Stocks witness their best day since October 2002

The US market soared to record highs today, Thursday, 12 July, 2007, with the indices witnessing the best day in almost four years. Rio Tinto’s bid for Alcan and good retail numbers from Wal-Mart started the party on Wall Street since trading began.

The Dow Jones Industrials rose more than 283 points to close at 13,861.73. It was Dow’s first ever crossing of 13,800 mark and biggest one day point wise gain since October 2002. Tech heavy Nasdaq gained 49.44 points to close at 2,701.73 and S&P 500 too closed higher by 28.94 points at 1,547.7. It was Nasdaq’s best closing since February, 2001.

Not only did all 10 sectors finish to the upside, but the more heavily-weighted areas in the S&P 500 were also among today's biggest winners. The Financial sector was the most influential gainer.

All the thirty Dow stocks closed in green today. Alcoa, American Express and Intel were the top most three Dow winners today. Caterpillar, Wal-Mart, Honeywell and Merck followed them.

Before market opened today morning, Rio Tinto submitted its bid and the same was accepted by Alcan. The company has agreed to acquire Alcan for $101 a share, or $38.1 bln, representing a 33% premium to Alcoa's $28 billion bid of $76 per share.

Wal-Mart shares were up almost 2.5% today after the company said sales rose 2.4% in June, above its expectation, that sales would be no more than 2% or even flat. The company also said July's same-store would rise between 1% and 2%.

Wal-Mart, Alcoa, Intel and American Express lead the rally

When market opened in the morning, yesterday's recovery efforts were carried over. More M&A news and surprisingly decent June same-store sales figures just added further enthusiasm in the market.

Of the other nine sectors trading higher, financials ranks second. Stocks were holding on to the bulk of their sizable gains as buying remained widespread across the board.

Leading the Dow gains was Alcoa which jumped 6.7%. The aluminum giant's hostile bid for Canada's Alcan was handily topped by Anglo-Australian Rio Tinto. Alcan shares jumped up by 10%.

Intel shares rising almost 6% lent the main support to Nasdaq. The stock rose after Banc of America Securities raised its price target to $29 from $28 previously and lifted its second-quarter estimates.

American Express added 23 points to the Dow, after Lehman Brothers raised its 2007 and 2008 estimates for the credit card issuer.

Onward and upward remained the driving mantra

Onward and upward remained the driving mantra for stocks going into the close as the S&P 500 was finally in record territory.

Crude oil futures fell marginally today after refiners in USA restarted their operation. Crude-oil futures for light sweet crude for August delivery closed at $72.5/barrel (lower by $0.06/barrel or 0.08%) on the New York Mercantile Exchange. Futures retreated from $73.80 reached earlier in the session.

Trading volumes showed 1.6 billion shares exchanging hands on the New York Stock Exchange and 2.3 billion trading on the Nasdaq. Advancing issues topped decliners by 3 to 1 on the NYSE and by 21 to 8 on Nasdaq.

A host of economic data will help set the tone of trading tomorrow. June retail sales and import/export prices will both be out at 8:30 ET followed by business inventories and a preliminary read on Michigan Sentiment at 10:00 ET. On the earnings front, Dow component General Electric is expected to report its results before the market opens.