Investors took a breather in the stock market today after driving the Dow Jones Industrial Average 207.5 points higher on Friday.
Friday saw the Dow's second-biggest gain of 2013, after investors cheered a "Goldilocks" jobs report: not too hot, not too cold. For the week, the Dow added 132.55 points, or 0.88%.
There was plenty of news to sway the stock market today despite its muted open.
The world's largest credit rating agency Standard & Poor's boosted its credit outlook for the United States to "stable" from "negative" and reduced the threat of further downgrades.
Citing receding fiscal risks, S&P said the chance of a ratings downgrade is now "less than one in three."
"It was a quite shocking event for the markets when the U.S. was downgraded to negative, so to have that rating repaired is meaningful," Lawrence Creaturea, a Rochester, NY-based manager at Federated Investors Inc. told Bloomberg News. "Economic data has been improving gradually and S&P's upgrade is a recognition of that."
Overseas news was mixed.
Japan's Topix index surged 5.2%, the most in two years. The yen weakened and equities enjoyed a broad-based rally after the Asian nation's government pension fund said it will sell bonds to buy more stocks. It was the 17th biggest advance since 1950.
All 33 industry groups in the Topix advanced, with car makers and steel producers leading the way. Just 40 shares fell on the 1,709 member gauge, the fewest since October 2008.
China's news wasn't as upbeat.
Industrial production in the country rose a less-than-expected 9.2% in May and export gains slumped to a 10-month low. Moreover, imports fell 0.3% against expectations of a 6% rise. The lackluster data raises concern that second quarter economic growth is losing momentum.
Newsmakers in the Stock Market Today
- Booz Allen Hamilton Holding Corp (NYSE: BAH) shares tumbled more than 4% after former employee Edward Snowden admitted to disclosing classified information obtained while working as a CIA computer specialist contractor for the National Security Agency. Snowden, 29, admitted to providing journalists with secret documents describing the widespread government surveillance program that has occupied headlines of late.
- Tesla Motors (Nasdaq: TSLA) slipped 1.17% after a Barron's article suggested the 150% run-up in the last three months has left shares greatly overvalued.
- McDonald's Corp (NYSE: MCD) gained 1.6% after reported global sales rose 2.4% in May. The fast-food giant cited its new Egg White Delight sandwich and Premium McWraps for the solid growth.
- Green Mountain Coffee Roasters (Nasdaq: GMCR) shares perked up nearly 3% after Imperial Capital assumed coverage of the company and issued an "Outperform" rating with a $95.00 target. Shares were last changing hands at $78.31.
- Lululemon Athletica Inc (Nasdaq: LULU) is on tap to report quarterly results after the close. The company was in the spotlight after being forced to buy back a line of yoga pants that had been recalled due to a manufacturing problem that left pants see-through. Shares, which got walloped following the snafu, were little changed in the stock market today.
Stock Market: The Week Ahead
Monday look for Apple (Nasdaq: AAPL) to announce a new product or service, as is typically the case, at its annual development conference in California.
Tuesday, the Bank of Japan is expected to keep interest rates steady, but may extend the terms of its low-interest fund provisions.
May retail sales report on Thursday should show a rise 0.5%, thanks to a stronger showing from auto sales and robust retail activity.
Also on Thursday, Eastman Kodak Co (EKDKQ) moves closer to exiting bankruptcy when a Manhattan bankruptcy court reviews the company's restructuring plan.
Friday's June University of Michigan consumer sentiment report is projected to rise from May, which was the strongest read since 2007.
Also look for New York beauty/perfume company Coty to go public this week. The IPO is expected to raise nearly $1 billion. Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM) and Morgan Stanley (NYSE: MS) are lead underwriters. Shares will be priced at $17.50, which Barron's notes is reasonable at 22 times Coty's 2013 estimated annualized earnings of $0.78 per share.
Coty first filed to go public 11 months ago, shortly after an unsolicited attempt to buy Avon Products Inc. (NYSE: AVP) – with Warren Buffett's help – was unsuccessful.
- CNN Money:
S&P says U.S. credit rating now stable
- Bloomberg News:
Commodities Fall as Treasuries Drop; Stocks Fluctuate
S&P revises U.S. credit outlook to stable