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« October 2006 |
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| 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.
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