterprise software giant Red Hat fell 9% today, despite better-than-expected quarterly revenue and earnings. Revenue guidance was just shy of expectations. Management blamed unfavorable foreign exchange. But given the sharp sell-off in the stock, it seems investors expected more. Red Hat was included on JP Morgan's list of four stocks to avoid in 2012.
Oracle announces earnings after the bell. Follow that release at Business Insider: SAI >
In U.S. politics, the House of Representatives voted down a Senate bill to extend the payroll tax cut by two months. As is, the payroll tax cut would expire December 31, which would put a crimp on the consumer and have potential unfavorable ripple effects to our anemic economy.
Don't Miss: MORGAN STANLEY: These Are Our Favorite Stocks Between Now And 2015 >