|
| |
About
A weblog about stocks, technical analysis, the market and other things that pop into the mind of Manuel Backus, founder and head trader of Portfolio Crafter and First Hour Trading. Contact
Email: manuel [AT] manuelbackus.com
Links
Subscribe
Receive weekly trading tips by email.
|
|
« October 2006 |
Main
| December 2006 »
Stocks closed little changed today but sharply higher on the month. Today's session featured early weakness caused by soft economic data and disappointing retail sales as well as a late-session spurt of buying. Investors were unwilling to make any decisive moves amid higher oil prices and a big rally in the bond market.
Today, the Dow Jones industrial average closed down 4.80 or 0.04% to 12,221.93, the broader S&P 500 closed up 1.15 or 0.08% to 1,400.63, and the Nasdaq composite closed down 0.46 to 2,431.77. For the month, the Dow gained 1.2%, the S&P 500 gained 1.6% and the Nasdaq gained 2.7%.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 7 to 4 on volume of 1.97 billion shares. On the Nasdaq, advancers topped decliners 8 to 7 on volume of 2.09 billion shares.
Treasury prices rallied as investors eyed weak reads on the economy and opted to move money into the safe haven of bonds. Oil and gold prices gained, boosting stocks in those sectors, but dragged on the rest of the market. The slew of discouraging economic reports, including a surprisingly weak read on manufacturing, sluggish November retail sales, higher oil prices and further signs of erosion in housing.
Tomorrow, trading will be influenced by the November ISM national manufacturing survey, the October construction spending report and November sales results from automakers. Additionally, Federal Reserve Chairman Ben Bernanke, would also give a short welcoming speech at a monetary policy conference in Washington.
The Chicago PMI read on manufacturing in the Midwest region, had the index fall to 49.9 in November, below the level of 50 that is seen as indicating expansion. Economists thought it would rise to 54.5 from 53.5 in October. October personal income rose 0.4%, just short of economists' forecasts, after rising 0.5% in September. Personal spending rose 0.2%, versus an upwardly revised rise of 0.1% the previous month. Economists thought spending would rise 0.1%. Another report showed that home prices rose in the third quarter, but at a slower pace than in the second. In corporate news, November sales readings seemed to suggest that although many chains did well in the key post-Thanksgiving holiday period, including Black Friday, overall sales gains for the month were muted.
Shares of Wal-Mart Stores (NYSE: WMT) closed down $0.79 or 1.7% to $46.10, on news that November same-store sales fell 0.1% and that December sales would be flat to up 1%. This has been blamed on weakness in its home and apparel businesses. November's total sales, which include contributions from both Wal-Mart and Sam's Club stores, climbed 11.9% to $28.57 billion.
Stock of Microsoft Corp. (Nasdaq: MSFT) closed down 0.7% despite announcing that it will begin shipping its next-generation Vista OS to corporate customers. It's taken five years for Microsoft Corp. to roll out a new version of its Windows OS, so it's understandable that CEO Steve Ballmer is celebrating its release by ringing the bell at the Nasdaq stock market. However, no one is predicting that its launch will have much of an impact on Microsoft's finance, especially for the fiscal year ending in June.
Shares of Pfizer (NYSE: PFE) closed up $0.42 or 1.6% to $27.49, after the company boosted its fiscal 2006 earnings forecast, reflecting lower costs and higher revenues in the fourth quarter. It expected the adjusted diluted EPS to be at least $2.05, compared with a prior forecast of about $2. The higher forecast comes on the heels of its plans to cut 20% of its U.S. sales force, part of its ongoing effort to streamline operations and cut costs.
U.S. light crude oil for January delivery gained 67 cents to settle at $63.13 a barrel on the New York Mercantile Exchange.
Stock of Microsoft Corp. (Nasdaq: MSFT) closed down 0.7% despite announcing that it will begin shipping its next-generation Vista OS to corporate customers. It's taken five years for Microsoft Corp. to roll out a new version of its Windows OS, so it's understandable that CEO Steve Ballmer is celebrating its release by ringing the bell at the Nasdaq stock market. However, no one is predicting that its launch will have much of an impact on Microsoft's finance, especially for the fiscal year ending in June.
Shares of Pfizer (NYSE: PFE) closed up $0.42 or 1.6% to $27.49, after the company boosted its fiscal 2006 earnings forecast, reflecting lower costs and higher revenues in the fourth quarter. It expected the adjusted diluted EPS to be at least $2.05, compared with a prior forecast of about $2. The higher forecast comes on the heels of its plans to cut 20% of its U.S. sales force, part of its ongoing effort to streamline operations and cut costs.
Stocks rallied to close higher after the third-quarter economic growth was revised higher and inflation was revised lower. Additionally, Intel Corp. (Nasdaq: INTC) and Verizon Communications (NYSE: VZ) provided support following positive broker comment. The release of the Federal Reserve's "beige book' survey of economic conditions also comforted investors about the economy.
Today, the Dow Jones industrial average closed up 90.28 or 0.7% to 12,226.73, the broader S&P 500 closed up 12.76 or 0.9% to 1,399.48, and the Nasdaq composite closed up 19.62 or 0.8% to 2,432.23.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by 13 to 3 on volume of 1.60 billion shares. On the Nasdaq, advancers topped decliners 20 to 9 on volume of 1.94 billion shares.
The U.S. economy grew at a 2.2% annual pace in the third quarter, faster than the 1.6% initially estimated, the Commerce Department reported Wednesday in its first revision to the gross domestic product report. Economists expected growth to be revised to 1.8%. The report helped quell some recent concerns about how much the economy would slow, particularly amid the slump in the housing sector.
Sales of new homes fell 3.2% in October to a seasonally adjusted annual rate of 1.004 million, against the forecast of 1.05 million. However, the median price of a new home sold in the month jumped to $248,500, up 13.9% from September and 1.9% from a year earlier.
The Federal Reserve's " Beige Book' survey of its 12 districts, showed continued moderate growth in most parts of the country and a pickup in consumer spending outside the housing and auto sectors. The strong GDP report quelled worries about the speed of the economic slowdown, but also reminded investors that the Fed is unlikely to start cutting interest rates anytime soon, something Wall Streeters have been hoping for.
Shares of Ford (Nasdaq: F) closed up $0.02 to $8.17, after stating that more than half of its U.S. factory work force has accepted offers to retire or resign, beating company targets. Therefore, the company will see annual cash outflow of $17 billion through 2009.
Shares of Pfizer (NYSE: PFE) closed up $0.02 to $27.07, after it announced that it was cutting its U.S. sales force by 20% as a means of reducing costs. However, it did not say when the reductions would take place. Pfizer is hoping to produce annual savings of $4 billion a year by 2008. Separately, a FDA advisory panel said that Pfizer's pain reliever Celebrex should be approved for treating rheumatoid arthritis in children, although the panel also questioned its safety.
Shares of Tiffany Co. (NYSE: TIF) closed up $2.29 or 6.4% to $38.22, after reporting 23% higher quarterly earnings that beat estimates and issuing bullish earnings-per-share guidance for fiscal 2007. The growth was helped by growth in the U.S. The company reported a net profit of $29.1 million, from $23.8 million in the year-ago period. Net sales rose 9.5% to $547.8 million, while same-store sales rose 4%. Analysts had expected a revenue of $544 million.
U.S. light crude oil for January delivery jumped $1.47 to settle at $62.46 a barrel on the New York Mercantile Exchange. Oil jumped after the weekly oil inventories report showed a surprise dip in crude, gas and distillate supplies, amid forecasts for cold temperatures across the U.S.
Shares of Pfizer (NYSE: PFE) closed up $0.02 to $27.07, after it announced that it was cutting its U.S. sales force by 20% as a means of reducing costs. However, it did not say when the reductions would take place. Pfizer is hoping to produce annual savings of $4 billion a year by 2008. Separately, a FDA advisory panel said that Pfizer's pain reliever Celebrex should be approved for treating rheumatoid arthritis in children, although the panel also questioned its safety.
Shares of Tiffany Co. (NYSE: TIF) closed up $2.29 or 6.4% to $38.22, after reporting 23% higher quarterly earnings that beat estimates and issuing bullish EPS guidance for fiscal 2007. The growth was helped by growth in the U.S. The company reported a net profit of $29.1 million, from $23.8 million in the year-ago period. Net sales rose 9.5% to $547.8 million, while same-store sales rose 4%. Analysts had expected a revenue of $544 million.
Stocks closed higher on as investors digested a spate of economic data and remarks from Federal Reserve Chairman Ben Bernanke and came back to the market following yesterday’s sharp losses. However, worries about the economy and a run up in oil prices kept investors on edge.
Today, the Dow Jones industrial average closed up 14.74 or 0.12% to 12,136.45, the broader S&P 500 index closed up 4.82 or 0.35% to 1,386.72, and the Nasdaq composite index closed up 6.69 or 0.28% to 2,412.61.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by more than 21 to 11 on volume of 1.59 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin of 15 to 14 on volume of 1.99 billion shares.
Market woes started with weak reports on manufacturing, housing and consumer confidence. While the economic news was fairly negative, the flip side of that is that it increases speculation that the Federal Reserve will cut interest rates eventually. Hawkish comments from Federal Reserve chairman Ben Bernanke added fuel to fire. He said that the economy is roughly slowing at the pace the central bank had expected, reflecting the slowdown in the housing market. He also said inflation has moderated of late, due in part to the decline in oil and gas prices. However, the level of the "core" inflation, has remained "uncomfortably high."
While the median price of existing homes sold in October fell for the third month in a row. The overall existing home sales rose to a 6.24 million unit rate, against the expected fall to a 6.14 million unit rate. The consumer confidence fell to 102.9 in November, missing the expectations of economists, who thought it would rise to 106. Additionally, orders for durable goods sank 8.3% in October, against the expected drop by 5%. These report raised concerns about a broadening of the economic slowdown, suggesting that businesses may be increasingly cautious, reducing their demand for equipment and software."
Shares of Boeing (NYSE: BA) closed up $0.57 to $87.94, on news that it has received a $5.7 billion order from Air Berlin for 85 jets to be delivered between 2007 and 2014. Air Berlin, said it would order 60 Boeing 737-800 jets. Adding that 25 additional planes would be for its subsidiary DBA, which it bought in August.
Stock of Palm Inc. (Nasdaq: PALM) fell 7.7% to $14.19 after the company slashed its fiscal second-quarter forecast, citing the delayed U.S. rollout of one of the newest versions of its Treo line of handheld smartphones. The Treo 750, which is already selling in Europe, has not been certified in time to sell in the U.S. this quarter.
Shares of Nokia Inc. (NYSE: NOK) closed down 1% at $20.09 after it cut its operating margin forecast for the next two years, predicting slower growth in the global phone market. It lowered its overall operating margin outlook to 15%, from a forecast of 17% set in December 2005. This reflects the company's rising exposure to the infrastructure market after the merger of its network unit with Siemens (NYSE: SI).
Stock of Scottish Power (NYSE: SPI) closed down $0.02 to $57.58, after Spain's Iberdrola said that it will buy it for $22.5 billion in cash and shares to create Europe's third-biggest utility and a world leader in renewable energy. The price is slightly below that expected by some analysts. Rumors had suggested the bid could be for as much as £12 billion, so the fact that the actual figure falls short will prove frustrating to investors.
U.S. light crude oil for January delivery rose 67 cents to $60.99 a barrel on the New York Mercantile Exchange. The rise is on speculation that the OPEC could cut output further in a bid to stabilize prices close to $60 a barrel.
Shares of Boeing (NYSE: BA) closed up $0.57 to $87.94, on news that it has received a $5.7 billion order from Air Berlin for 85 jets to be delivered between 2007 and 2014. Air Berlin, said it would order 60 Boeing 737-800 jets. Adding that 25 additional planes would be for its subsidiary DBA, which it bought in August.
Stock of Palm Inc. (Nasdaq: PALM) fell 7.7% to $14.19 after the company slashed its fiscal second-quarter forecast, citing the delayed U.S. rollout of one of the newest versions of its Treo line of handheld smartphones. The Treo 750, which is already selling in Europe, has not been certified in time to sell in the U.S. this quarter.
Stock of Scottish Power (NYSE: SPI) closed down $0.02 to $57.58, after Spain's Iberdrola said that it will buy it for $22.5 billion in cash and shares to create Europe's third-biggest utility and a world leader in renewable energy. The price is slightly below that expected by some analysts. Rumors had suggested the bid could be for as much as £12 billion, so the fact that the actual figure falls short will prove frustrating to investors.
Black Monday followed the Black Friday, with stocks slumping and the Dow industrials posting its biggest one-day percentage drop since July. Despite positive preliminary results from the holiday shopping season kickoff, investors eyed higher oil prices, a weaker dollar and a cautious outlook from Wal-Mart (NYSE: WMT) and decided to head for the exits. Additionally, jitters about the slew of economic news due later this week weighed as well, as did a sense that the recent rally was due for a pullback.
Today, the Dow Jones industrial average closed down 158.46 or 1.29% to 12,121.71, its biggest one-day point and percentage drop since July 13. The broader S&P 500 index closed down 19.05 or 1.36% to 1,381.90. The Nasdaq composite index closed down 54.34 or 2.21% to 2,405.92, its biggest one-day percentage decline since June 5.
Market breadth was negative. On the New York Stock Exchange, losers topped winners by more than four to one on volume of nearly 1.6 billion shares. On the Nasdaq, decliners beat advancers by a similar margin on volume of 1.97 billion shares.
While stocks were overdue for a correction, this was exacerbated by some negative news such as, a slide in the U.S. dollar to a 20-month low versus the euro, a nearly 2% jump in the price of oil, and a big run up in gold prices. A weak outlook from Wal-Mart Stores (NYSE: WMT) called into question the otherwise robust early reports on the start of the holiday shopping period. The sell-off was related to bulls taking a hiatus of sorts after the advance.
The initial positive reports from retailers on "Black Friday," continued to flow, suggesting shoppers came out in droves, although it was unclear how this would impact retailers' overall profits. The holiday shopping season is off to a running start. More than 140 million shoppers hit the stores, spending an average of $360.15, up 18.9% from last year's $302.81. ShopperTrak estimated a 6% sales increase overall for Friday alone, to $8.9 billion.
Shares of Google (Nasdaq: GOOG) closed down $20.25 or 4% to $484.75, after a report in Barron's over the weekend said the stock - which recently surpassed $500 per share for the first time - may be too expensive relative to earnings.
Shares of Affiliated Computer Services Inc. (NYSE: ACS) lost almost 1% after the Dallas provider of information-technology solutions said its CEO and CFO resigned in the wake of an inquiry into the company's stock-options accounting. "Certain conduct" of the two executives violated its code of ethics for senior officers, ACS said in a statement.
Shares of Wal-Mart (NYSE: WMT) closed down $1.29 or 2.7% to $46.61, after it forecast that November same store sales, would fall 0.1%. The forecast included the "Black Friday" results.
U.S. light crude oil for January delivery rose $1.08 to settle at $60.32 a barrel on the New York Stock Exchange. News that Saudi Arabia's oil minister is open to supporting another cut in production at the December meeting of the OPEC sent the price Northwards.
Stocks closed early with minor losses on the day and mixed on the week with investors monitoring a sharp decline in the U.S. dollar and awaiting news about consumer activity as the holiday-shopping season got under way. All financial markets were closed yesterday for Thanksgiving, and the stock markets closed at 1 p.m. today - 3 hours early.
Today, the Dow Jones industrial average closed down 46.78 or 0.38% to 12,280.17, the broader S&P 500 index closed down 5.14 or 0.37% to 1,400.95, ad the Nasdaq composite closed down 5.72 or 0.23% to 2,460.26. For the week, the Dow lost 0.5%, the S&P was barely changed, and the Nasdaq gained 0.6%.
Market breadth was mixed and volume was light. On the New York Stock Exchange, advancers beat decliners by 8 to 7 on volume of 520 million shares. On the Nasdaq, losers topped winners 15 to 12 on volume of 690 million shares.
With many Wall Streeters making it a four day weekend, volumes were very low. Additionally, with no economic or big earnings reports released today, the focus was on Black Friday which is typically seen as the start of the holiday shopping season. Initial reports from retailers were positive, with bargain hunters taking advantage of a variety of stores opening as early as midnight to usher in the throngs of shoppers.
Shares of Advanced Semiconductor Engineering (NYSE: ASX) closed up $0.80 or 15% to $6.06, on news that a private equity group, led by the Carlyle Group, is planning a $5.5 billion bid for the Taiwanese chip packaging firm.
Stock of Systemax closed up $2.08 or 17% to $14.20, on reporting higher fiscal second-quarter sales and earnings.
Stock of IBM Corp. (NYSE: IBM) closed down 17 cents at $93.35, after it agreed to pay $65 million to resolve all claims in an overtime-pay, class-action suit filed in a Northern California federal court in January.
U.S. light crude oil for January delivery rose 66 cents to $59.90 a barrel in electronic trading.
Stocks closed slightly higher as a big drop in crude oil prices and better than expected earnings from Dell Inc. (NYSE: DELL) offset an unexpected drop in consumer confidence. The Nasdaq composite surged to its highest point in nearly six years, but the blue-chip averages meandered the day before Thanksgiving, with investors distressed by a slump in GM (NYSE: GM) shares on news that one of its major shareholders has shed stock.
Today, the Dow Jones industrial average closed up 5.36 or 0.04% to 12,326.95, the broader S&P 500 index closed up 3.28 or 0.23% to 1,406.09, and the Nasdaq composite index closed up 11.14 or 0.45% to 2,465.98, ending at its highest point since February 2001.
Market breadth was mixed and volume was moderate. On the New York Stock Exchange, winners beat losers 19 to 12 on volume of 1.3 billion shares. On the Nasdaq, decliners and advancers were narrowly mixed on volume of 1.6 billion shares.
Stocks seesawed throughout the day, as investors reacted to falling oil prices and the day's corporate news. Stocks were expected to remain volatile, due to lower than usual volume, with many Wall Streeters checking out early ahead of Thanksgiving holiday.
In economic news, the weekly jobless claims rose by a greater-than-expected 12,000 last week to 321,000, but remained at levels still pointing to a healthy labor market. The University of Michigan consumer sentiment index inched lower to 92.1 in late November from 92.3 earlier in the month and 93.6 in October. This reduced confidence also led to some weakness in the markets.
Shares of General Motors (NYSE: GM) closed down $1.52 or 4.7% to $31.09, on news that billionaire investor Kirk Kerkorian's Tracinda Corp. has cut its stake in the automaker to 7.4% from 9.9%. This is in the aftermath of lifting of the moratorium that had prevented Tracinda from trading the shares for 45 days.
Shares of Dell (NYSE: DELL) closed up $2.31 to $27.13, after reporting higher quarterly earnings that topped estimates on revenue that was just short of estimates. It reported net income of $677 million, up 12% from $606 million, last year. Its revenue rose 3.5% to $14.38 billion, up from $13.91 billion but slightly lower than the $14.44 billion expected by analysts. Gross margin climbed to 17% from 16.2% a year ago. However, the company called the results preliminary and subject to change as it faces an ongoing probe by federal securities regulators into its accounting practices.
Stock of Alcoa (NYSE: AA) closed up $1.24 or 4.2% to $30.43, after it unveiled a broad restructuring program. The company would cut its work force by about 10%, and lead to a spin-off of its molded soft-alloy business via a joint venture with Norway's Orkla ASA. Plant closures and consolidations in the U.S. and overseas will eliminate 6,700 Alcoa jobs over the next 12 months, with bulk of those in units that make parts for the auto industry. The downsizing aims to save the company $125 million pre-tax a year.
Stock of Merck (NYSE: MRK) closed up $0.15 to $44.37, after it was dealt a court victory when a federal judge denied a motion that would have allowed class-action status for injury and death cases involving Vioxx, the company's withdrawn painkiller. Judge Eldon Fallon of New Orleans, who is overseeing federal lawsuits involving Vioxx, denied a request by plaintiffs' attorneys for the class-action status.
Shares of International Business Machines Corp. (NYSE: IBM) rose 0.5% after it said the Defense Advanced Research Projects Agency has given it a four year, $244 million contract to develop a supercomputer that is more efficient and simpler to program.
U.S. light crude oil for January delivery closed down 90 cents to $59.27 a barrel on the New York Mercantile Exchange. This is due to the bearish inventory data from the American Petroleum Institute and the Energy Department.
Shares of General Motors (NYSE: GM) closed down $1.52 or 4.7% to $31.09, on news that billionaire investor Kirk Kerkorian's Tracinda Corp. has cut its stake in the automaker to 7.4% from 9.9%. This is in the aftermath of lifting of the moratorium that had prevented Tracinda from trading the shares for 45 days.
Shares of Dell (NYSE: DELL) closed up $2.31 to $27.13, after reporting higher quarterly earnings that topped estimates on revenue that was just short of estimates. It reported net income of $677 million, up 12% from $606 million, last year. Its revenue rose 3.5% to $14.38 billion, up from $13.91 billion but slightly lower than the $14.44 billion expected by analysts. Gross margin climbed to 17% from 16.2% a year ago. However, the company called the results preliminary and subject to change as it faces an ongoing probe by federal securities regulators into its accounting practices.
Stock of Alcoa (NYSE: AA) closed up $1.24 or 4.2% to $30.43, after it unveiled a broad restructuring program. The company would cut its work force by about 10%, and lead to a spin-off of its molded soft-alloy business via a joint venture with Norway's Orkla ASA. Plant closures and consolidations in the U.S. and overseas will eliminate 6,700 Alcoa jobs over the next 12 months, with bulk of those in units that make parts for the auto industry. The downsizing aims to save the company $125 million pre-tax a year.
Stock of Merck (NYSE: MRK) closed up $0.15 to $44.37, after it was dealt a court victory when a federal judge denied a motion that would have allowed class-action status for injury and death cases involving Vioxx, the company's withdrawn painkiller. Judge Eldon Fallon of New Orleans, who is overseeing federal lawsuits involving Vioxx, denied a request by plaintiffs' attorneys for the class-action status.
Stocks closed higher with gains by Alcoa Inc. (NYSE: AA), Caterpillar Inc. (NYSE: CAT) and Boeing Co. (NYSE: BA) supporting the Dow Jones Industrial Average and helping offset higher crude prices and light volumes ahead of Thursday's Thanksgiving holiday. The Nasdaq composite and S&P 500 managed to carve out fresh multi-year highs.
Today, the Dow Jones industrial average closed up 5.05 or 0.04% to 12,321.59, the broader S&P 500 index closed up 2.31 or 0.16% to 1,402.81, and the Nasdaq composite index closed up 2.12 or 0.09% to 2,454.84, its highest level since February 2001.
Market breadth was mixed. On the New York Stock Exchange, winners topped losers five to three on volume of 1.53 billion shares. On the Nasdaq, decliners and advancers were roughly even as almost 1.71 billion shares changed hands.
While the market appears overbought, investors continue to buy on little weakness aggressively. A correction or at least some consolidation may be expected in the near term. The market was concerned that the M&A activity did not spur a major rally. This is an indication that the market is now "screaming for relief". Additionally, Federal Reserve Board Governor Kevin Warsh said that inflation remains "uncomfortably elevated" even after coming off its worst levels from earlier this year. However, many opine that the benign October reports on consumer and producer prices, indicate that the Fed is done with raising interest rates.
Stocks will likely have more direction next week, as investors return from vacations and as retailers give fuller reports about Black Friday and the weekend. December should be another positive month for stocks, since the major underlying factors that have supported the advance since the summer are still in place.
Shares of Boeing Co. (NYSE: BA) closed up $1.98 to $91.10, after winning a $5.5 billion order for 25 planes from Korean Air Co. Additionally, former Boeing unit Spirit Aerosystems Holdings Inc. (NYSE: SPR) priced its IPO at $26 a share, above the $23 to $25 a range.
Stock of Verizon Communications (NYSE: VZ) closed up $0.46 or 1.3% to $35.13, after Credit Suisse First Boston upgraded it to "outperform" from "neutral". It believes that the company is setting itself up for earnings growth as dilution from its FiOS Internet service reaches its peak.
Stock of Google (Nasdaq: GOOG) closed up $14.60 or 3% to $509.65, as the search engine leader shot past $500 for the first time. The Internet search engine unveiled discounts for online shoppers who use its payment service during the holiday season.
Stock of Medtronic (NYSE: MDT) closed up $4.60 or 9.4% to $53.55, as it reported higher than expected quarterly earnings. Its quarterly profit beat expectations as it gained share from rivals in the market for implantable devices that manage irregular heart rhythms. Its second-quarter net earnings were $681 million, down from $817 million a year ago. However, excluding special items in both periods, it reported an EPS of 59 cents, compared with 52 cents last year. Second-quarter revenue rose 11% to about $3.08 billion. Sales of ICDs, rose 4% to $764 million. Revenue in the overall Cardiac Rhythm Disease Management business, which also includes pacemakers, rose 6% to $1.363 billion. The company said it expects an EPS for fiscal 2007 of $2.30 to $2.38, on revenue of $12.2 billion to $12.6 billion.
Maker of iPod, Apple (Nasdaq: AAPL) closed up $2.13 to $88.60 - at an all-time high as investors expressed optimism about the strength of the company's iPod sales in the crucial holiday period. There is also speculation that it is working on the launch of an Iphone that would combine the capability of its blockbuster Ipod media player with a phone.
U.S. light crude oil for January delivery rose $1.37 to settle at $60.17 a barrel on the New York Mercantile Exchange. The rise in price is owing to the news that Alyeska Pipeline Service Co. has cut flow in the 800-mile Trans-Alaska Pipeline to 25% of normal capacity as high winds stymied tanker loadings in Valdez, Alaska.
Maker of iPod, Apple (Nasdaq: AAPL) closed up $2.13 to $88.60 - at an all-time high as investors expressed optimism about the strength of the company's iPod sales in the crucial holiday period. There is also speculation that it is working on the launch of an Iphone that would combine the capability of its blockbuster Ipod media player with a phone.
Stock of Medtronic (NYSE: MDT) closed up $4.60 or 9.4% to $53.55, as it reported higher than expected quarterly earnings. Its quarterly profit beat expectations as it gained share from rivals in the market for implantable devices that manage irregular heart rhythms. Its second-quarter net earnings were $681 million, down from $817 million a year ago. However, excluding special items in both periods, it reported an EPS of 59 cents, compared with 52 cents last year. Second-quarter revenue rose 11% to about $3.08 billion. Sales of ICDs, rose 4% to $764 million. Revenue in the overall Cardiac Rhythm Disease Management business, which also includes pacemakers, rose 6% to $1.363 billion. The company said it expects an EPS for fiscal 2007 of $2.30 to $2.38, on revenue of $12.2 billion to $12.6 billion.
Stocks closed mixed with the Dow Jones Industrial Average snapping a six-day winning streak, as waning forward momentum led to selling pressure. A spate of mega-merger news, including Freeport-McMoRan Copper & Gold's (NYSE: FCX) $26 billion deal for Phelps Dodge Corp. (NYSE: PD), the Blackstone Group bid $20 billion to take Equity Office Properties Trust (NYSE: EOP), and many more kept the day interesting.
Today, the Dow Jones industrial average closed down 26.02 or 0.21% to 12,316.54, the broader S&P 500 index closed down 0.70 or 0.05% to 1,400.50, and the Nasdaq composite index closed up 6.86 or 0.28% to 2,452.72.
Market breadth was mixed. On the New York Stock Exchange, winners topped losers by a narrow margin on volume of 1.50 billion shares. On the Nasdaq, decliners and advancers were roughly 15 to 14 on volume of 1.72 billion shares.
Trade was muted as investors played it cautious ahead of a holiday-shortened trading week. However, the market was helped by the bevy of merger and acquisition news. While the deals did not move the market, they represent that Corporate America believes the economy is not heading for a recession and that you still have a growth story for 2007. While there is a lot of talk about the market being in an overbought condition, there are still people who are afraid of missing out on the rally. There's a lot of excess cash that people will want to put to work.
The session's one economic report was the index of leading economic indicators (LEI). LEI rose 0.2% in October after climbing an upwardly revised 0.4% in September. Economists had expected the LEI to rise 0.2%. This suggested the economy is still expanding at a slow pace.
Stock of Equity Office Properties Trust (NYSE: EOP) closed up $3.42 or 7.6% to $48.14, after it agreed to a $36 billion buy-out. This acquisition by Blackstone Group represents the largest deal ever for real estate investment trusts. The offer of $48.50 per share in cash - an 8.5% premium to the stock's last closing price - values the equity of the company at nearly $19 billion.
Shares of Phelps Dodge Corp. (NYSE: PD) closed up $25.45 or 27% to $120.47. Its acquisition by Freeport-McMoRan Copper & Gold (NYSE: FCX) will create the world's largest publicly traded copper producer. However, shares of Freeport closed down $1.77 or 3% to $55.63. Phelps Dodge will be bought for $25.9 billion in cash and stock.
Russian steelmaker Evraz will buy Oregon Steel Mills (Nasdaq: OS) closed in a $2.3 billion deal, creating the world's largest rail producer. Shares of Oregon Steel up $4.81 or 7% to $63.77. The offer is 22.3% above the weighted average stock price for the past three months. The combined company would produce 16.8 million tons a year of crude steel, placing it just outside the world's top 10, and will ship 17.4 million tons of steel products in 2006.
Shares of Bank of America (NYSE: BAC) closed up $0.05 to $54.90, after it declared that it was buying U.S. Trust - the private banking unit of Charles Schwab (Nasdaq: SCHW) for $3.3 billion. Shares of Charles Schwab closed up $0.38 or 2% to $18.94. This would vault Bank of America to the top tier of private banks.
U.S. light crude oil for January delivery fell 17 cents to $58.80 a barrel on the New York Mercantile Exchange.
Shares of Phelps Dodge Corp. (NYSE: PD) closed up $25.45 or 27% to $120.47. Its acquisition by Freeport-McMoRan Copper & Gold (NYSE: FCX) will create the world's largest publicly traded copper producer. However, shares of Freeport closed down $1.77 or 3% to $55.63. Phelps Dodge will be bought for $25.9 billion in cash and stock.
Russian steelmaker Evraz will buy Oregon Steel Mills (Nasdaq: OS) closed in a $2.3 billion deal, creating the world's largest rail producer. Shares of Oregon Steel up $4.81 or 7% to $63.77. The offer is 22.3% above the weighted average stock price for the past three months. The combined company would produce 16.8 million tons a year of crude steel, placing it just outside the world's top 10, and will ship 17.4 million tons of steel products in 2006.
Shares of Bank of America (NYSE: BAC) closed up $0.05 to $54.90, after it declared that it was buying U.S. Trust - the private banking unit of Charles Schwab (Nasdaq: SCHW) for $3.3 billion. Shares of Charles Schwab closed up $0.38 or 2% to $18.94. This would vault Bank of America to the top tier of private banks.
Stocks closed mixed as the Dow Jones Industrial Average extended its winning streak to a sixth session and set yet another record high, bolstered by a continued slide in crude-oil prices. The S&P 500 finished above 1,400 for the first time in more than six years.
Today, the Dow Jones industrial average closed up 36.74 or 0.30% to 12,342.56, the broader S&P 500 index closed up 1.44 or 0.10% to 1,401.20, and the tech-fueled Nasdaq composite index closed down 3.20 or 0.13% to 2,445.86. For the week, the Dow rose 1.9%, the S&P was up 1.5%, and the Nasdaq added 2.3%.
Market breadth was negative. On the New York Stock Exchange, decliners edged out advancers 17 to 15 on volume of about 1.698 billion shares. On the Nasdaq, losers topped winners by about 17 to 12 on volume of 1.772 billion shares.
A big drop in housing unnerved investors. However, the consumer sector got a boost from Altria (NYSE: MO) and falling oil prices. Housing starts slumped 14.6% in October to a 6-1/2 year low, while building permits fell to the lowest pace in 9 years. This was much larger than expected by Wall Street economists, who forecast a 4.5% drop in starts and a marginal drop in permits.
Stock of Altira (NYSE: MO) closed up $1.44 or 2% to $85.01, after a U.S. Appeals Court decided to grant a permanent stay in the class action suit against light cigarettes. The court has decided to review a lower court ruling that let a $200 billion lawsuit filed by "light" cigarette smokers.
Shares of Hewlett-Packard (NYSE: HPQ) closed down $0.36 to $39.77, despite reporting higher earnings and revenue that topped forecasts, and offered a bullish outlook for the current period. Its net income rose to $1.7 billion, up four-fold from the year-earlier period when the company took a hefty restructuring charge. Its sales rose 7% to $24.6 billion during the quarter, above the expected $24.1 billion.
Shares of Starbucks (Nasdaq: SBUX) closed down $2.01 or 5% to $37.42, after it reported lower profits and issued a sales and earnings forecast in a range that could miss analysts' expectations. Net income for the fiscal fourth quarter was $117.3 million, compared with $123.7 million a year ago. Total revenue jumped 20.7% to $2.003 billion but fell short of the forecast of $2.01 billion.
Stock of Johnson & Johnson (NYSE: JNJ) closed up $0.71 or 1% to $67.24, on announcing that it would buy Conor Medsystems for around $1.4 billion in cash. Shares of Conor closed up $5.16 or 19% to $32.68. It will pay $33.50 for each share of Conor that makes drug-eluting stents used to keep blocked arteries open.
Light, sweet crude oil for December delivery fell 45 cents to $55.81 a barrel on the New York Mercantile Exchange, after hitting a 17-month trading low of $55.08 earlier in the session.
Stock of Johnson & Johnson (NYSE: JNJ) closed up $0.71 or 1% to $67.24, on announcing that it would buy Conor Medsystems for around $1.4 billion in cash. Shares of Conor closed up $5.16 or 19% to $32.68. It will pay $33.50 for each share of Conor that makes drug-eluting stents used to keep blocked arteries open.
Shares of Starbucks (Nasdaq: SBUX) closed down $2.01 or 5% to $37.42, after it reported lower profits and issued a sales and earnings forecast in a range that could miss analysts' expectations. Net income for the fiscal fourth quarter was $117.3 million, compared with $123.7 million a year ago. Total revenue jumped 20.7% to $2.003 billion but fell short of the forecast of $2.01 billion.
Shares of Hewlett-Packard (NYSE: HPQ) closed down $0.36 to $39.77, despite reporting higher earnings and revenue that topped forecasts, and offered a bullish outlook for the current period. Its net income rose to $1.7 billion, up four-fold from the year-earlier period when the company took a hefty restructuring charge. Its sales rose 7% to $24.6 billion during the quarter, above the expected $24.1 billion.
Stock of Altira (NYSE: MO) closed up $1.44 or 2% to $85.01, after a U.S. Appeals Court decided to grant a permanent stay in the class action suit against light cigarettes. The court has decided to review a lower court ruling that let a $200 billion lawsuit filed by "light" cigarette smokers.
Stocks closed higher with the Dow Jones Industrial Average finishing at another record high level, as tame consumer-price inflation and a big drop in crude oil prices helped offset bad news from Applied Materials Inc. (Nasdaq: AMAT) and Dell Inc (NYSE: DELL).
Today, the Dow Jones industrial average closed up 54.11 or 0.44% to 12,305.82, ending at a record close for the 17th time since Oct. 3. The broader S&P 500 index closed up 3.19 or 0.23% to 1,399.76, ending at a new six-year high. The tech-fueled Nasdaq composite index closed up 6.31 or 0.26% to 2,449.06, ending at its highest point since February 2001.
Market breadth was mixed. On the New York Stock Exchange, winners beat losers by 17 to 15 on volume of 1.68 billion shares. On the Nasdaq, advancers barely edged decliners by 15 to 14 on 2.1 billion shares changed hands.
Lower oil and gas prices means less inflationary pressure. It also means more money stays in the hands of consumers. The day's read on inflation that gave investors hope for soft landing for the economy in coming months. The CPI fell 0.5% against the expected fall of 0.3%. The core CPI rose just 0.1%, against a forecast rise of 0.2%t. This showed that inflation pressures continue to abate and that the economic slowdown won't result in recession.
Chicago Fed President Michael Moskow said he sees the possibility of more tax increases to cool inflation, even though economic growth is likely to be below trend for the next year or so. St. Louis Fed President William Poole said that while inflation pressures are waning, they remain an issue.
Amongst economic news, U.S. industrial production rose 0.2% in October after dropping 0.6% in September, while capacity utilization rose to 82.2%. Both were roughly in line with economist expectations. The Philly Fed index rose to 5.1 from negative 0.7 in October and negative 0.4 in September. Economists expected an increase to 5.8. Any reading above zero indicates growth in the region's manufacturing sector. The new orders index, a gauge of future growth, fell to -3.7 in November from 13.4 in October.
Shares of Dell (NYSE: DELL) closed down $0.65 or 2.6% to $25.10, as it stated that it would delay filing its quarterly report until later in the month. It clarified that the delay was due to issues it's facing in preparing the results and not linked to an ongoing SEC probe into its accounting. Analysts expect the EPS to sink 38% to 24 cents and the revenue to edge higher by 4% to $14.4 billion.
Stock of Applied Materials (Nasdaq: AMAT) closed down $0.67 or 4% to $17.98, despite reporting higher quarterly earnings and revenue that was shy of forecasts. The company also warned that sales and earnings in the current quarter will miss forecasts. It expects an EPS of 26 to 27 cents against the expected EPS of 29 cents.
Shares of Pfizer Inc. (NYSE: PFE) rose 23 cents to $26.76. The company said results of a new analysis showed that patients who have heart disease and chronic kidney disease and took 80 mg Lipitor tablets reduced their risk of heart attack and stroke by 32% compared with patients taking a 10 mg dose.
U.S. light crude oil for December delivery tumbled $2.50 to settle at $56.26 a barrel on the New York Mercantile Exchange. This is the lowest point this year. While this was bad news for oil stocks, it was encouraging for the rest of the market.
Shares of Dell (NYSE: DELL) closed down $0.65 or 2.6% to $25.10, as it stated that it would delay filing its quarterly report until later in the month. It clarified that the delay was due to issues it's facing in preparing the results and not linked to an ongoing SEC probe into its accounting. Analysts expect the EPS to sink 38% to 24 cents and the revenue to edge higher by 4% to $14.4 billion.
Stock of Applied Materials (Nasdaq: AMAT) closed down $0.67 or 4% to $17.98, despite reporting higher quarterly earnings and revenue that was shy of forecasts. The company also warned that sales and earnings in the current quarter will miss forecasts. It expects an EPS of 26 to 27 cents against the expected EPS of 29 cents.
Stocks rose with the Dow Jones Industrial Average stretching to a fresh record close after surprising strength in a regional survey eased economic worries, with further help from news of a possible merger in the airline sector. Traders weighed the minutes of the latest Federal Reserve meeting on interest rates that showed central bankers were less worried about the housing market's impact on the economy and still had concerns about inflation. Investors welcomed further signs that the economy is slowing at a moderate pace, and not heading for recession.
Today, the Dow ones industrial average closed up 33.70 or 0.28% to 12,251.71, a record for the second straight session, and also hit a trading record during the session. The broader S&P 500 index closed up 3.35 or 0.24% to 1,396.57, and the tech-fueled Nasdaq composite index closed up 12.09 or 0.5% to 2,442.75, its highest close since Feb. 15, 2001.
Market breadth was positive. On the New York Stock Exchange, winners topped losers five to three on volume of almost 1.7 billion shares. On the Nasdaq, advancers topped decliners by 18 to 11 on volume of 2.16 billion shares.
Today's most-anticipated event was the afternoon release of the minutes from the October Fed meeting. The minutes reinforced that the economy is headed for "soft landing" and that the Fed remains focused on cutting inflation. However, the minutes also suggested the central bank is unlikely to cut interest rates anytime soon.
The reading on manufacturing in the New York region rose unexpectedly. This reinforced the belief that while the economy is slowing, it is not heading for a "hard landing." The Empire State index rose by about four points to a five-month high of 26.7. Economists had expected a decline to about 15.4 in November from 22.9 in October.
US Airways (NYSE: LCC) made a surprise cash and stock bid for larger rival Delta (OTC: DALRQ). Shares of US Air closed up $8.57 or 17% to $59.50, while shares of Delta climbed 3%. This bid could spark a round of mergers leaving the US with just a handful of major airlines. The proposal is for about $4 billion in cash and 78.5 million shares of US Airways stock, also worth $4 billion. US Air has also proposed keeping the Delta name if the merger is completed. The "new" Delta would be the number one airline across the Atlantic and the second largest airline to the Caribbean.
Stock of Google (Nasdaq: GOOG) closed up $2.63 to $491.93, after Credit Suisse resumed coverage of the web search leader with an "outperform" rating and price target of $600 a share.
Stock of Hewlett Packard (NYSE: HPQ) closed down $0.88 or over 2% to $39.79, day before it is due to report quarterly earnings. This year the share has risen 41% helped by turnaround efforts implemented by new CEO Mark Hurd. The company has steadily beat Wall Street's estimates and aims to keep up the winning streak when it reports fiscal fourth-quarter results after the market close tomorrow.
Shares of Pfizer Inc. (NYSE: PFE) rose 1% to close at $26.53, after it announced its animal health division is buying agricultural biotechnology company Embrex Inc. (NYSE: EMBX) for $155 million. Shares of Embrex rose $4.72 or 40% to close at $16.64. The buy out price of $17, represents a 43% premium to Embrex shares' closing level on Tuesday. Embrex posted revenue of $52.5 million in 2005, 37% of which came from outside of the U.S.
U.S. light crude oil for December delivery rose 48 cents to settle at $58.76 a barrel on the New York Mercantile Exchange. The price of oil rose after the weekly oil inventory report showed a surprisingly large drop in gasoline supplies and distillate stocks, used to make heating oil.
US Airways (NYSE: LCC) made a surprise cash and stock bid for larger rival Delta (OTC: DALRQ). Shares of US Air closed up $8.57 or 17% to $59.50, while shares of Delta climbed 3%. This bid could spark a round of mergers leaving the US with just a handful of major airlines. The proposal is for about $4 billion in cash and 78.5 million shares of US Airways stock, also worth $4 billion. US Air has also proposed keeping the Delta name if the merger is completed. The "new" Delta would be the number one airline across the Atlantic and the second largest airline to the Caribbean.
Shares of Pfizer Inc. (NYSE: PFE) rose 1% to close at $26.53, after it announced its animal health division is buying agricultural biotechnology company Embrex Inc. (NYSE: EMBX) for $155 million. Shares of Embrex rose $4.72 or 40% to close at $16.64. The buy out price of $17, represents a 43% premium to Embrex shares' closing level on Tuesday. Embrex posted revenue of $52.5 million in 2005, 37% of which came from outside of the U.S.
Stocks staged a late rally as gains for Wal-Mart Stores Inc. (NYSE: WMT), Home Depot Inc (NYSE: HD) and Intel Corp. (Nasdaq: INTC) boosted the Dow Jones Industrial Average to a fresh all-time high. Investors welcomed a tame PPI report although many are looking ahead to consumer-price data they hope will confirm the signs of an easing inflationary trend.
Today, the Dow closed up 86.13 or 0.71% to 12,218.01, closing at a record for the 15th time since early October, when it first knocked out its old all-time high from 2000, near the end of the 1990s tech boom. The broader S&P 500 index closed up 8.80 or 0.64% to 1,393.22, and the tech-fueled Nasdaq composite closed up 24.28 or 1.01% to 2,430.66, at its highest level since February 2001.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 2 to 1 on volume of around 1.71 billion shares. On the Nasdaq, advancers beat decliners by 4 to 3 on volume of 1.97 billion shares.
The PPI fell 1.6% in October, matching a record low set in October 2001. Excluding food and energy costs, the core PPI rate fell 0.9%, the biggest drop in over 13 years. Economists had been expecting the index to fall 0.5% and the core rate to rise 0.1%. This reinforced the view among some investors that the Federal Reserve has some leeway to cut interest rates in the first half of next year. Retail sales, fell 0.2% in October due to cheaper gasoline prices. Excluding autos, retail sales dropped 0.4%. Economists had expected a slightly larger 0.4% decline in October sales. U.S. business inventories rose 0.4% in September as sales dropped 2.0%. The report missed the expectations of economists, who were expecting inventories to rise by 0.6%
Investors can conclude from these reports that there is modest consumer spending and moderate core inflation. Things are moving in the way the Fed wants. Growth is slowing, but not slowing too rapidly and inflation pressures seem to be cooling. The reports are consistent with the Federal Reserve keeping interest rates steady.
Shares of Wal-Mart (NYSE: WMT) closed up $1.34 or 3% to $47.66, reported higher quarterly earnings that topped estimates. Strength in its international business and new store openings helped offset disappointing U.S. sales. Its net income rose to $2.65 billion or 11%, from $2.37 billion a year earlier. CEO Lee Scott was upbeat about the holiday season and vowed that the company would lure customers via deep discounting.
Stock of Target (NYSE: TGT) closed up $1.40 to $59.16, on reporting earnings that beat forecasts on sales that rose from a year ago and met forecasts. The company earned $506 million or 16%, up from $435 million in the same period a year earlier. Sales in the quarter grew 11.2% to $13.5 billion, up from $12.2 billion a year ago.
Shares of Home Depot (NYSE: HD) closed up $1.56 or 4.3% to $37.96, despite reporting quarterly earnings that slipped from a year earlier and missed analysts' projections, reflecting the impact of the slowdown in the housing market. It also cut its forecast for earnings and sales growth in the fiscal year. Its EPS was 73 cents against the expected 75 cents. Its total sales rose 11.3% to $23.1 billion against the expected $23.3 billion.
U.S. light crude oil for December delivery fell 30 cents to settle at $58.28 a barrel on the New York Mercantile Exchange. Traders weighed supply and demand considerations against a backdrop of mild weather in the Northeast.
Stock of Target (NYSE: TGT) closed up $1.40 to $59.16, on reporting earnings that beat forecasts on sales that rose from a year ago and met forecasts. The company earned $506 million or 16%, up from $435 million in the same period a year earlier. Sales in the quarter grew 11.2% to $13.5 billion, up from $12.2 billion a year ago.
Shares of Wal-Mart (NYSE: WMT) closed up $1.34 or 3% to $47.66, reported higher quarterly earnings that topped estimates. Strength in its international business and new store openings helped offset disappointing U.S. sales. Its net income rose to $2.65 billion or 11%, from $2.37 billion a year earlier. CEO Lee Scott was upbeat about the holiday season and vowed that the company would lure customers via deep discounting.
Stocks closed higher as concerns over slowing growth eased after a Fed official said the economy was growing "forcefully," with Intel Corp. (Nasdaq: INTC) a notable gainer after broker Citigroup (NYSE: C) upgraded the semiconductor sector. A decline in the price of oil further boosted market sentiment. Tech stocks rallied pushing the Nasdaq composite to its highest close in nearly six years.
Today, the Dow Jones industrial average closed up 23.45 or 0.19% to 12,131.88, the broader S&P 500 index closed up 3.52 or 0.25% to 1,384.42, and the tech-fueled Nasdaq composite closed up 16.66 or 0.70% to 2,406.38.
Market breadth was positive and volume was moderate. On the New York Stock Exchange, winners beat losers by 9 to 7 on volume of 1.41 billion shares. On the Nasdaq, advancers beat decliners nearly 17 to 12 on volume of 1.76 billion shares.
The market appears to be getting more comfortable with the Democratic win. They're looking forward to a strong Christmas and a good earnings season while oil continues to go down. Additionally, remarks from Dallas Fed President Richard Fisher that the U.S. economy is growing "forcefully" only serve to ratify investors' bullish sentiment. He said that the U.S. is a country with "enormous economic production" that is "growing forcefully" at this time. However, a lot of data is expected this week and this could prove to be a litmus test for the market.
Investors are looking for further signs that the economy, though slowing, is not headed for a so-called "hard landing." These signs shall be available through October retail sales, October producer price index, September business inventories, consumer prices (CPI), manufacturing and housing. Additionally, investors continue to bet that the Federal Reserve will begin cutting rates some time in the first half of next year and will be looking for this week's reports to support such beliefs. A jump in the week's inflation reports might raise worries that the Fed won't be able to cut rates as soon as had been hoped. Such concerns could spark a stock selloff.
Shares of Merck & Co. (NYSE: MRK) closed up 34 cents to $43.46, after the FDA said it needed more time to evaluate the safety of a diabetes drug from Switzerland's Novartis (NYSE: NVS). The oral diabetes drug, known as Galvus, would be a direct competitor for Merck's diabetes treatment Januvia, which received FDA approval last month.
Shares of Novartis (NYSE: NVS) fell 1.8% to $58.30, after reporting that the FDA required three more months to determine whether problems encountered by animals taking its oral diabetes drug Galvus may pose risks to humans. Galvus is a key drug in the Novartis pipeline, and is one of the new class of drugs, called DPP-IV, that are starting to hit the market. DPP-IV drugs enhance the body's ability to lower blood sugar.
Shares of Isis Pharmaceuticals Inc. (Nasdaq: ISIS) closed up $2.05 or 20% to $12.43, after two Phase II trials showed its cholesterol-lowering drug worked well to cut LDL, or so-called "bad" cholesterol. The data also showed that the drug had a "strong safety profile," and it was well-tolerated in both studies. Its study reported, patients with high cholesterol on stable doses of statins were treated with ISIS 301012 for five weeks. Patients who received 300 milligrams a week achieved a 51% reduction in LDL cholesterol, a 42% reduction in total cholesterol, and a 41% reduction in triglycerides beyond the levels achieved with statins alone.
Among Mergers and Acquisitions, shares of Hess Corp. (NYSE: HES) climbed up 0.5% to close at $45.24, after it agreed to partner with BHP Billiton (NYSE: BHP) and Repsol YPF (NYSE: REP) to buy the Genghis Khan oil and gas development for a total of $1.35 billion. Hess will pay $378 million for its 28% interest in the Gulf of Mexico development. Shares of Illumina Inc. (Nasdaq: ILMN) fell 11.6% to $38.93 after it agreed to buy Solexa Inc. (Nasdaq: SLXA), in a $600 million all-share deal. Shares of Solexa shot up 30%. Stock of Eddie Bauer Holdings (Nasdaq: EBHI) closed up 2% after it agreed to be acquired by Eddie B Holding Corp., a company owned by affiliates of Sun Capital Partners and Golden Gate Capital, for roughly $614 million, including debt assumption of $328 million.
U.S. light crude oil for December delivery sank $1.01 to settle at $58.58 a barrel on the New York Mercantile Exchange.
Shares of Merck & Co. (NYSE: MRK) closed up 34 cents to $43.46, after the FDA said it needed more time to evaluate the safety of a diabetes drug from Switzerland's Novartis (NYSE: NVS). The oral diabetes drug, known as Galvus, would be a direct competitor for Merck's diabetes treatment Januvia, which received FDA approval last month.
Shares of Novartis (NYSE: NVS) fell 1.8% to $58.30, after reporting that the FDA required three more months to determine whether problems encountered by animals taking its oral diabetes drug Galvus may pose risks to humans. Galvus is a key drug in the Novartis pipeline, and is one of the new class of drugs, called DPP-IV, that are starting to hit the market. DPP-IV drugs enhance the body's ability to lower blood sugar.
Shares of Isis Pharmaceuticals Inc. (Nasdaq: ISIS) closed up $2.05 or 20% to $12.43, after two Phase II trials showed its cholesterol-lowering drug worked well to cut LDL, or so-called "bad" cholesterol. The data also showed that the drug had a "strong safety profile," and it was well-tolerated in both studies. Its study reported, patients with high cholesterol on stable doses of statins were treated with ISIS 301012 for five weeks. Patients who received 300 milligrams a week achieved a 51% reduction in LDL cholesterol, a 42% reduction in total cholesterol, and a 41% reduction in triglycerides beyond the levels achieved with statins alone.
Stocks closed higher on the day and the week after strong financial results from American International Group (NYSE: AIG) and lower crude oil prices offset disappointment with Walt Disney's (NYSE: DIS) latest earnings report. Tech stocks rose while the broader market struggled at the end of an upbeat week on Wall Street. Investors also showed caution amid news of a new direction for Congress.
Today, the Dow Jones industrial average closed up 5.13 or 0.04% to 12,108.43, the broader S&P 500 index closed up 2.57 or 0.19% to 1,380.90, and the tech-fueled Nasdaq composite closed up 13.71 or 0.58% to 2,389.72. For the week the Dow rose 1%, the S&P 500 1.2%, and the Nasdaq Composite gained 2.5%.
Market breadth was positive. On the New York Stock Exchange, winners beat losers two to one on volume of 1.422 billion shares. On the Nasdaq, advancers topped decliners 17 to 11 on volume of 1.724 billion shares.
Investors see that the economy is continuing to grow at a respectable rate, corporations are delivering strong and better-than-expected profits, merger and acquisition are common place - all these are positives. The negative is that the market is trying to understand the implications of the Democratic win for legislation affecting the capital sector, therefore corporate profits and valuation. The overall market is essentially drifting at the moment as everyone adjusts to that new political environment, with investors taking a wait-and-see" attitude.
While the market has struggled a bit recently and may continue to do so next week, the trend should remain upward through the end of the year. Strong earnings and lower oil prices, among other factors, will help support that trend.
Shares of Boeing (NYSE: BA) rose 0.6% to $85.62, after the Air Force selected it to provide the U.S. military's next generation of combat search and rescue helicopters -- an order the company said is worth up to $10 billion. Under the contract, Boeing will deliver 145 of its HH-47 helicopters, including four test aircraft, through 2019, with the first aircraft slated for deployment by 2012. The new aircraft will gradually replace the military's existing fleet of HH-60G Hawk Combat Search and Rescue helicopters.
Stock of American International Group Inc. (NYSE: AIG) closed up $1.59 or 2.3% to $69.63, after reporting higher quarterly earnings and revenue that topped forecasts. Third-quarter net income came in at $4.22 billion, more than double its profit of $1.75 billion for same period last year. Its general-insurance division, which sells property and casualty insurance and reinsurance, reported a third-quarter operating profit of $2.6 billion, compared with an operating loss of $208 million a year ago.
Stock of Walt Disney (NYSE: DIS) closed down $1.18 or 3.5% to $32.40, despite reporting quarterly earnings and revenue that topped forecasts. Its fourth-quarter net income more than doubled, powered by strong box-office results and growth in its amusement parks and media networks. However, plans for increased capital spending in fiscal 2007 put a chill on investors. Its net income leaped to $782 million, on sales of $8.78 billion. Last year the figures were $379 million, on sales of $7.73 billion.
U.S. light crude oil for December delivery sank $1.57 to settle at $59.59 a barrel on the New York Mercantile Exchange. The IEA trimmed its 2006 global growth forecast, citing lower third-quarter demand for oil from China and industrialized countries in the Pacific Rim.
Shares of Boeing (NYSE: BA) rose 0.6% to $85.62, after the Air Force selected it to provide the U.S. military's next generation of combat search and rescue helicopters -- an order the company said is worth up to $10 billion. Under the contract, Boeing will deliver 145 of its HH-47 helicopters, including four test aircraft, through 2019, with the first aircraft slated for deployment by 2012. The new aircraft will gradually replace the military's existing fleet of HH-60G Hawk Combat Search and Rescue helicopters.
Stock of American International Group Inc. (NYSE: AIG) closed up $1.59 or 2.3% to $69.63, after reporting reported higher quarterly earnings and revenue that topped forecasts. Third-quarter net income came in at $4.22 billion, more than double its profit of $1.75 billion for same period last year. Its general-insurance division, which sells property and casualty insurance and reinsurance, reported a third-quarter operating profit of $2.6 billion, compared with an operating loss of $208 million a year ago.
Stock of Walt Disney (NYSE: DIS) closed down $1.18 or 3.5% to $32.40, despite reporting quarterly earnings and revenue that topped forecasts. Its fourth-quarter net income more than doubled, powered by strong box-office results and growth in its amusement parks and media networks. However, plans for increased capital spending in fiscal 2007 put a chill on investors. Its net income leaped to $782 million, on sales of $8.78 billion. Last year the figures were $379 million, on sales of $7.73 billion.
Stocks closed lower and snapped a three-session winning streak, felled by weaker than expected consumer sentiment data, higher crude prices and worries about how pharmaceutical and defense companies will fare under a Democratic party dominated Congress. Investors bailed out of drug, telecom and financial stocks, following confirmation that the Democratic Party will control all of Congress for the first time since 1994.
Today, the Dow Jones industrial average closed down 73.24 or 0.6% to 12,103.3, the broader S&P 500 index closed down 7.39 or 0.53% to 1,378.33, and the tech-fueled Nasdaq composite index closed down 8.93 or 0.37% to 2,376.01, after having risen through the early afternoon in response to Cisco's strong earnings.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 19 to 13 on volume of 1.857 billion shares. On the Nasdaq, decliners topped advancers two to one on volume of 2.419 billion shares.
The market was a little caught off guard by the Democrats not only winning the House, but winning it by such a large margin, let alone winning the Senate. This resulted in drug stocks getting punished on worries about legislation. Markets remained choppy as investors focused on the election, as well as corporate and economic news.
In economic news, the U.S. trade deficit narrowed by 6.8%, more than what analysts were expecting in September, due to lower oil prices and record exports. Imports outstripped exports by $64.3 billion, down from the revised $69.0 billion gap for August. Economists had forecast the gap to fall to $66.0 billion in September. The non-petroleum part of the trade gap declined, helped by strong U.S. exports which reached $123.2 billion in the month, up $554 million. The trade gap with China rose by another $1 billion in the month to just under $23 billion. Other data reports pointed to economic weakness. The University of Michigan's consumer sentiment report fell to 92.3 from 93.6 in October. The wholesale inventories reached their highest level relative to sales in over a year. Weekly jobless claims fell a greater-than-expected 20,000 to 308,000, reflecting strength in the labor market.
Shares Viacom (NYSE: VIA) closed down 3.3% at $38.37. The company reported a 16% decline in third-quarter earnings, but the results topped analyst forecasts. The company also announced the departure of its CFO. Its net income fell to $356.8 million, from $423.3 million in the year ago period. Revenue rose to $2.66 billion from $2.48 billion, against the expected $2.63 billion.
Shares of 3M Co. (NYSE: MMM) closed down 52 cents at $78.90. The company said that it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. Graceway Pharmaceuticals Inc. agreed to acquire 3M's pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB has agreed to acquire it in Europe for $857 million, and Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million. 3M expects to close the deals in the fourth quarter.
The star of the day, Cisco Systems (Nasdaq: CSCO) closed up $1.60 or 6.3% to $26.69, after reporting higher fiscal first quarter earnings and sales that topped estimates. The company also issued a bullish fiscal second quarter revenue outlook. Its first-quarter earnings rose 28% to $1.61 billion, from $1.26 billion a year earlier. Sales rose 25% to $8.18 billion. Revenue was boosted by acquisition of Scientific Atlanta, which contributed $584 million in quarterly sales.
Shares of Hewlett-Packard (NYSE: HPQ) rose after Goldman Sachs raised its earnings estimates and price target for the stock, ahead of what was expected to be strong fiscal fourth-quarter results. The stock gained 1.8% to $39.56.
U.S. light crude oil for December delivery rose $1.33 to $61.16 a barrel on the New York Mercantile Exchange. Natural-gas futures shot up nearly 4% on continued concerns over supply declines.
Shares of 3M Co. (NYSE: MMM) closed down 52 cents at $78.90. The company said that it would sell its global branded pharmaceutical business in three deals for a total $2.1 billion. Graceway Pharmaceuticals Inc. agreed to acquire 3M's pharmaceutical operations in the U.S., Canada, and Latin America for $875 million. Meda AB has agreed to acquire it in Europe for $857 million, and Ironbridge Capital and Archer Capital will buy the Asia-Pacific operations, including Australia and South Africa, for $349 million. 3M expects to close the deals in the fourth quarter.
The star of the day, Cisco Systems (Nasdaq: CSCO) closed up $1.60 or 6.3% to $26.69, after reporting higher fiscal first quarter earnings and sales that topped estimates. The company also issued a bullish fiscal second quarter revenue outlook. Its first-quarter earnings rose 28% to $1.61 billion, from $1.26 billion a year earlier. Sales rose 25% to $8.18 billion. Revenue was boosted by acquisition of Scientific Atlanta, which contributed $584 million in quarterly sales.
Stocks ended higher with the Dow Jones Industrial Average setting a new record close, after investors concluded that little market-moving legislation is likely to come out of the new Democratic party-controlled House of Representatives and a Senate whose leadership remains uncertain. The broader market also welcomed the resignation of Defense Secretary Donald Rumsfeld.
Today, the Dow Jones industrial average closed up 19.77 or 0.16% to 12,176.54, the broader S&P 500 index closed up 2.88 or 0.21% to 1,385.72, and the tech-fueled Nasdaq composite closed up 9.06 or 0.38% to 2,384.94. This is the highest level for the Nasdaq since February 2001.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 2 to 1 on volume of 1.688 billion shares. On the Nasdaq, advancers beat decliners 17 to 12 on volume of 2.126 billion shares.
While the Democrats have won a majority in the House of Representatives, the decision is too close to call in the Senate. Outcome of the cliffhanger race in Virginia will determine who gains control of the Senate. Although Democrats have won the House of Representatives, they are ideologically scattered, and therefore it would be difficult to form a single position on big issues. Stocks also drew strength from news of Rumsfeld's resignation, which President Bush discussed in an afternoon press conference at the White House. Bush said "the good news of the economy was overwhelmed by the toughness of this fight" in Iraq, as he nominated former CIA chief Robert Gates to replace Rumsfeld at the Pentagon.
It is clear that owing to internal divisions, we are not likely to get any market-moving legislation out of this Congress in the next two years. Any attempt to get market-moving legislation passed, such as something that impacts fiscal policy, may be faced by a veto. Therefore, investors need to focus on issues such as strong earnings, the belief that the economy is headed for a so-called "soft landing" and supportive Federal Reserve policy regarding interest rates.
Shares of mortgage-finance companies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) rose on expectations that Democrats will take a more conciliatory approach toward the two institutions. The companies hold about $1.5 trillion worth in mortgage-backed securities, a sum that Republicans have criticized for being too high and as potentially putting the financial system at risk. Fannie shares closed up almost 3%, while Freddie gained about 2%.
Shares of Merck (NYSE: MRK) closed down $1.56 or 3.4% to $44.34, as the company is facing $5.6 billion in tax liabilities related to accounting for past transactions.
Stem cell research companies rose on bets about the new Congress, including news that Missouri voters approved a measure guaranteeing federally-supported research and treatment in the state. Shares of StemCells (Nasdaq: STEM) closed up $0.32 to $3.39, and Geron (Nasdaq: GERN) gained $0.28 to $8.66.
Shares of Federated Department Stores Inc. (NYSE: FD) closed down 1.2% to $39.87 after posting quarterly results that fell shy of Wall Street expectations. The company reported a loss of $3 million, against a profit of $436 million last year. Results include $145 million in charges in efforts to turn May Co. stores, which it acquired last year, into Macy's as well as what the company called "related inventory valuation adjustments." However, sales climbed 6%, reaching $5.89 billion from $5.56 billion.
Shares of Sirius Satellite Radio Inc. (Nasdaq: SIRI) gained almost 1% to close at $4.12 after the company reported a narrower third-quarter loss and reiterated its forecast for 2006, as subscriber additions soared, especially among customers with Sirius-equipped cars and trucks who opted to take the service. The company lost $163 million, compared to $180.5 million a year earlier. Total revenue more than doubled to $167.1 million from $66.8 million.
U.S. light crude oil for December delivery rose 90 cents to settle at $59.83 a barrel on the New York Mercantile Exchange. The weekly inventory report showed a smaller-than-expected rise in crude supplies and as data showed that distillates, which includes winter heating oil, fell for a fifth week.
Shares of mortgage-finance companies Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) rose on expectations that Democrats will take a more conciliatory approach toward the two institutions. The companies hold about $1.5 trillion worth in mortgage-backed securities, a sum that Republicans have criticized for being too high and as potentially putting the financial system at risk. Fannie shares closed up almost 3%, while Freddie gained about 2%.
Shares of Federated Department Stores Inc. (NYSE: FD) closed down 1.2% to $39.87 after posting quarterly results that fell shy of Wall Street expectations. The company reported a loss of $3 million, against a profit of $436 million last year. Results include $145 million in charges in efforts to turn May Co. stores, which it acquired last year, into Macy's as well as what the company called "related inventory valuation adjustments." However, sales climbed 6%, reaching $5.89 billion from $5.56 billion.
Shares of Sirius Satellite Radio Inc. (Nasdaq: SIRI) gained almost 1% to close at $4.12 after the company reported a narrower third-quarter loss and reiterated its forecast for 2006, as subscriber additions soared, especially among customers with Sirius-equipped cars and trucks who opted to take the service. The company lost $163 million, compared to $180.5 million a year earlier. Total revenue more than doubled to $167.1 million from $66.8 million.
Stocks ended higher as investors awaited the outcome of mid-term congressional elections. Investors welcomed falling Treasury yields, lower oil prices, and Boeing Co. (NYSE: BA) surged more than 5% after the aerospace giant won an important aircraft order.
Today, the Dow Jones industrial average closed up 51.22 or 0.42% to 12,156.77, the broader S&P 500 index closed up 3.06 or 0.22% to 1,382.84, and the tech-fueled Nasdaq composite index closed up 9.93 or 0.42% to 2,375.88.
Market breadth was positive. On the New York Stock Exchange, winners topped losers nine to seven on volume of 1.6 billion shares. On the Nasdaq, advancers topped decliners by eight to seven on volume of 2.13 billion shares.
Traditionally, market tends to get nervous the week before any big event and then rally once it's over. Money appears to be pouring in this week in anticipation of the elections today. The general impression is that the election results won't sway things. As a result, investors are focusing on the positives that have fed the recent rally: strong corporate earnings, a belief the economy is headed for a "soft landing" and a Federal Reserve that's on hold for now - and possibly cutting rates later next year.
While the Democrats are likely to take control of the House from the Republicans, it is not clear as to which party is likely to control the Senate. Should the Democrats take both chambers of Congress, that might upset traditionally Republican Wall Street in the short term. Alternately, should the Republicans keep both houses, that might initially spark a rally. However, in the long term, stocks are likely to continue rising.
Shares of Boeing (NYSE: BA) closed up $4.37 or 5.4% to $84.85, after FedEx announced that it would buy 15 of the company's 777 Freighter aircraft and had cancelled its order for 10 Airbus aircraft due to delays in delivery. Stock of FedEx closed up $1.09 to $115.03
Shares of General Motors (NYSE: GM) closed down 0.2% at $34.62. The auto maker said in a SEC filing that it's revised its third-quarter net loss to $91 million, down $24 million from what it previously reported, due to additional loan sales that had not been previously reported by its financial arm.
Stock of Altera (Nasdaq: ALTR) closed up $0.88 to $19.32, after the chipmaker reported third-quarter earnings and revenue that rose from a year earlier and topped forecasts. The company also said fourth-quarter sales would fall from the third quarter, but investors focused on the strong earnings.
Shares of RealNetworks (Nasdaq: RNWK) closed up 9.8% to $11.91, after the digital-entertainment provider reported a surge in third-quarter profit based on strong demand for its games. Its quarterly profit nearly quadrupled, reaching $42.2 million, from $11.2 million last year. Sales grew 14% to $93.7 million, exceeding the $92.7 million average forecast by analysts.
Shares of Toll Brothers Inc. (NYSE: TOL) closed down $0.01 to $28.04, after the company warned that its revenue in the fiscal fourth quarter would fall more than expected and also said a recovery for the housing sector is not yet in sight. Beazer Homes USA Inc. (NYSE: BZH) climbed 0.3% to $42.07, despite reporting a 44% drop in fourth-quarter net income. Shares of WCI Communities Inc. (NYSE: WCI) closed down 6.5% to $16.26 after reporting a 73% plunge in third-quarter profit as revenue fell by nearly a third.
Shares of Nortel Networks (NYSE: NT) closed down $0.26 or 11% to $2.13, after the company reported a narrower quarterly loss that was nonetheless short of analysts' estimates on higher sales. The telecom gear maker also issued a mixed fourth-quarter outlook. Additionally, its board has approved a 1-for-10 reverse stock split to boost the nominal value of its shares. Its revenue rose 17% to $2.96 billion from $2.52 billion a year earlier, helped by higher sales of "next-generation" equipment to big phone companies as well as rising purchases by corporate customers.
U.S. light crude oil for December delivery fell $1.09 to settle at $58.93 a barrel on the New York Stock Exchange. The contract traded lower on expectations that domestic supply data for the latest week will show a buildup in crude inventories, but hints that more production cuts from the OPEC may be in the offing.
Shares of Nortel Networks (NYSE: NT) closed down $0.26 or 11% to $2.13, after the company reported a narrower quarterly loss that was nonetheless short of analysts' estimates on higher sales. The telecom gear maker also issued a mixed fourth-quarter outlook. Additionally, its board has approved a 1-for-10 reverse stock split to boost the nominal value of its shares. Its revenue rose 17% to $2.96 billion from $2.52 billion a year earlier, helped by higher sales of "next-generation" equipment to big phone companies as well as rising purchases by corporate customers.
Shares of RealNetworks (Nasdaq: RNWK) closed up 9.8% to $11.91, after the digital-entertainment provider reported a surge in third-quarter profit based on strong demand for its games. Its quarterly profit nearly quadrupled, reaching $42.2 million, from $11.2 million last year. Sales grew 14% to $93.7 million, exceeding the $92.7 million average forecast by analysts.
Shares of Boeing (NYSE: BA) closed up $4.37 or 5.4% to $84.85, after FedEx announced that it would buy 15 of the company's 777 Freighter aircraft and had cancelled its order for 10 Airbus aircraft due to delays in delivery. Stock of FedEx closed up $1.09 to $115.03
Shares of Four Seasons Hotels (NYSE: FS) closed up $18.63 or 29% to $82.50, after it received a $3.7 billion management led buyout offer. The offer is led by a group including shareholder Isadore Sharp and Triples Holdings Limited, Kingdom Hotels International, a company owned by a trust created by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Bill Gates' Cascade Investment LLC. The group would acquire the outstanding limited voting shares for $82 per share in cash. The board of Four Seasons has established a special committee of independent directors to consider the offer.
Stock of Abbott Laboratories (NYSE: ABT) closed down $0.17 or 0.4% to $47.47, after it stated that it will buy Kos Pharmaceuticals (Nasdaq: KOSP), for $3.7 billion. Shares of Kos closed up $26.97 or 54% to $77.06. Kos Pharmaceuticals is a developer of proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases.
Stock of McKesson (NYSE: MCK), a prescription drug distributor, closed up $1.17 or 2.4% to $49.69, after it said that it was buying Per-Se Technologies (Nasdaq: PSTI), a health administration company, for about $1.23 billion. Shares of Per Se closed up $3.10 or 12.7% to $27.55. Excluding items and the anticipated synergies, McKesson expects the transaction to be neutral to marginally dilutive to earnings in fiscal 2008 and accretive thereafter.
Stocks rallied to a sharply higher close and allowed the Dow to break a six-session losing streak. An upbeat Fed official's remarks and a $3.7 billion takeover offer for Four Season Hotels Inc. (NYSE: FS) lent cheer to the market. Additionally, there were a host of corporate deals and as investors geared up for Tuesday's congressional elections.
Today, the Dow Jones industrial average closed up 119.51 or 1% to 12,105.55, the broader S&P 500 index closed up 16.48 or 1.13% to 1,379.78, and the tech-fueled Nasdaq composite index closed up 39.04 or 1.51% to 2,365.95.
Market breadth was positive. On the New York Stock Exchange, winners beat losers three to one on volume of 1.523 billion shares. On the Nasdaq, advancers topped decliners by more than two to one as almost 1.931 billion shares changed hands.
Today's advance was sparked by a host of corporate news and reassuring morning comments from former Federal Reserve Chairman Alan Greenspan, who said the worst is over for the U.S. housing market. Some polls suggested that while the Democratic Party was likely to take control of the House of Representatives, it was not as likely to also take control of the Senate. This was comforting to investors, and the traditionally Republican Wall Street.
Chicago Federal Reserve Bank President Michael Moskow, said the U.S. economy should bounce back from the weak third quarter and average "somewhat below" a 3% real GDP growth rate over the next year. He attributed much of the slowdown in the July-September quarter to the weak housing sector, but noted that this only accounted for 5% of U.S. gross domestic product. However, he also said that more interest-rate hikes may be necessary to help keep inflation under control.
Shares of Four Seasons Hotels (NYSE: FS) closed up $18.63 or 29% to $82.50, after it received a $3.7 billion management led buyout offer. The offer is led by a group including shareholder Isadore Sharp and Triples Holdings Limited, Kingdom Hotels International, a company owned by a trust created by Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud, and Bill Gates' Cascade Investment LLC. The group would acquire the outstanding limited voting shares for $82 per share in cash. The board of Four Seasons has established a special committee of independent directors to consider the offer.
Stock of Abbott Laboratories (NYSE: ABT) closed down $0.17 or 0.4% to $47.47, after it stated that it will buy Kos Pharmaceuticals (Nasdaq: KOSP), for $3.7 billion. Shares of Kos closed up $26.97 or 54% to $77.06. Kos Pharmaceuticals is a developer of proprietary medications for the treatment of chronic cardiovascular, metabolic and respiratory diseases.
Shares of OSI Restaurants (NYSE: OST), closed up $7.32 or 23% to $39.75, after agreeing to a $3.2 billion buyout from a private equity group that includes its founders. Anadarko Petroleum Corp. (NYSE: APC), has agreed to sell its interests in and around two deep-water Gulf of Mexico discoveries and one prospect to Statoil (NYSE: STO) for $901 million. Kohlberg Kravis & Roberts and the private-equity arm of Goldman Sachs (NYSE: GS) has agreed to pay $4.6 billion for the forklift unit of Germany's Linde. Shares of Bema Gold Corp. (NYSE: BGO) rose 10.3% to $5.27 after Kinross Gold Corp. (NYSE: KGC) agreed to acquire the mining company in a $3.1 billion deal. Shares of Kinross slumped 9.4% to $12.01. Shares of Swift Transportation (Nasdaq: SWFT) closed up $5.79 or 24% to $29.84, after it received a $2.2 billion buyout offer from its largest shareholder and former CEO.
Stock of McKesson (NYSE: MCK), a prescription drug distributor, closed up $1.17 or 2.4% to $49.69, after it said that it was buying Per-Se Technologies (Nasdaq: PSTI), a health administration company, for about $1.23 billion. Shares of Per Se closed up $3.10 or 12.7% to $27.55. Excluding items and the anticipated synergies, McKesson expects the transaction to be neutral to marginally dilutive to earnings in fiscal 2008 and accretive thereafter.
U.S. light crude oil for December delivery gained 88 cents to settle at $60.02 a barrel on the New York Mercantile Exchange. OPEC has suggested that members may decide to impose further production cuts at its December meeting.
Stocks ended lower with the Dow Jones Industrial Average posting its first six-session losing streak since mid-2005, after a surge in long-term interest rates and a spike in oil prices overshadowed a largely positive October jobs report. A pair of strong economic reports and a steep decline in the bond market sparked bets that the Federal Reserve won't cut interest rates anytime soon.
Today, the Dow Jones industrial average closed down 32.5 or 0.27% to 11,986.04, the first time the index has fallen six times in a row since June 2005. The broader S&P 500 index closed down 3.04 or 0.22% to 1,364.22, and the tech-fueled Nasdaq composite index closed down 3.23 or 0.14% to 2,330.79. For the week, the Dow fell 0.9%, the S&P declined 0.9% and the Nasdaq Composite declined 0.8%.
Market breadth was mixed. On the New York Stock Exchange, losers topped winners 17 to 15 on volume of 1.51 billion shares. On the Nasdaq, advancers edged out decliners 17 to 12 on volume of 1.88 billion shares.
Stocks have been under pressure lately, with the Dow sliding for five sessions in a row in response to a spate of weaker economic reports. The employment report and the ISM services report marked the first group of upbeat economic news this week. The latest jobs report offered proof that the U.S. labor market is on a firmer footing than previously thought. Although the economy created a smaller-than-expected 92,000 jobs in October, upward revisions helped mitigate the impact of weak October number. Investors also cheered the fact that the unemployment rate dropped to 4.4%, the lowest level in more than 5 years. The jobless rate was expected to remain at 4.6%.
The Institute for Supply Management's services sector index rose to 57.1 in October from 52.9 in September, topping forecasts for a rise to 54.5. The report added credence to the feeling among investors that the economy is not as weak as had been thought. Within the report was good news on inflation. The price index slipped to 51.9% from 56.7% in the previous month.
Stock of Oracle Corp. (Nasdaq: ORCL) fell 2.7% to $17.78, as it announced its decision to buy software developer Stellent Inc. (Nasdaq: STEL) for $440 million. Shares of Stellent shot up 26% to $13.35. This bid is a 27% premium to Stellent's Thursday closing price of $10.62. Last month, Oracle had agreed to pay $219.2 million cash to acquire MetaSolv Software Inc. (Nasdaq: MSLV), a maker of specialty support products aimed at telecommunications providers.
Stock of Whole Foods Market Inc. (NYSE: WFMI) plunged $13.86 or 23% to $46.26 after the supermarket chain warned that its annual growth next year will slow to 6% to 8%, down from 11% this year. Its fourth-quarter net income rose to $39.8 million, from $9.06 million last year. Revenue rose to $1.29 billion from $1.12 billion, while same-store sales rose 8.6%. This is against the expected revenue of $1.32 billion.
Stock of Qualcomm Inc. (Nasdaq: QCOM) closed up $0.11 to $36.47, after reporting fourth-quarter earnings and sales that rose from a year ago and topped estimates. The company posted a 14% jump in quarterly net income as it sold more of its cell-phone chip technology. It had an income of $614 million, versus $538 million last year. Sales rose 28% to $2 billion for the three month period ended Sept. 24. Qualcomm derives licensing revenue on each phone sale and computer chips that power handsets based on CDMA technology. There are 402 million subscribers worldwide using third generation CDMA-based networks versus 273 million at the same time last year.
Shares of Electronic Arts Inc. (Nasdaq: ERTS) closed up $6.26 or 12% to $59.26, after the video game maker reported higher quarterly earnings and revenue that beat estimates and also boosted its full-year sales forecasts. Sales in the latest quarter rose 16% to $784 million, well above the $673 million expected by analysts. Its Madden NFL '07 and NCAA Football '07 saw record sales, with the former selling five million titles in five weeks.
U.S. light crude oil for December delivery gained $1.26 to settle at $59.14 a barrel on the New York Stock Exchange. Crude futures ended sharply higher amid political worries about the Middle East and Nigeria. Syria and the Lebanese group Hezbollah rejected U.S. accusations that they are planning to topple the Lebanese government with help from Iran. In Nigeria the U.S. embassy warned that attacks by a militant group on as many as 20 oil facilities may unfold within days.
Stock of Oracle Corp. (Nasdaq: ORCL) fell 2.7% to $17.78, as it announced its decision to buy software developer Stellent Inc. (Nasdaq: STEL) for $440 million. Shares of Stellent shot up 26% to $13.35. This bid is a 27% premium to Stellent's Thursday closing price of $10.62. Last month, Oracle had agreed to pay $219.2 million cash to acquire MetaSolv Software Inc. (Nasdaq: MSLV), a maker of specialty support products aimed at telecommunications providers.
Stock of Qualcomm Inc. (Nasdaq: QCOM) closed up $0.11 to $36.47, after reporting fourth-quarter earnings and sales that rose from a year ago and topped estimates. The company posted a 14% jump in quarterly net income as it sold more of its cell-phone chip technology. It had an income of $614 million, versus $538 million last year. Sales rose 28% to $2 billion for the three month period ended Sept. 24. Qualcomm derives licensing revenue on each phone sale and computer chips that power handsets based on CDMA technology. There are 402 million subscribers worldwide using third generation CDMA-based networks versus 273 million at the same time last year.
Shares of Electronic Arts Inc. (Nasdaq: ERTS) closed up $6.26 or 12% to $59.26, after the video game maker reported higher quarterly earnings and revenue that beat estimates and also boosted its full-year sales forecasts. Sales in the latest quarter rose 16% to $784 million, well above the $673 million expected by analysts. Its Madden NFL '07 and NCAA Football '07 saw record sales, with the former selling five million titles in five weeks.
Stocks ended lower with the Dow Jones Industrial Average taking its fifth loss in a row, hurt by data showing a pick-up in wage inflation and a rise in jobless claims. The Dow industrials have not had a five-session loss since June, 2005. The market was further hurt by Wal-Mart Stores Inc. (NYSE: WMT) and a broker downgrade for Intel Corp. (Nasdaq: INTC) Jitters about Friday's big employment release continue to plague the market.
Toady, the Dow Jones industrial average closed down 12.48 or 0.1% to 12,018.54, the broader S&P 500 index closed down 0.47 or 0.03% to 1,367.34, and the tech-fueled Nasdaq composite index closed down 0.33 or 0.01% to 2,334.02.
Market breadth was negative. On the New York Stock Exchange, losers topped winners by almost 9 to 7 on volume of 1.67 billion shares. On the Nasdaq, decliners beat advancers 17 to 12 on volume of 1.93 billion shares.
A sluggish reading on factory orders, a jump in a key inflation reading and some disappointing retail sales led the markets South. The focus for many investors has shifted from third-quarter earnings to the economic news. Therefore, tomorrows October employment report will be the next potential market catalyst. Employers are expected to have added 125,000 jobs, and the unemployment rate is expected to hold steady at 4.6%.
A preliminary read on third-quarter productivity came in unchanged, versus forecasts for a rise of 1.1%. This was a cause for concern for those investors worried about inflationary pressures. Another report showed September factory orders rose 2.1% against the expected 3.6%.
Dallas Federal Bank President Richard Fisher, said that recent inflation readings have been encouraging, but pricing pressure is still too aggressive. He is more upbeat on the inflation outlook, stating that it is possible that the trend in overall consumer inflation has peaked and is finally heading lower.
Intel (Nasdaq: INTC) fell after Merrill Lynch downgraded the chipmaker to neutral from buy. The broker said weakening demand for its products and persistent excess capacity are likely to "keep a lid" on the stock for the intermediate term. Currently, the broker sees limited money-making opportunity for the intermediate term.
Shares of Wal-Mart (NYSE: WMT) closed down $0.56 to $48.29, after stating that same-store sales, rose just 0.5% this month. That was lower than the recently reduced forecast for growth of 1%. Stock of rival Target (NYSE: TGT) also closed down $0.74 or 1.3% to $56.96, after reporting a 3.9% rise in same-store sales.
Shares of Dell Inc. (NYSE: DELL) closed up $0.78 or 3.1% to $24.77 after Goldman Sachs upgraded the computer maker to neutral from sell, saying it expects the company to achieve above-consensus earnings thanks to more disciplined pricing and more attention to its product mix.
Stock of the Tribune Co. (NYSE: TRB) closed down 1.1% to $32.26, after a Wall Street Journal reported that the publishing group is considering selling parts of its business after receiving lower-than-expected offers for its entire media and entertainment empire. However, the move may be a gambit to obtain a better price for the entire company.
U.S. light crude oil for December delivery fell 83 cents to settle at $57.88 a barrel on the New York Mercantile Exchange. Traders continued to react to Wednesday's domestic supply data showing a rise in crude inventories.
Intel (Nasdaq: INTC) fell after Merrill Lynch downgraded the chipmaker to neutral from buy. The broker said weakening demand for its products and persistent excess capacity are likely to "keep a lid" on the stock for the intermediate term. Currently, the broker sees limited money-making opportunity for the intermediate term.
Stock of the Tribune Co. (NYSE: TRB) closed down 1.1% to $32.26, after a Wall Street Journal reported that the publishing group is considering selling parts of its business after receiving lower-than-expected offers for its entire media and entertainment empire. However, the move may be a gambit to obtain a better price for the entire company.
Stocks fell today and sent the Dow Jones Industrial Average to its fourth consecutive loss, after a pair of weak economic reports sparked worries about the speed of the economic slowdown, giving investors a reason to retreat from the recent rally. Although strong earnings from MasterCard (NYSE: MA) and Burger King (NYSE: BKC) minimized the gloom, the market also focused on a multibillion-dollar merger between CVS Corp. (NYSE: CVS) and Caremark Rx Inc. (NYSE: CMX).
Today, the Dow Jones industrial average closed down 49.71 or 0.41% to 12,031.02, the broader S&P 500 index closed down 10.13 or 0.74% to 1,367.81, and the tech-fueled Nasdaq composite closed down 32.36 or 1.37% to 2,334.35.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by 21 to 11 on volume of 1.797 billion shares. On the Nasdaq, decliners trounced advancers 22 to 7 on volume of 2.076 billion shares.
Stocks lost steam following the release of the morning economic reports, including the weak ISM manufacturing report for October. The ISM index fell to 51.2% from 52.9% in September, the lowest level since June 2003 and an unexpected decline. All the numbers pointed toward a weaker economy, and now investors are saying they're concerned about a slowing economy.
A gauge of future home buying fell 1.1% in September, a signal that sales will be roughly flat for the next few months. The pending home sales index fell 1.1% in September after a 4.7% increase in August. Outlays on U.S. construction projects fell 0.3% in September, led by drops in spending on private residential construction and federal building projects. Private residential construction spending fell 1.1% in September after declining by 1.6% in August.
CVS Corp. (NYSE: CVS) reached an agreement to acquire Caremark Rx Inc. (NYSE: CMX) for $20.8 billion in stock. Shares of CVS closed down $2.32 or 7.4% to $29.06, and that of Caremark closed down $1.06 or 2.2% to $48.17. This move comes in the wake of Wal-Mart Stores Inc.'s (NYSE: WMT) move to slash prices on certain generic drugs.
Shares of Time Warner (Nasdaq: TWTC) closed down $0.24 or 1.2% to $19.77, after reporting quarterly sales and earnings that rose from a year earlier, but were shy of forecasts. The company reported revenue of $10.9 billion, up 7% from a year ago, against the expected $11.1 billion. It reported an EPS of 19 cents, up 12% from last year. Its revenue declined due to the ongoing loss of dialup-access customers.
Shares of MasterCard Inc. (NYSE: MA) closed up $10.97 or 14.8% to $85.07 after third-quarter net income powered past Wall Street estimates with an 82% rise. This was the company's first full quarterly earnings report since its IPO in May.
Stock of Gramin closed down $8.43 or over 15% to $44.98, after reporting quarterly revenue that rose from a year earlier, but missed analysts' expectations. The company also reported higher quarterly earnings that met estimates.
Shares of Burger King (NYSE: BKC) rose 6.7% to $17.90 after it reported a better than 80% jump in fiscal first-quarter profit thanks to better margins, lower taxes and more new restaurant openings. The company reported that it earned $40 million, up from $22 million last year. Revenue increased 7% to $546 million with worldwide sales growth of 2.4%.Analyst had expected a revenue of $538.1 million.
U.S. light crude oil for December delivery fell 2 cents to settle at $58.71 a barrel on the New York Mercantile Exchange. The latest weekly supply data confirmed trader expectations of an increase in crude inventories and a decline in stocks of petroleum products.
CVS Corp. (NYSE: CVS) reached an agreement to acquire Caremark Rx Inc. (NYSE: CMX) for $20.8 billion in stock. Shares of CVS closed down $2.32 or 7.4% to $29.06, and that of Caremark closed down $1.06 or 2.2% to $48.17. This move comes in the wake of Wal-Mart Stores Inc.'s (NYSE: WMT) move to slash prices on certain generic drugs.
Shares of MasterCard Inc. (NYSE: MA) closed up $10.97 or 14.8% to $85.07 after third-quarter net income powered past Wall Street estimates with an 82% rise. This was the company's first full quarterly earnings report since its IPO in May.
Shares of Burger King (NYSE: BKC) rose 6.7% to $17.90 after it reported a better than 80% jump in fiscal first-quarter profit thanks to better margins, lower taxes and more new restaurant openings. The company reported that it earned $40 million, up from $22 million last year. Revenue increased 7% to $546 million with worldwide sales growth of 2.4%.Analyst had expected a revenue of $538.1 million.
|
|
|
|
| |
| |
| |
| |
| |
|
Disclaimer: This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
|
|
