July 22nd, 2010
06:27 PM ET

Dow up 200 points

A look at highlights from the day's business news:

Dow's 200-point rebound

Stocks rallied Thursday after better-than-expected earnings and forecasts from 3M, Caterpillar, AT&T and UPS helped reassure investors about the pace of the economic recovery.

The Dow Jones industrial average rose 202 points, or 2%. The S&P 500 index jumped 24 points, or 2.3%. The Nasdaq composite gained 58 points, or 2.7%.

Stocks slumped Wednesday after Federal Reserve Chairman Ben Bernanke told Congress the outlook for the economy was "unusually uncertain," adding to worries about the pace of the recovery.

But the tone was positive Thursday, on the back of improved earnings,  better-than-expected housing market news and a surge in European markets.

Dow component Caterpillar reported higher quarterly sales and earnings that topped estimates due to better sales of gear for the mining, infrastructure and energy industries. Caterpillar also boosted its 2010 profit forecast. Shares gained 1.4%.

Fellow Dow component 3M reported higher quarterly sales and earnings and said that full-year 2010 profit will exceed its earlier targets, thanks to strong demand in both the United States and abroad. The company is seen as a good proxy for the economy due to the breadth of its business, which includes everything from Scotch tape to films for flat-screen TVs.

Treasurys fall on strong earnings, economic data

Prices for U.S. Treasurys fell Thursday as investors flocked to more risky assets following upbeat reports on corporate earnings and a smaller-than-expected drop in home sales.

The benchmark 10-year note was down 13/32 to 104-28/32 and its yield rose to 2.93% from 2.88% late Wednesday.

Bond prices and yields move in opposite directions.

The 2-year note was little changed at 100-3/32 and its yield was 0.58%, while the 5-year note fell 5/32 to 100-30/32 with a yield of 1.68%. The 30-year bond lost 20/32 to 107-27/32 and its yield was 3.93%.

Demand for Treasurys waned as stocks rallied on strong quarterly results from blue-chip companies such as Caterpillar, UPS and 3M.

Treasurys are widely considered to be one of the most secure assets
available. As a result, prices often fall when investors are optimistic about the economy and less concerned about safety.

But the retreat came despite mixed reports on the housing market,
unemployment and an index of leading economic indicators.

Dollar under pressure

Investors are dumping the dollar this week, as stocks remain volatile, worries about a sluggish U.S. economic recovery persist and confidence in the euro zone and nations abroad increases.

A string of disappointing economic reports this week, along with
pessimistic comments from Federal Reserve Chairman Ben Bernanke about an "unusually uncertain" outlook for the U.S. economy, have caused investors to fear that the recovery is stalling.

Meanwhile, upbeat data from the euro zone and the U.K. have highlighted strength in overseas economies, making the euro and the British pound  increasingly attractive and limiting the appeal of the safe-haven dollar.

While stocks have been choppy, tumbling on Wednesday and staging a comeback on Thursday, the greenback has hovered near 2-month lows versus the euro and the British pound and 8-month lows versus the Japanese yen this week.

CNNMoney.com reporters Alexandra Twin, Blake Ellis and Ben Rooney contributed to this report.

Post by:
Filed under: Economy
soundoff (One Response)
  1. Saundra

    Rick Sanchez : To your guest, tell him not to forget that the Indians were the people that was native to America before "we Europeans" started coming here in the 1600's. So where does he want to be sent?!!!!!

    July 22, 2010 at 8:40 pm | Report abuse |