Dow holds firm, Apple jumps, gold slumps, ASX opens flat

It was unlikely the markets would top yesterday’s big gains, but the lack of real retracement was a positive sign the bulls are holding firm, writes The Motley Fool.

The three U.S indexes put in mixed but essentially flat performances. The Dow Jones Industrial Average (INDEX: ^DJI) gained 16 points, the Nasdaq (INDEX: ^IXIC) less than one point and the S&P 500 lost less than 2 points. At the end of the day, for all the ups and downs, it was much ado about nothing.

Here in Australia, the S&P/ASX 200 (INDEXASX:XJO) has opened down 14 points, or an uninspiring 0.3 per cent.

The Dow showed the most resilience thanks to the strong performance of several financial components. Yesterday’s stress test results yielded big 6% and 7% pops for JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC) , and the good news continued overnight Wednesday. Bank of America gained an additional 4%, leading all Dow components, while American Express (NYSE: AXP) wasn’t far behind, with a 3.5% increase. Financials led the U.S. into the crisis and lending remains depressed, but if credit markets open up as the U.S. recovery continues to appear  to be taking hold, we could be at the start of a virtuous cycle.

Meanwhile, the Nasdaq also held on to yesterday’s gains, helped by Apple (Nasdaq: AAP) . The world’s largest company was the most active on the index: 50 million shares exchanged hands as it continues its 2012 run that has seen it gain 46% so far this year. Apple popped 3.8% after a Morgan Stanley analyst put a base-case share-price target of $720, with a bull case at a whopping $960. Some are starting to voice concern that the stock has risen too far, too fast, but with consumers frothing for the new iPad’s release just days away, Apple’s string of hits doesn’t seem likely to be in jeopardy any time soon.

Gold tumbled again, dropping 3 per cent to $US1642.90 an ounce. This was the lowest gold settlement price in more than eight weeks, reports AAP. Reports of the end of the world have seemingly been greatly exaggerated. Local gold mining stocks Medusa Mining (ASX: MML), Kingsgate Consolidated Limited (ASX: KCN), St. Barbara Limited (ASX: SBM) and Newcrest Mining (ASX: NCM) are all taking it on the chin. Even BHP Billiton Limited (ASX:BHP) is down 1.6 per cent.

The Australian dollar is trading firmly below $US1.05.

Telstra Corporation (ASX: TLS) says it has successfully completed a 1 billion euro bond issue with a 3.5 per cent annual coupon and a maturity date of September 21, 2022.

Fortescue Metals Group (ASX: FMG) has upsized to $US2 billion its offering of Senior Unsecured Notes. A mining boom? Two billion times, yes.

Myer Holdings (ASX: MYR) first half sales have fallen 1.7 per cent, with comparable store sales down 2 per cent. The struggling retailer announced a 10 cents interim dividend, down from 11 cents last year. Looking ahead, Myer expect full year sales to be flat to down on the previous year.

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