Dow 12,880 (+2.20%) S&P 1,362 (+2.49%%)
BAMM! The stock market ended the week/month with more bang than the opening scene of a Michael Bay movie. Industrial and technology stocks whose businesses are most sensitive to growth led the way as the Dow powered up 278 points – and the S&P 500 completed its biggest June since ’99. US econ data was mixed and had little impact on the market jump: Consumer spending in May was unchanged after 6-straight increases as economists expected, income nudged up 0.2%, while the Reuters/University of Michigan June consumer sentiment poll edged down slightly to reach a 2012 low. The real Big Bertha market driver was the final day of the EU summit that yielded some huge developments….
EU Summit announces successful resolutions
European leaders made surprisingly significant progress on the 2nd day of the EU summit to deal with their debt problems. There were 2 main accomplishments: First, the EU agreed to loosen conditions to bailout funds for Spain & Italy if they need one. Now a bailout could go directly to their struggling banks that need it most and the funds wouldn’t have as crippling austerity demands attached. This makes a Spanish bailout much more effective and unlikely to increase the government’s debt burden further. The summit also announced plans to create a union of the continent’s banks, another sign of strength through solidarity. After similar promises and failed events over the last year, expectations were initially low for the summit and there still is much to be done – but this was big and the 2 beneficiaries of the news battle for the EuroCup final Sunday.
InBev expands, Smith & Wesson jumps, Nike, Ford, GM and RIMM shares fall
AB Inbev (BUD) is a behemoth beer brewer that owns names like Stella Artois, Budweiser and top-shelf Natty Light. After snatching up Anheuser-Busch in July ’08, Belgian-based Inbev announced its purchase of Mexican brew distributor Grupo Modelo today for $20B. Add Corona to its liquid arsenal and InBev will now brew and bottle 25% of the world’s beer. In retail apparel, Nike (NKE) dropped almost 10% after the econ slowdown in china led to lower-than-expected quarterly earnings. Shares of carmakers Ford (F) and General Motors (GM) also fell, but on fewer European buyers. And in a potentially apocalyptic sign, gun-producer Smith & Wesson (SWHC) jumped 20.5% on increased firearms sales. Blackberry-creator Research in Motion (RIMM), on the other hand, fell another 20% after yesterday’s news of cutting 1/3 of its workforce.
- The stock market will close early at 1pm on Tuesday, July 3rd and be closed for all of Wednesday, July 4th. Enjoy your burgers.
- All eyes will be on Friday’s June Labor Department Employment Report – can it make up for May’s disappointing numbers?
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