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Stocks Post Modest Gains Sending Dow, S&P 500 to New Closing Highs

Dan Berman
Hot Stock Minute

The market ended modestly higher after strong earnings from Citigroup helped offset unimpressive economic data here and abroad. The Dow and S&P 500 set new record closing highs, but still have not topped intraday highs hit in late May. Here at home June retail sales disappointed. The Commerce Department logged just a 0.4% increase for the month when expectations were for 0.8%. Separately, business inventories ticked up 0.1% percent in May, when economists had forecast they would be unchanged. Overseas, the Chinese government says GDP during the second quarter grew at an annual rate of 7.5% down from 7.7% in the prior quarter.

Citigroup (C) enjoyed solid gains rising 2% on its quarterly earnings. The company beat estimates posting $1.25 a share. Expectations had been for $1.17. Revenue also beat, topping $20 billion dollars for the quarter when consensus had been for $19.74 billion. Citi's profits were up 42% over the same period a year ago. Since then the company has cut costs by firing thousands of workers and scaling back operations in less profitable countries. The stock is up a whopping 90% over the past year.

Boeing (BA) bounced back more than 3% after falling 5% on Friday. The drop stemmed from troubles with two of the company's 787 Dreamliners. In one case a plane parked at London's Heathrow Airport caught fire. In the other a 787 headed from England to Florida had to turn around because of a technical issue. Investigators say the fire had nothing to do with the plane's lithium batteries which were previously labeled a fire hazard and lead to a grounding of all 787s for several months. Despite the troubles with the Dreamliner, shares of Boeing have been up 32% this year.

Leap Wireless (LEAP) has more than doubled since Friday when AT&T (T) announced plans to acquire the pay-as-you-go cell carrier. AT&T will be paying $1.2 billion for Leap. The acquisition will give the company more airwaves. There is also talk that this could be the beginning of an AT&T buying spree. The company may be looking at Europe in particular to increase as a way of expanding. AT&T stock is up just 2% so far this year as it struggles to grow profits with its existing businesses.

BlackBerry (BBRY) shares rose over 1% on news that it has started deep discounts of its flagship Z10 smartphone. Major carriers are now offering the device for just $49, which is 75% off the original price. Smartphones often come down in price as carriers look to unload old inventory ahead of new releases. In this case, however, the discount is a further sign that the new phone has failed to generate much excitement.

Tiffany (TIF) climbed over 3% on an upgrade. David Schick of Stifel Nicolaus raised the company to "buy" from "hold" and set a price target of $92. Shares opened the day at about $77. The analyst's note says business in the U.S. is improving as people start to feel wealthier.