Stocks Edge Up Ahead of G-20 Meeting

The Dow notched a small gain, rising for the first time this week, as strength in the energy and financial sectors buoyed the major equity indices.

Author:: Shanthi Bharatwaj
Publish date:: Nov 10, 2010 4:52 PM EST

NEW YORK (

TheStreet

) -- Stocks managed to eke out gains on Wednesday led by strength in financial and energy sectors.

Equities traded in a tight range, however, and spent most of the session in negative territory as investors grew cautious ahead of the start of the Group of 20 Summit on Thursday. European debt concerns also held buyers in check.

The

Dow Jones Industrial Average

finished 10 points, or 0.1% higher at 11,357, just 11 points below its session-high of 11,366. It was the first positive session this week for the blue-chip index, which hit its highest level in roughly two years last week. The

S&P 500

added 5 points, or 0.4%, to 1218, in Wednesday's trades, while the

Nasdaq Composite

advanced 16 points, or 0.6%, to 2578.

Energy stocks rose as oil prices reached new highs. The financial and retail sectors were also strong. Within the Dow,

Bank of America

(BAC) - Get Report

JPMorgan Chase

(JPM) - Get Report

and

Chevron

(CVX) - Get Report

were the biggest gainers.

Boeing

(BA) - Get Report

Wal-Mart

(WMT) - Get Report

and

Pfizer

(PFE) - Get Report

were among the Dow's biggest laggards.

The

Federal Reserve

plans to purchase $105 billion worth of treasuries next month, according to a statement on the New York Federal Reserve's website. That would include $75 billion in fresh purchases and $30 billion in reinvestment proceeds.

Global concerns weighed heavily on Wednesday. Irish 10-year bonds were caught in their longest streak of losses in years, sending spreads over 10-year German bonds to a new record, according to a

Bloomberg

report, which said Greek and Spanish bonds also weakened amid fresh concerns that debt-logged eurozone economies won't be able to pay down debt. In Europe, both the FTSE in London and the DAX in Frankfurt finished 1% lower.

The leaders of major economies are also fixated on the start of a two-day

G20 summit

in Seoul, South Korea, on Thursday. Currency manipulation is expected to be a major topic at the meeting as several leaders of emerging-market countries have accused the United States of weakening the dollar through additional stimulus measures, thereby making their economies more vulnerable to inflation.

Meanwhile, the dollar was rallying for the fifth consecutive day, with the dollar index up 0.3%. Perry Piazza of Contango Capital Advisors says the dollar sell-off prior to this run was overdone.

"There's some really, really bearish sentiment towards the dollar but we think it looks reasonably valued to the rest of the developed world," Piazza told

TheStreet

. "There are some signs that emerging market countries are going to cool off growth a little to ward off unwanted inflation, which is picking up a little in India, China and Brazil. So emerging markets' central banks could begin to want to cool off their economies a little, which would impact the dollar trade."

Piazza also expects the ECB to consider quantitative easing as debt concerns in the region flare up once again, which could also strengthen the dollar.

Global stocks traded mostly lower, although Japan's Nikkei increased by 1.4% as the dollar rose against the yen. Chinese markets were pressured by reports that some banks are increasing reserves to tighten lending and cool economic growth.

China's trade surplus jumped to $27.1 billion, its second-highest level this year in October. Hong Kong's Hang Seng fell 0.9%.

The number of Americans who sought unemployment benefits for the first time fell by 24,000 to 435,000 during the week ended Nov. 6, the Labor Department said Wednesday. Economists had expected claims to drop by 7,000, according to Briefing.com. The initial weekly jobless claim report came a day early because of Thursday's Veterans Day holiday.

The Department of Labor said import prices rose 0.9% in October, and export prices ticked 0.8% higher. Excluding volatile energy prices, imports increased 0.3% after similar growth in the previous month. Exports, excluding volatile agriculture prices, rose 0.7% after growth of 0.3% in September.

The Commerce Department said the U.S. trade deficit narrowed to $44 billion in September, which was slightly better than the shortfall of $44.8 billion that economists had been expecting, according to Briefing.com. September's figure compares to August's deficit of $46.5 billion.

The Energy Information Administration said crude oil inventories shed 3.7 million barrels in the week ended Nov. 5. The decline wasn't as bullish as the drop of 7.4 million barrels reported by the American Petroleum Institute late Tuesday but surprised analysts polled by Platts who had been expecting a 2.1 million-barrel build. Gasoline stocks lost 1.9 million barrels, exceeding expectations for a decline of 1.3 million barrels and distillates also surpassed expectations for a drop of 2 million barrels with a decrease of 5 million barrels.

On Tuesday afternoon, the Treasury Department said the U.S. fiscal deficit narrowed in the month of October to $140 billion in line with expectations.

The prospect of additional quantitative easing measures from the U.S.Federal Reserve prompted investors to pour into hard assets during Tuesday's session, pushing commodity prices to new highs. On Wednesday, a stronger dollar unwound some of that trade.

Crude oil traded higher on bullish inventory data. The January crude contract rose $1.09 to settle at $87.81 after rising as high as $88.06 a barrel. The December

gold contract lost $10.70 to settle at $1,399.10 an ounce, after settling at a new record of $1,410.10 on Tuesday.

The benchmark 10-year Treasury note was rising 4/32 Wednesday after the closing bell, weakening the yield to 2.650%.

Cisco

(CSCO) - Get Report

was shedding 4.4% to $23.41 in aftermarket trading, even though it beat estimates. Adjusted profit rose to 42 cents a share from 36 cents a share last year, above analysts' estimates of 40 cents.

Shares of Boeing fell more than 3% to $67.07 after it halted the test flights of its Dreamliner Jet on Wednesday, after a fire on board caused an emergency landing in Texas on Tuesday. The setback renewed concerns that Boeing could miss yet another deadline for the delivery of its first 787. In August the company pushed back expectations to the middle of the first quarter of 2011 from a prior projection of the first few weeks of the year.

Shares of

Polo Ralph Lauren

(RL) - Get Report

surged 7% to $108.28 after the company surpassed analysts' expectations and upped its year-end sales guidance for double-digit percentage growth, up from the mid- to high-single digits, previously.

Shares of

Macy's

(M) - Get Report

slipped 1.4% to $24.86 after it swung to a profit in the third quarter and topped consensus estimates by a nickel with earnings of 8 cents a share. Sales of $5.62 billion also beat expectations for revenue of $5.55 billion and same-store sales rose 3.9%.

Shares of

Campbell Soup

(CPB) - Get Report

fell 3.3% to $34.85 after the food company said its earnings would increase 2% to 4% instead of 5% to 7%.

Morgan Stanley

(MS) - Get Report

will sell 30.9 million

Invesco

(IVZ) - Get Report

shares for $21.48, less than Tuesday's closing price of $23.20. Invesco shares tumbled 3.9% to $22.29, while Morgan Stanley shares were slightly higher at $26.55.

General Motors

reported its third consecutive profitable quarter and said it expects to be profitable for the full year. The automaker, which is preparing for an initial public offering that could come as soon as next week, reported earnings of $2 billion, or $1.20 a share, on sales of $34.1 billion.

Dutch financial services company

ING

(ING) - Get Report

said third-quarter earnings slipped 26% on a goodwill writedown related to the U.S. insurance business. Shares listed in New York rose 3.6% at $11.34.

Google

(GOOG) - Get Report

plans to give its entire workforce a 10% raises next year. The stock is down 0.3% at $622.88.

Tesla Motors

(TSLA) - Get Report

jumped 19.2% to $29.36 after it reported higher than expected results after the bell on Monday.

Shares of

BJ's Wholesale Club

(BJ) - Get Report

shot up 13% to $47.34 on reports that it had hired Morgan Stanley to help sell the company.

Halliburton

(HAL) - Get Report