Ron Johnson Steps Down and Earnings Season Begins: Market Recap

The U.S. equity markets managed to overcome early losses on Monday and closed the day with solid gains across the board. Investors seemed keen to forget Friday’s disappointing jobs report and focus on earnings season.

DJIA: +0.33% to 14,613.50 S&P 500: +0.63% to 1,563.07 NASDAQ: +0.57% to 3,222.25
Gold: -$3.40 to $1,572.50 per ounce WTI Crude: +0.90% to $93.53 per barrel U.S. 10-Year: +0.029 points to 1.743%

Investors seem to be reacting favorably to Japan’s aggressive new monetary strategy, which was announced last Thursday and will begin taking effect immediately. This initiative, championed by BoJ Governor Haruhiko Kuroda and Prime Minister Shinzo Abe, shares a lot in common with the highly-accommodating monetary policy seen in the U.S.

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However, where the Federal Reserve is throwing $85 billion at the yield curve every month, or about 0.6 percent of GDP, the BoJ will be spending 7.5 trillion yen ($80 billion per month), or almost 1.4 percent of GDP. Purchases will be made in six installments a month. The yell fell to trade at 99.3990 to the dollar.

Alcoa (NYSE:AA), the world’s third-largest producer of aluminum and a Dow Jones Industrial Average component, kicked off earnings season on Monday after the markets closed. The stock closed the day up 1.82 percent, although it gave up some of that gain early in post-market trading. Revenue of $5.8 billion was pretty much in line with expectations, while earnings of $0.11 per share beat expectations for $0.08 per share… (Read more.)

J.C. Penney (NYSE:JCP) and Macy’s (NYSE:M) are back in court this week to continue the fight for the right to sell Martha Stewart-branded merchandise. Both retailers have indicated that the branded merchandise is a top seller, particularly heading through a fairly short but highly-lucrative Mother’s Day (May 12) shopping season. Shares closed the day up 2.72 percent and 1.38 percent, respectively.

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Separately, CNBC reports that Ron Johnson “is out.” Shares climbed 3.8 percent in post-market trading.

General Electric (NYSE:GE) closed the day up 0.8 percent after it announced a joint agreement with Lufkin (NASDAQ:LUFK) to acquire the manufacturer for $3.3 billion, or $88.50 per share in cash. This is a 38 percent premium on the stock’s Friday closing price, and about 20 percent higher than the mean analyst price target of $73.50. Lufkin stock closed the day up 37.6 percent.

AIG (NYSE:AIG) closed up 3.81 percent. In the absence of major catalysts, investors could be reacting favorably to news that the company is asking a federal judge to stop former CEO Maurice Greenberg from suing in its name.

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