STOCKS RALLY, TREASURIES TUMBLE AND APPLE OFFERS A DIVIDEND: Here's What You Need To Know
Apple finally gave in to shareholder demands. Would Steve Jobs have done it?
First the scoreboard:
Dow: 13,239.1, +6.5, +0.0%
S&P 500: 1,409.7, +5.5, +0.4%
NASDAQ: 3,078.3, +23.0, +0.7%
And now the top stories:
Apple finally offered a new plan for its huge pile of cash. The company will be paying a $2.65 per share quarterly dividend. And it also authorized the repurchase of $10 billion worth of stock. Traders didn't have a whole lot of time to prepare for this. So, how did the market take it? Eh. Apple shares inched past $600, but there wasn't a notably bullish or bearish reaction. Some big names in the investment community chimed in. Barton Biggs warned that Apple could go the way of Sony. Doug Kass tweeted that he was short Apple. In other Apple news, CEO Tim Cook said the company sold a record number of the new iPad this weekend.
The U.S. trading session was pretty uneventful, but stocks did trade higher for most of the day. Strategists have become increasingly split on the matter. In his latest Viewpoints note, Goldman's Jim O'Neill suggested that the low trading volumes of late could actually prove to be bullish for stocks. BlackRock's Bob Doll is also maintaining his bullish tone.
Leading the bearish arguments is Barclays' Barry Knapp, who warns that stocks are facing a "heads I win, tails you lose, scenario" with the upcoming scheduled end of the Fed's Operation Twist. John Hussman has repeated his warning that the market looks exactly how it did before the last crash. Famed stock market forecaster Doug Kass cut his S&P 500 valuation to 1335 from 1345.
One new concern that has caught everyone's attention is rising interest rates. The 10-year Treasury note yield went north of 2.35 percent today. Over the weekend, DoubleLine Capital's bond guru Jeff Gundlach warned that rates north of 3 percent would be bad news for the economy.
One notable, but largely overlooked piece of economic data today was NAHB homebuilder sentiment index, which came in at just 28 versus economists' expectation for an increase to 30. Last month's figure was revised down to 28 from a previous reading of 29. 10 States Where You Can Get Incredible Deals On Foreclosed Homes >
Barron's cover story in this week's print edition called for a bottom in housing prices by the beginning of 2013. Author Jonathan Laing citied a number of experts including famed housing economist Robert Shiller. In the piece, Shiller pointed to improvements in the homebuilder sentiment index as one powerful indicator supporting the idea that the heath of the housing market was improving. Should today's NAHB read affect Barron's and Shiller's expectations?
Shares of Lions Gate exploded out of the gates today on hype that "Hunger Games" will be a monster blockbuster. One analyst estimates the movie could generate over $300 million in domestic ticket sales.
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