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« January 2007 |
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| March 2007 »
Stocks rallied and rebound from their biggest one-day point drop in over five years in the previous session, although the major averages all closed lower on the month. Investors found comfort in a partial recovery of the Shanghai stock market, and soothing words from Federal Reserve Chairman Ben Bernanke.
Today, the Dow industrials closed up 52.39 or 0.46% to 12,268.63, the broader S&P 500 closed up 7.78 or 0.53% to 1,406.82, and the Nasdaq closed up 8.27 or 0.34% to 2,416.13. For the month, the Dow finished down 2.8%, the S&P 500 lost 2.2% and the Nasdaq declined 1.9%.
Market breadth was positive. On the New York Stock Exchange, winners topped losers by a margin of 22 to 11 on volume of 2.246 billion shares. On the Nasdaq, advancers beat decliners by a margin of 16 to 13 as 2.638 billion shares changed hands.
Bernanke calmed investors after he informed a House Panel that while there was no single trigger to Tuesday's market slide, financial markets "seem to be working well." He said that the economy may strengthen later this year, that there was no liquidity problem in financial markets, and that troubles from the sub-prime mortgage markets are not impacting the broader economy. He reiterated that the sell-off hasn't altered the Fed's view on U.S. economic growth.
Yesterday’s decline of 3.3% tells investors that stocks historically go through extremely rough periods, and that those perilous interludes usually follow strong markets that push prices to the limit. The underlying sentiment still seems to be bullish, but now that the upward trend has been broken, it's made investors put the thinking cap on.
On the economic front, new home sales fell 16% in January. New homes sold at an annual rate of 937,000, against the expected 1.08 million pace. The percentage decline was biggest for a single month in 13 years, since the record 23.8%t decline seen in January 1994.
Shares of Home Depot (NYSE: HD) dropped 0.6% after saying the housing market won't get better until the second half of 2007 or early 2008. Its forecasts found echo in a report showing that new homes sales plunged 16.6% in January to their lowest sales pace in four years. It was the lowest sales pace in four years and represented the biggest percentage decline in 13 years. Sales were down 20.1% compared with January 2006.
Stock of Apple Inc. (Nasdaq: AAPL) shares rose after the CEO Tim Cook reiterated that the company remains on track to release its iPhone mobile-phone product in June, and that Apple expects to sell 10 million of the devices in 2008.
Integra LifeSciences (NYSE: IART) said fourth-quarter net income slipped to $10.1 million, from $10.6 million, while revenue climbed 72% to $125 million on sales of acquired products, surgical instruments and ultrasonic surgical systems. Analysts expected a revenue of $121 million. For 2007, revenue is seen to be between $508 million and $520 million.
U.S. light crude oil for April delivery rose 33 cents to settle at $61.79 a barrel on the New York Mercantile Exchange.
Stocks plunged to their worst one-day performance since 2001, with the Dow Jones Industrial Average losing 200 points in one minute around 3 p.m. before recovering some ground by the close, after a sell-off in China fueled concerns about growth. Stocks tumbled across the board, after declining global markets and a steep drop in durable goods orders triggered a massive sell-off on Wall Street. Trying to limit the declines, the NYSE said it imposed trading curbs as of 1:03 p.m. ET, around the time the Dow slipped 200 points.
Today, the Dow Jones industrial average closed down 416.02 or 3.29% to 12,216.24, its biggest one-day point loss since the day the stock market reopened after the Sept. 11th attacks. The blue-chip barometer has now fallen for five sessions straight. The broader S&P 500 closed down 50.33 or 3.47% to 1,399.04, and saw its biggest one-day percentage loss in nearly four years. The S&P 500 also slumped for the previous four sessions. The Nasdaq closed down 96.65 or 3.86% to 2,407.87, its biggest one-day percentage loss since Dec. 9, 2002.
Market breadth was negative On the New York Stock Exchange, decliners trounced advancers by almost 29 to 4 on volume of 2.31 billion shares. On the Nasdaq, losers beat winners by more than 14 to 1 on volume of 3.05 billion shares.
Global mayhem started with the Chinese stocks slipping 9% - the worst one-day sell-off in a decade - on concerns that the government would interfere to cool the speculation that drove the Shanghai market up nearly 130% last year. Other Asian markets slumped in tandem, and European shares followed.
The sell-off demonstrates the inter-connectedness of stock markets around the world. The slump in world markets exacerbated concerns that Wall Street is due for a sell-off after a nearly eight-month rally that has sent the Dow industrials to record highs and the Nasdaq and S&P 500 to more than 6-year highs. Market veterans have been looking for a stock sell-off for some months due to the combination of slowing economic and earnings growth expected this year.
Amongst economic news, the existing home sales grew at a faster-than-expected pace in January, and the consumer confidence saw a surprise rise in February versus forecasts for a drop. Orders for durable goods sank a much sharper-than-expected 7.8% in January as non-defense goods orders saw their biggest monthly decline ever. Economists had forecast that orders for durable goods would fall 2.5%.
Stock of Wal-Mart Stores Inc (NYSE: WMT). fell 3.6% after it agreed to acquire 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. The world's largest retailer has reportedly agreed to pay around $1 billion for the stake. Taking full control of Trust-Mart would more than double Wal-Mart's retail footprint in China, where it currently operates 68 Super-centers, three Sam's Clubs, and two Neighborhood Markets in 36 cities.
Stock of Apple Computers (Nasdaq: AAPL) closed at $88.65, after declining that its Apple TV will be delayed until mid-March. A company spokeswoman said that Apple Inc. will delay until mid-March its Apple TV device for playing computer-based video on television sets. Apple, in early January said it would launch in February the $299 Apple TV, which wirelessly links computers to televisions.
U.S. light crude oil for April delivery rose 41 cents to $61.80 a barrel on the New York Mercantile Exchange. The price of oil rose for the last four sessions.
Stock of Wal-Mart Stores Inc (NYSE: WMT). fell 3.6% after it agreed to acquire 35% of Trust-Mart, a Taiwanese-owned operator of hypermarkets in China. The world's largest retailer has reportedly agreed to pay around $1 billion for the stake. Taking full control of Trust-Mart would more than double Wal-Mart's retail footprint in China, where it currently operates 68 Super-centers, three Sam's Clubs, and two Neighborhood Markets in 36 cities.
Stocks fell as concerns about growth resurfaced with oil prices holding above $61 a barrel, dampening investor enthusiasm and offsetting the latest deal-making news, including the $45 billion takeover of TXU Corp (NYSE: TXU). Blue chips fell for the fourth session in a row, as investors opted to bail out of a variety of sectors.
Today, the Dow Jones industrial average closed down 15.22 or 0.12% to 12,632.26, declining for the fourth session in a row, the S&P 500 closed down 1.82 or 0.13% to 1,449.37, and the Nasdaq closed down 10.58 or 0.42% to 2,504.52.
Market breadth was negative. On the New York Stock Exchange, losers and winners were roughly even on volume of 1.56 billion shares. On the Nasdaq, decliners beat advancers 17 to 12 on volume of 1.90 billion shares.
The rise in oil and gold prices kept inflationary concerns up front. Additionally, the weakness in the broader financial sector added to last week's worries about sub-prime lenders. The market also received a jolt after news that former Federal Reserve chairman Alan Greenspan warned that the U.S. economy might slip into recession this year.
Over the next few days, investors will be sorting through the bevy of economic news that is on tap, including reports due tomorrow on durable goods orders, consumer confidence and existing home sales.
Stock of Texas utility (NYSE: TXU) closed up $7.91 or 13% to $67.93, after agreeing to a $45 billion cash and debt buyout led by two private equity firms and the private equity unit of investment bank Goldman Sachs. This is the largest private equity buyout in history. The group will pay $69.25 a share for the company, a premium of 15.4% over Friday's close. The cash component of the deal is valued at $32.3 billion.
Shares of Station Casinos (NYSE: STN) closed up $3.20 or 4.2% to $86.50, after agreeing to be taken private for $5.4 billion by a firm led by its management. The total transaction is valued at approximately $8.8 billion, including a $3.4 million debt. FCP has agreed to pay $90 per share in cash, which marks a 30% premium over Station's closing stock price on Dec. 1.
Shares of XM Satellite Radio Inc. (Nasdaq: XMSR) fell 1% to close at $14.93, after its fourth-quarter loss narrowed from a year ago as revenue rose 45% and subscription acquisition costs declined. The company agreed last week to a $13.6 billion merger with Sirius Satellite Radio Inc. (Nasdaq: SIRI), a deal expected to face close regulatory scrutiny and potentially have trouble winning approval.
U.S. light crude oil for April delivery rose 25 cents to settle at $61.39 a barrel on the New York Mercantile Exchange.
Shares of Station Casinos (NYSE: STN) closed up $3.20 or 4.2% to $86.50, after agreeing to be taken private for $5.4 billion by a firm led by its management. The total transaction is valued at approximately $8.8 billion, including a $3.4 million debt. FCP has agreed to pay $90 per share in cash, which marks a 30% premium over Station's closing stock price on Dec. 1.
Stock of Texas utility (NYSE: TXU) closed up $7.91 or 13% to $67.93, after agreeing to a $45 billion cash and debt buyout led by two private equity firms and the private equity unit of investment bank Goldman Sachs. This is the largest private equity buyout in history. The group will pay $69.25 a share for the company, a premium of 15.4% over Friday's close. The cash component of the deal is valued at $32.3 billion.
U.S. stocks closed lower, putting in a mixed performance for the week, amid heightened jitters about the sub-prime mortgage market, rising oil prices and a court ruling against Microsoft Corp (Nasdaq: MSFT). Investors are displaying signs of stress and fatigue and they're locking in profits as they become more concerned about the market being at high levels. The Dow Jones industrial average down for the third straight session, as investors focused on higher oil and gold prices.
Today, the Dow closed down 38.54 or 0.30% to 12,647.48, the broader S&P 500 closed down 5.19 or 0.36% to 1,451.19, and the tech-heavy Nasdaq closed down 9.84 or 0.39% to 2,515.10. For the week, the Dow fell 0.9%, the S&P 500 was down 0.3% and the Nasdaq gained 0.7%. But for the month, the Dow, S&P and Nasdaq are all on track to end slightly higher.
Market breadth was negative. On the New York Stock Exchange, losers edged out winners on volume of 1.4 billion shares. On the Nasdaq, decliners topped advancers by a margin of 9 to 7 on volume of 2.1 billion shares.
Higher oil prices lead to a decline in blue chip stocks. The geopolitical unrest in the Middle East added fuel to fire. In the absence of any economic news, and with oil and gold prices continuing to move higher, investors are becoming a little skittish.
Stock of Microsoft (Nasdaq: MSFT) closed down $0.49 or 1.5% to $28.90, after a U.S. federal jury ruled that the software leader infringed on audio patents held by Alcatel-Lucent (NYSE: ALA) and should pay $1.52 billion in damages. Microsoft plans to seek relief on the verdict from the trial court, as the verdict is unsupported by the law or facts. Shares of Alcatel-Lucent closed up $0.21 to $13.28.
Shares of Lowe's (NYSE: LOW) closed up $1.30 to $34.93, after reporting lower fourth-quarter earnings that nonetheless topped estimates and also issuing a first-quarter and full-year forecast that is in line with analysts' estimates. It reported a 11.5% drop in fourth-quarter earnings as the battered U.S. housing market hurt sales. Total sales fell about 4% to $10.4 billion in the quarter, better than analyst estimates, while sales at stores open at least a year declined 5.3%.
Shares of Yum Brand (NYSE: YUM) closed down $0.55 or 1% to $60.51, after a pack of rats were seen scurrying around a closed KFC/Taco Bell restaurant in New York City. The restaurant had been cited in December for a number of health code violations, including evidence of rodents and live cockroaches.
U.S. light crude oil for April delivery rose 19 cents to $61.14 a barrel on the New York Mercantile Exchange, giving back bigger gains. This was after the United States reported an unexpected drop in gasoline stocks and Iran said it would show "no weakness" regarding its nuclear program.
Shares of Lowe's (NYSE: LOW) closed up $1.30 to $34.93, after reporting lower fourth-quarter earnings that nonetheless topped estimates and also issuing a first-quarter and full-year forecast that is in line with analysts' estimates. It reported a 11.5% drop in fourth-quarter earnings as the battered U.S. housing market hurt sales. Total sales fell about 4% to $10.4 billion in the quarter, better than analyst estimates, while sales at stores open at least a year declined 5.3%.
Shares of Yum Brand (NYSE: YUM) closed down $0.55 or 1% to $60.51, after a pack of rats were seen scurrying around a closed KFC/Taco Bell restaurant in New York City. The restaurant had been cited in December for a number of health code violations, including evidence of rodents and live cockroaches.
Stocks closed mixed with the broad market weighed down after the United Nations' nuclear watchdog said Iran had failed to meet a deadline to stop nuclear enrichment, but with tech shares making a late comeback on upbeat news for several stocks. The Dow Jones industrial average slumped for a second session, amid rising oil prices, and a jump in Treasury bond yields.
Today, the Dow Jones industrial average closed down 52.39 or 0.41% to 12,686.02, while the broader S&P 500 closed down 1.25 or 0.09% to 1,456.38. The Nasdaq closed up 6.52 or 0.26% to 2,524.94, at a fresh six-year high for the third session in a row.
Market breadth was mixed. On the New York Stock Exchange, losers beat winners 17 to 14 on volume of 1.47 billion shares. On the Nasdaq, advancers topped decliners 16 to 13 on volume of 2.04 billion shares.
Technology shares rose, thanks to upbeat earnings from chip maker Analog Devices (NYSE: ADI) and the end of Cisco (Nasdaq: CSCO) and Apple's (Nasdaq: AAPL) trademark dispute. A merger in the grocery sector had added to the market's early strength. However, stocks were pressured by rising oil prices amid a surprise dip in weekly energy inventories and a U.N. report that Iran has missed the deadline to suspend nuclear activities. However, news that Iran is not complying with the United Nations was not particularly surprising, and the stock sell-off may just reflect investors getting a little antsy after the recent advance.
Stock of Whole Foods (Nasdaq: WFMI) closed up $6.41 to $52.11, after stating that it will buy Wild Oats (Nasdaq: OATS) for around $565 million in cash. Stock of Wild Oats closed $2.69 to $18.41, in active trading. This will allow Whole Foods to compete with much larger traditional grocers, which are increasingly offering organic foods. Whole Foods will pay $18.50 a share in cash - an 18% premium to the company's closing share price on Wednesday. Whole Foods will also assume $106 million of Wild Oats' debt.
Shares of Cisco (Nasdaq: CSCO) closed up $0.02 to $27.40, and Apple Computers (Nasdaq: AAPL) closed up $0.31 to $89.51, after reaching an agreement so that both can use the iPhone name. This agreement has been reached after Cisco sued the iPod maker for using it for a new multimedia phone. In addition, the two companies will explore opportunities to work together in the areas of security, and consumer and institutional communications.
Stock of Toll Brothers (NYSE: TOL) closed down $0.93 or 3.6% to $31.93, after reporting sharply lower fiscal first-quarter profit, reflecting the ongoing collapse of the housing market. It also lowered its fiscal 2007 forecast. Its quarterly net earnings fell, after a $96.9 million write-down for the lower value of land, as the housing market continued to flounder. It earned $54.3 million, down from $163.9 million in the year earlier quarter.
Stock of Microsoft (Nasdaq: MSFT) closed up $0.04 to $29.39, after a U.S. federal jury ruled that it infringed on audio patents held by Alcatel-Lucent and should pay $1.52 billion in damages. Hares of Alcatel closed up $0.07 to $13.14. Microsoft said it plans to seek relief on the verdict as it is unsupported by the law or facts, and it may appeal.
U.S. light crude oil for April delivery rose 88 cents to settle at $60.95 a barrel on the New York Mercantile Exchange after the weekly oil inventories report showed a large drop in gasoline and oil inventories.
Stock of Toll Brothers (NYSE: TOL) closed down $0.93 or 3.6% to $31.93, after reporting sharply lower fiscal first-quarter profit, reflecting the ongoing collapse of the housing market. It also lowered its fiscal 2007 forecast. Its quarterly net earnings fell, after a $96.9 million write-down for the lower value of land, as the housing market continued to flounder. It earned $54.3 million, down from $163.9 million in the year earlier quarter.
Shares of Cisco (Nasdaq: CSCO) closed up $0.02 to $27.40, and Apple Computers (Nasdaq: AAPL) closed up $0.31 to $89.51, after reaching an agreement so that both can use the iPhone name. This agreement has been reached after Cisco sued the iPod maker for using it for a new multimedia phone. In addition, the two companies will explore opportunities to work together in the areas of security, and consumer and institutional communications.
Stock of Whole Foods (Nasdaq: WFMI) closed up $6.41 to $52.11, after stating that it will buy Wild Oats (Nasdaq: OATS) for around $565 million in cash. Stock of Wild Oats closed $2.69 to $18.41, in active trading. This will allow Whole Foods to compete with much larger traditional grocers, which are increasingly offering organic foods. Whole Foods will pay $18.50 a share in cash - an 18% premium to the company's closing share price on Wednesday. Whole Foods will also assume $106 million of Wild Oats' debt.
Stocks closed mixed on being hit by a disappointing earnings outlook from Hewlett-Packard Co. (NYSE: HPQ) and news that consumer prices rose more than expected in January, which fueled concern about inflation. However, minutes from the Federal Reserve's last meeting on interest rates, showed that the Fed wasn't overly concerned about inflation at the end of January, and somewhat soothed the market's worries.
Today, the Dow closed down 48.23 or 0.4% to 12,738.41, the broader S&P 500 closed down 2.05 to 1,457.63, and the tech-fueled Nasdaq closed up 5.38 to 2,518.42.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 17 to 15 on volume of 1.43 billion shares. On the Nasdaq, decliners topped advancers by a narrow margin on volume of 2.06 billion shares.
Investors digested the release of the minutes from the last Federal Reserve policy meeting which reiterated what they have been saying lately, that the economy is moderating but not too quickly, and that inflation remains a concern, even though it seems to be waning. The afternoon also brought comments from a trio of Fed officials that built on the same message of the economy slowing at a reasonable pace, but inflation remaining a worry.
The morning's Consumer Price Index showed a surprising resilience in a key inflation measure. The CPI rose 0.2% versus expected rise of 0.1%, while the core CPI rose 0.3%, above forecasts for a 0.2% gain. The report was a surprise to investors looking for a further confirmation that pricing pressure is waning.
Shares of Arcelor Mittal (NYSE: MT) closed 1.6% higher, after reporting a 3.5% slip in 2006 net income due to a higher tax rate and also said it will distribute $2.4 billion to shareholders via a dividend and share buybacks. Full-year pro-forma profit fell to $7.97 billion from $8.26 billion. Its EBITDA rose 2.1% to $15.27 billion in 2006, but missed analysts' expectations of $15.32 billion. In the fourth quarter, Arcelor-Mittal earned $2.37 billion, compared with $2.18 billion, in the third quarter. Sales climbed 5% to $23.3 billion. The company generated $4.3 billion in cash during the latest quarter and cut debt by $2.3 billion.
Stock of Hewlett-Packard (NYSE: HPQ) closed down $2.03 or 4.7% to $41.10, despite reporting quarterly sales and earnings that increased from a year earlier and topped estimates. The company also forecast fiscal year 2007 sales and earnings in a range that beats analysts' forecasts. Its net income rose to $1.5 billion, up 26% from $1.2 billion a year ago. Quarterly revenue rose 11% to $25.1 billion during the quarter, from $22.6 billion a year ago. Analysts were anticipating the company to report $24.3 billion in sales during the quarter.
Shares of NovaStar Financial (NYSE: NFI) closed down $7.46 or 42.5% to $10.10, after it reported a fourth-quarter loss and said it would have little or no taxable income next year. It reported a loss of $14.4 million, compared with a year-earlier profit of $28.1 million.
Stock of United Technologies Corp. (NYSE: UTX) slipped 0.8%, as one of its unit Otis was fined a total of $1.3 billion by the European Commission for allegedly rigging prices to install and maintain escalators and elevators. The fine narrowly tops the 855 million euro penalty against eight vitamin makers in 2001 and a recent 750 million euro fine for electrical generation equipment makers.
U.S. light crude oil for April delivery jumped $1.22 to settle at $60.07 a barrel on the New York Mercantile Exchange, a gain of over two percent.
Stock of United Technologies Corp. (NYSE: UTX) slipped 0.8%, as one of its unit Otis was fined a total of $1.3 billion by the European Commission for allegedly rigging prices to install and maintain escalators and elevators. The fine narrowly tops the 855 million euro penalty against eight vitamin makers in 2001 and a recent 750 million euro fine for electrical generation equipment makers.
Stock of Hewlett-Packard (NYSE: HPQ) closed down $2.03 or 4.7% to $41.10, despite reporting quarterly sales and earnings that increased from a year earlier and topped estimates. The company also forecast fiscal year 2007 sales and earnings in a range that beats analysts' forecasts. Its net income rose to $1.5 billion, up 26% from $1.2 billion a year ago. Quarterly revenue rose 11% to $25.1 billion during the quarter, from $22.6 billion a year ago. Analysts were anticipating the company to report $24.3 billion in sales during the quarter.
Shares of Arcelor Mittal (NYSE: MT) closed 1.6% higher, after reporting a 3.5% slip in 2006 net income due to a higher tax rate and also said it will distribute $2.4 billion to shareholders via a dividend and share buybacks. Full-year pro-forma profit fell to $7.97 billion from $8.26 billion. Its EBITDA rose 2.1% to $15.27 billion in 2006, but missed analysts' expectations of $15.32 billion. In the fourth quarter, Arcelor-Mittal earned $2.37 billion, compared with $2.18 billion, in the third quarter. Sales climbed 5% to $23.3 billion. The company generated $4.3 billion in cash during the latest quarter and cut debt by $2.3 billion.
Stocks rose and sent the Dow Jones Industrial Average to a record closing level, as reassuring comments from Federal Reserve Governor Susan Bies, along with upbeat results from Wal-Mart Stores Inc. (NYSE: WMT) and merger news, helped offset disappointing earnings from Home Depot Inc (NYSE: HD).
Today, the Dow Jones industrial average closed up 19.07 or 0.15% to 12,786.64, the broader S&P 500 closed up 4.14 or 0.28% to 1,459.68, and the tech-fueled Nasdaq closed up 16.73 or 0.67% to 2,513.04.
Market breadth was positive. On the New York Stock Exchange, losers beat winners by 5 to 3 on volume of 1.32 billion shares. On the Nasdaq, advancers topped decliners three to two on volume of 2.25 billion shares.
The comments from the Fed's Bies that since the beginning of the year, the market has tended to welcome any economic news showing inflation pressures are receding, which might allow the Federal Reserve to cut interest rates, reassured the markets. While the day started off on a negative note as investors back tracked after last week's run, the tone improved by midday, with the Nasdaq composite taking the lead.
Stock of Wal-Mart (NYSE: WMT) closed up $1.68 to $50.16, after reporting higher quarterly earnings that topped forecasts on sales that missed estimates. Its net income rose to $3.94 billion, up almost 10% from $3.59 billion in the period a year earlier. Revenue jumped nearly 11% during the quarter to $98.09 billion as it aggressively slashed prices during the holiday season. However, sales results fell below analysts' forecasts for revenue of $99.6 billion.
Stock of Home Depot (NYSE: HD) closed down $0.15 to $41.29, after reporting lower quarterly earnings that missed estimates. It posted a 28% drop in fourth quarter profit as the weak U.S. housing market depressed sales at its retail stores. Earnings in the fourth quarter fell to $925 million, from $1.3 billion, a year earlier. Total sales rose 4% to $20.3 billion, below analysts' estimates of $20.8 billion. Retail store sales fell 2% to $17.4 billion, while sales at stores open at least a year fell 6.6%. Sales at Home Depot Supply, rose 64% to $2.9 billion.
Stock of Sirius (Nasdaq: SIRI) jumped nearly 7% and XM Satellite (Nasdaq: XMSR) shares gained 13% on news of their deal. Although there was some doubt about whether regulators would approve the deal. Shares of Sirus closed up $0.22 to $3.92, and those of XM Satellite closed up $1.44 to $15.42. Each will own half of the combined company, which would offer listeners a much wider variety of programming, including sports, news and high-profile entertainers such as shock jock Howard Stern. XM Chairman Gary Parsons would remain chairman of the combined firm, while Sirius' Mel Karmazin would assume the role of CEO. The company would have a market value of roughly $13 billion, including approximately $1.6 billion in net debt. XM shareholders would get 4.6 shares of Sirius stock for each share of XM they own.
Shares of JetBlue (Nasdaq: JBLU) closed down $0.66 or 5% to $12.90, its CEO announced an overhaul that could cost the company $30 million dollars. The tag includes about $10 million for refunding tickets for canceled flights, $16 million for issuing travel vouchers and $4 million for incremental costs such as hiring overtime crews.
U.S. light crude oil for March delivery tumbled $1.49 to $57.90 a barrel on the New York Mercantile Exchange.
Shares of JetBlue (Nasdaq: JBLU) closed down $0.66 or 5% to $12.90, its CEO announced an overhaul that could cost the company $30 million dollars. The tag includes about $10 million for refunding tickets for canceled flights, $16 million for issuing travel vouchers and $4 million for incremental costs such as hiring overtime crews.
Stock of Sirius (Nasdaq: SIRI) jumped nearly 7% and XM Satellite (Nasdaq: XMSR) shares gained 13% on news of their deal. Although there was some doubt about whether regulators would approve the deal. Shares of Sirus closed up $0.22 to $3.92, and those of XM Satellite closed up $1.44 to $15.42. Each will own half of the combined company, which would offer listeners a much wider variety of programming, including sports, news and high-profile entertainers such as shock jock Howard Stern. XM Chairman Gary Parsons would remain chairman of the combined firm, while Sirius' Mel Karmazin would assume the role of CEO. The company would have a market value of roughly $13 billion, including approximately $1.6 billion in net debt. XM shareholders would get 4.6 shares of Sirius stock for each share of XM they own.
Stock of Home Depot (NYSE: HD) closed down $0.15 to $41.29, after reporting lower quarterly earnings that missed estimates. It posted a 28% drop in fourth quarter profit as the weak U.S. housing market depressed sales at its retail stores. Earnings in the fourth quarter fell to $925 million, from $1.3 billion, a year earlier. Total sales rose 4% to $20.3 billion, below analysts' estimates of $20.8 billion. Retail store sales fell 2% to $17.4 billion, while sales at stores open at least a year fell 6.6%. Sales at Home Depot Supply, rose 64% to $2.9 billion.
Stock indexes logged gains of over a percent for the week, with the Dow scraping out a third record high close amid otherwise mixed markets as investors consolidated gains ahead of a three-day weekend. However, data suggested economic weakness, including a big drop in housing starts, falling consumer confidence and a cautious outlook from Microsoft Corp (Nasdaq: MSFT).
Today, the Dow closed up 2.56 or 0.02% to 12,767.57, the broader S&P 500 closed down 1.27 or 0.09% to 1,455.54, and the tech-fueled Nasdaq closed down 0.79 or 0.03% to 2,496.31. For the week, the Dow gained 1.5%, the S&P closed up 1.2%, and the Nasdaq gained 1.5%.
Market breadth was positive. On the New York Stock Exchange, winners edged out losers on volume of 1.35 billion shares. On the Nasdaq, advancers beat decliners by a narrow margin of 4 to 3 on volume of 1.918 billion shares.
While stocks have gained on the back of Federal Reserve Chairman Ben Bernanke's congressional statements, the economic report has been a mixed bag. Housing starts plunged in January to the slowest pace since 1997, throwing doubts that the struggling housing market is stabilizing. The Producer Price Index (PPI), fell a larger-than-expected 0.6%t in January. The Core PPI, which excludes volatile food and energy prices, rose 0.2%, as expected. The University of Michigan Consumer Sentiment index dipped to 93.3 in February from 96.9 last month, below forecasts for a drop to 96.5.
Shares of Microsoft (Nasdaq: MSFT) closed down $0.72 or over 2% to $28.74, after the software leader's CEO said that some analysts' forecasts for Vista revenue in fiscal-year 2008 are too aggressive. He also said that operating expenses should wane.
Stock of AMR (NYSE: AMR) closed up $0.79 or 2% to $38.84, on media reports that the parent of American Airlines may be a buyout target for a group that includes Goldman Sachs (NYSE: GS) and British Airways (NYSE: BAB). The proposed bid is said to be between $9.8 billion, or $46 a share, and $11.1 billion, or $52 a share.
Shares of Compass Bancshares (Nasdaq: CBSS) closed up $4.33 or 6% to $70.70, after Spain's second largest bank offered to buy the U.S. regional bank for $9.6 billion, a more than 16% premium over its Thursday closing price.
U.S. light crude oil for March delivery rose $1.40 to $59.390 a barrel on the New York Mercantile Exchange.
Stock of AMR (NYSE: AMR) closed up $0.79 or 2% to $38.84, on media reports that the parent of American Airlines may be a buyout target for a group that includes Goldman Sachs (NYSE: GS) and British Airways (NYSE: BAB). The proposed bid is said to be between $9.8 billion, or $46 a share, and $11.1 billion, or $52 a share.
Shares of Microsoft (Nasdaq: MSFT) closed down $0.72 or over 2% to $28.74, after the software leader's CEO said that some analysts' forecasts for Vista revenue in fiscal-year 2008 are too aggressive. He also said that operating expenses should wane.
Stocks closed higher, with the Dow Jones Industrial Average setting another record high, bolstered by Caterpillar Inc.'s (NYSE: CAT) share buyback and another spate of merger news. Investors eyed mixed economic news, a rebound in oil prices and the conclusion of Fed chief Ben Bernanke's two days of congressional testimony.
Today, the Dow Jones industrial average closed up 23.15 or 0.18% to 12,765.01, the broader S&P 500 closed up 1.51 or 0.105 to 1,456.81, the tech-fueled Nasdaq closed up 8.72 or 0.35% to 2,497.1.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.377 billion shares. On the Nasdaq, advancers barely edged decliners 15 to 14 on volume of 1.972 billion shares.
Beyond Bernanke's testimony, investors are continuing to look to economic news to get a sense of whether the economy is indeed meeting the Fed's forecast. There has been an ebb and flow of stronger and weaker economic reports.
A report showed a drop in industrial production in January and a bigger-than-expected decline in capacity utilization. Additionally, there has been a surprising rise in new unemployment claims. The number surged a bigger-than-expected 44,000 last week to hit 357,000 for the week ended Feb. 10. On the upside, the February NY Empire State index, rose to 24.4 in the month, rebounding from a weak previous month and easily topping forecasts.
Stock of Caterpillar (NYSE: CAT) closed up $1.54 or 2% to $67.70, after the heavy equipment maker said it was buying back $7.5 billion of its own stock.
Shares of Baker Hughes (NYSE: BHI) closed down $6.61 or 9% to $65.33, after reporting higher quarterly earnings that missed forecasts.
Stock of RealNetwork (Nasdaq: RNWK) closed down $1.68 or 14% to $8.99, after the digital media company warned that first-quarter sales will miss analysts' estimates. The forecast overshadowed the company's otherwise positive fourth-quarter earnings report.
Shares of Baidu.com (Nasdaq: BIDU) closed down $8.55 or 10% to $106.45, after the Chinese Internet company warned l that first-quarter sales won't meet analysts' forecasts. The company also reported higher fourth-quarter earnings, but investors focused on the forecast.
U.S. light crude oil for March delivery fell 1 cent to $57.99 a barrel on the New York Mercantile Exchange, after losing around 2 percent in the morning.
Stocks rallied and pushed the Dow Jones Industrial Average to a record close as investors cheered soothing words from Federal Reserve Chairman Ben Bernanke on inflation. The market also welcomed upbeat earnings from Applied Materials Inc. (Nasdaq: AMAT) and discussion of a restructuring at DaimlerChrysler Corp (NYSE: DCX). Bernanke spoke of inflation moderating, that unemployment won't be a problem and that there are tentative signs of housing stabilizing.
Today, the Dow closed up 87.01 or 0.69% to 12,741.86, to close at a record high, taking out its previous record from two weeks ago. The broader S&P closed up 11.04 or 0.76% to 1,455.30, and the tech-fueled Nasdaq closed up 28.50 or 1.16% to 2,488.38.
Market breadth was positive. On the New York Stock Exchange, winners trounced losers seven to four on volume of 1.5 billion shares. On the Nasdaq, advancers topped decliners nine to seven as 2.2 billion shares changed hands.
The broad market was pushed higher as investors were reassured by Bernanke's views on inflation. In his speech, the Fed chief said that, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation. However, he also reiterated that the main risk to current policy is that inflation doesn't ease as expected, at which point the Fed will be prepared to "take action." Investors reacted positively to his outlook on inflation.
Investors also responded well to the January retail sales report, which showed a smaller-than-expected rise in both overall sales and sales excluding autos. This seemed to temper recent worries that stronger-than-expected economic growth could cause the Fed to start raising rates again this year.
Shares of DaimlerChrysler (NYSE: DCX) jumped 8.3% to close at $69.78, after the automaker said it would consider " far reaching" options for Chrysler, including finding a partner. It also expects to eliminate 13,000 jobs in the Chrysler division. The move aims to cut $4.5 billion in costs as the company struggles to get back in the black by 2008.
Shares of Applied Materials (Nasdaq: AMAT) closed up $0.70 or 4% to $18.89, after reporting quarterly earnings that beat forecast. While revenue was less than expected, investors focused on the strong earnings and positive forecast. Its net profit was $403.5 million, compared with $142.8 million a year earlier. Revenue was $2.28 billion, up 23% from a year earlier but lower than the $2.35 billion expected by analysts.
Shares of IBM (NYSE: IBM) closed up almost 1%, after the company claimed a breakthrough in developing circuitry to store data on future microprocessor chips. Stock of Coca-Cola (NYSE: KO) fell 0.7% after the company said fourth-quarter net income dropped 22%, hurt by an impairment charge for Coca-Cola Enterprises. However, these results excluding the charge still beat forecasts
U.S. light crude oil for March delivery slumped $1.06 to $58 a barrel on the New York Mercantile Exchange after a mixed weekly inventory report. The report showed a surprise drop in gasoline and crude supplies but a less than expected drawdown of distillates used to make heating oil.
Shares of Applied Materials (Nasdaq: AMAT) closed up $0.70 or 4% to $18.89, after reporting quarterly earnings that beat forecast. While revenue was less than expected, investors focused on the strong earnings and positive forecast. Its net profit was $403.5 million, compared with $142.8 million a year earlier. Revenue was $2.28 billion, up 23% from a year earlier but lower than the $2.35 billion expected by analysts.
Shares of DaimlerChrysler (NYSE: DCX) jumped 8.3% to close at $69.78, after the automaker said it would consider "far reaching" options for Chrysler, including finding a partner. It also expects to eliminate 13,000 jobs in the Chrysler division. The move aims to cut $4.5 billion in costs as the company struggles to get back in the black by 2008.
Stocks rallied to a sharply higher close with the Dow Jones Industrial Average gaining 100 points after a report Alcoa Inc. (NYSE: AA) may be a takeover target and news that 3M Co. (NYSE: MMM) plans a large stock buyback. Investors saw strength across the board, with a rebound in commodity shares and an upgrade of GM (NYSE: GM).
Today, the Dow Jones industrial average closed up 101.50 or 0.81% to 12,654.05, the S&P 500 closed up 10.89 or 0.76% to 1,444.26, and the tech-fueled Nasdaq closed up 9.50 or 0.39% to 2,459.88.
Market breadth was positive. On the New York Stock Exchange, winners beat losers 3 to 1 on volume of 1.45 billion shares. On the Nasdaq, advancers topped decliners 17 to 11 on volume of 1.84 million shares.
Investors are anticipating positively, Federal Reserve Chairman Ben Bernanke's two day semi-annual monetary policy report to Congress. Investors will be looking to see if his economic outlook is "focused more on the recent signs of stronger growth and lower core inflation, or on the impact from the slowdown in the housing market."
The positive news of the day overshadowed the report that the trade gap surged more than expected in December and hit a record in 2006. The trade deficit jumped 6.5% to a record $763.6 billion last year as high oil prices and Americans' appetite for foreign-made goods outpaced strong exports. The deficit came even as U.S. exports surged to a record $1.44 trillion last year, up 12.3% from 2005. But imports also jumped, up 10.5% to about $2.20 trillion for the year.
Shares of Caremark Rx (NYSE: CMX) closed up $1.97 or 3% to $62.88, after drug store CVS (NYSE: CVS) increased its bid by tripling a proposed special cash dividend to $6 a share. Stock of CVS closed down $0.40 to $32.09. CVS would pay $23.7 billion, or $54.26 per share, in stock plus the $6 cash dividend. On the other hand, Express Scripts' cash-and-stock offer has valued Caremark at $26.6 billion, or $61.08 per share.
Stock of 3M (NYSE: MMM) closed up $1.84 or 2.3% to $76.43, after its board approved a $7 billion share buyback plan and boosted its quarterly dividend. It has proposed to buy back up to $7 billion of its own shares over the next two years.
Shares of General Motors (NYSE: GM) closed up $0.88 or 2% to $36.59, after Merrill Lynch upgraded it to "buy" from "sell." The basis is that the automaker will use its liquidity and assets, specifically in its pension fund, to "affect positive change.
Shares of the Nasdaq Stock Market Nasdaq: NDAQ) closed down $4.00 or 10% to $31.10, as investors continued to ditch the stock following news that it lost its bid for the London Stock Exchange. The failed deal overshadowed the company's strong quarterly earnings.
Stock of Johnson & Johnson (NYSE: JNJ) lost 0.1% after the company said it told federal prosecutors and regulators that units outside the U.S. are believed to have made improper payments in two small-market countries.
U.S. light crude oil for March delivery rallied $1.34 to $59.15 a barrel on the New York Mercantile Exchange. Oil prices slid 3.5% after the oil ministers of Saudi Arabia and Qatar said OPEC may keep crude output unchanged at its March meeting.
Stock of 3M (NYSE: MMM) closed up $1.84 or 2.3% to $76.43, after its board approved a $7 billion share buyback plan and boosted its quarterly dividend. It has proposed to buy back up to $7 billion of its own shares over the next two years.
Shares of Caremark Rx (NYSE: CMX) closed up $1.97 or 3% to $62.88, after drug store CVS (NYSE: CVS) increased its bid by tripling a proposed special cash dividend to $6 a share. Stock of CVS closed down $0.40 to $32.09. CVS would pay $23.7 billion, or $54.26 per share, in stock plus the $6 cash dividend. On the other hand, Express Scripts' cash-and-stock offer has valued Caremark at $26.6 billion, or $61.08 per share.
Stocks closed lower as disappointing deal news and uncertainty over Federal Reserve Chairman Ben Bernanke's testimony to Congress later this week offset the boost an Apple Inc. (Nasdaq: AAPL) upgrade and a strategic move announced by Home Depot Inc (NYSE: HD). News that the Nasdaq Stock Market (Nasdaq: NDAQ) is abandoning its bid for the London Stock Exchange, also dented sentiment, somewhat offsetting the usual boost from Monday-merger news. It looks like the market is in need of more of a corrective move.
Today, the Dow Jones industrial average closed down 28.28 or 0.22% to 12,552.55, the S&P 500 closed down 4.69 or 0.33% to 1,433.37, and the tech-fueled Nasdaq closed down 9.44 or 0.38% to 2,450.38.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 19 to 12 on volume of 1.32 billion shares. On the Nasdaq, decliners topped advancers 17 to 13 on volume of 1.89 billion shares.
A host of merger and acquisition reports failed to counter the impact of a 3.5% decline in oil prices. The decline in oil dragged on energy stocks, which in turn limited the broader market's advance. This week, investors are looking for reports on retail sales, housing and manufacturing, as well as Fed Chairman Bernanke's visit to Capitol Hill. His comments will be closely monitored for hints about the economy and interest rate policy. After the market's latest advance, stocks are likely to drift or even decline a bit for the short term, particularly with the earnings reporting period over. With around 75% of the S&P 500 fourth-quarter results having already been reported, earnings are currently on track to have risen just short of 11%.
Shares of Home Depot (NYSE: HD) closed up $0.44 or 1.6% to $41.44, on reports that it is considering the sale of its wholesale distribution unit, HD Supply, as it focuses on its retail business. HD supply has an annual revenue of about $12 billion. HD Supply has nearly 1,000 locations in the United States and Canada and has more than 26,000 employees.
Stock of Four Seasons (NYSE: FS) closed down $2.52 to $81.36, after it agreed to be taken private for $3.8 billion, including debt, by an investment group that included a firm run by Bill Gates and Saudi Prince Alwaleed bin Talal. Investors have offered $82 in cash per limited voting share in the deal.
In another news, Blackstone Group has decided to acquire Pinnacle Foods Group, the owner of Vlasic Pickles, Duncan Hines and other brands, for about $2.2 billion. Pinnacle Foods is jointly owned by affiliates of J.P Morgan Partners, J.W. Childs Associates L.P., CDM Group, and by former bondholders of Aurora Foods Inc.
Shares of Vodafone (NYSE: VOD) closed up $0.58 to $29.53, after it won a majority stake in Indian mobile firm Hutchison Essar, in a deal worth $11.1 billion. This values India's fourth-biggest mobile firm at around $19 billion, including debt. India's Essar Group, which owns 33% of Hutch Essar and had also been bidding for the 67% being sold by Hutchison Telecommunications International Ltd, confirmed the deal on Sunday. The deal is a critical move by Vodafone CEO Arun Sarin, who is under pressure amid slowing growth in Vodafone's core European markets to expand the business while at the same time not overpay for acquisitions.
U.S. light crude oil for March delivery sank $2.08 to settle at $57.81 a barrel on the New York Mercantile Exchange after the oil ministers of Saudi Arabia and Qatar said OPEC may keep crude output unchanged at its March meeting.
Shares of Home Depot (NYSE: HD) closed up $0.44 or 1.6% to $41.44, on reports that it is considering the sale of its wholesale distribution unit, HD Supply, as it focuses on its retail business. HD supply has an annual revenue of about $12 billion. HD Supply has nearly 1,000 locations in the United States and Canada and has more than 26,000 employees.
Shares of Vodafone (NYSE: VOD) closed up $0.58 to $29.53, after it won a majority stake in Indian mobile firm Hutchison Essar, in a deal worth $11.1 billion. This values India's fourth-biggest mobile firm at around $19 billion, including debt. India's Essar Group, which owns 33% of Hutch Essar and had also been bidding for the 67% being sold by Hutchison Telecommunications International Ltd, confirmed the deal on Sunday. The deal is a critical move by Vodafone CEO Arun Sarin, who is under pressure amid slowing growth in Vodafone's core European markets to expand the business while at the same time not overpay for acquisitions.
Stocks closed lower on the day and week, dented by a rise in crude futures, hawkish remarks by Federal Reserve officials leaving open the possibility of more rate hikes and concern by Micron Technology (Nasdaq: MU) executives about memory chip demand and pricing. These worries overshadowed new upgrades of Ford Motor Co. (Nasdaq: F) and General Motors Corp (NYSE: GM).
Today, the Dow Jones industrial average closed down 56.80 or 0.45% to 12,580.83, the broader S&P 500 closed down 10.25 or 0.71% to 1,438.06, and the Nasdaq closed down 28.85 or 1.16% to 2,459.82. For the week, the Dow and Nasdaq each lost about 0.6%, while the S&P shed about 0.7%.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by more than 22 to 9 on volume of 1.637 billion shares. On the Nasdaq, decliners beat advancers 2 to 1 on volume of 2.221 billion shares.
Hawkish remarks by Fed members set the tone of the market and made investors worried. William Poole, president of the Federal Reserve Bank of St. Louis, estimated that growth in U.S. GNP this year will run at about a 3% clip. Poole also said he hopes core inflation will settle below 2% - but said the Fed is prepared to take action if inflation is not contained. This lest investors unsettled and put a lid on how high the markets could go. Cleveland Fed chief Sandra Pianalto said inflation statistics show improvement, but a firmer policy may be needed. She left open the possibility of further rate increases. Dallas Fed chief Richard Fisher said he was pleased with the current direction of inflation. He also declined to rule out more rate increases.
Early next week, traders will take the nation's economic pulse with reports on the trade balance due Tuesday and retail sales due Wednesday. Housing starts and the inflation-gauging Producer Price Index are set for release Friday.
Shares of Gateway Inc. (NYSE: GTW) fell 9.7% to $1.94, as it reported mixed fourth-quarter results that showed a drop in revenue even as it posted a profit of $8.8 million. The company turned in an EPS of 2 cents, compared to a loss of $20.9 million a year ago. Revenue slipped to $1.02 billion from $1.12 billion in the year-ago quarter, owing to the weaker-than-normal demand in its retail business. Retail sales fell 5% from a year ago, to $755 million, and professional sales totaled $181 million, down 16% from a year ago. Direct sales revenue fell 26%, to $85 million in the quarter.
Shares of Lear Corp. (NYSE: LEA) dropped 1.7% to $39.39 as the company's board accepted a buyout offer from a partnership backed by Icahn's American Real Estate Partners L.P (NYSE: ACP). The group offered $5.3 billion, or $36 a share, for Lear. But Pzena Investment management, which holds a 10.1% stake in Lear, said that it believes the company's value to be closer to $60 a share.
Stock of MasterCard International (NYSE: MA) closed down $11.14 to $103.60, despite reporting fourth-quarter earnings that rose from a year earlier and topped estimates. However, investors focused on the company's cautious comments about gross margin growth in 2007. The company earned $40.9 million, in the fourth quarter, compared with a loss of $52.9 million a year ago. Revenue in the quarter was $839.2 million, up 17% from $715.9 million a year ago.
Stock of Alcatel-Lucent (NYSE: ALU) closed down $0.37 to $13.30, after the company reported a fourth-quarter loss versus a profit a year earlier. The company also said that it would cut 12,500 jobs during the next three years.
U.S. light crude oil for March delivery closed up 18 cents at $59.89 a barrel on the New York Mercantile Exchange.
Stock of MasterCard International (NYSE: MA) closed down $11.14 to $103.60, despite reporting fourth-quarter earnings that rose from a year earlier and topped estimates. However, investors focused on the company's cautious comments about gross margin growth in 2007. The company earned $40.9 million, in the fourth quarter, compared with a loss of $52.9 million a year ago. Revenue in the quarter was $839.2 million, up 17% from $715.9 million a year ago.
Shares of Lear Corp. (NYSE: LEA) dropped 1.7% to $39.39 as the company's board accepted a buyout offer from a partnership backed by Icahn's American Real Estate Partners L.P (NYSE: ACP). The group offered $5.3 billion, or $36 a share, for Lear. But Pzena Investment management, which holds a 10.1% stake in Lear, said that it believes the company's value to be closer to $60 a share.
Shares of Gateway Inc. (NYSE: GTW) fell 9.7% to $1.94, as it reported mixed fourth-quarter results that showed a drop in revenue even as it posted a profit of $8.8 million. The company turned in an EPS of 2 cents, compared to a loss of $20.9 million a year ago. Revenue slipped to $1.02 billion from $1.12 billion in the year-ago quarter, owing to the weaker-than-normal demand in its retail business. Retail sales fell 5% from a year ago, to $755 million, and professional sales totaled $181 million, down 16% from a year ago. Direct sales revenue fell 26%, to $85 million in the quarter.
Stocks closed lower even as late gains in technology and energy contained losses for the broad market, after HSBC Holdings (NYSE: HBC), the world's third largest bank, warned that bad debts were on the rise in the U.S. The downtrend was possibly a reaction to the negative news coming out HSBC. Investors mulled January retail sales, higher oil prices and revived worries about the impact of the slowdown in the housing market.
Today, the Dow Jones industrial average closed down 29.24 or 0.23% to 12,637.63, the broader S&P 500 closed down 1.71 or 0.12% to 1,448.31, and the Nasdaq closed down 1.83 or 0.07% to 2,488.67.
Market breadth was negative. On the New York Stock Exchange, decliners topped advancers by a slim margin of 17 to 15 on volume of 1.6 billion shares. On the Nasdaq, losers beat winners by a narrow margin of 15 to 14 on volume of 2.0 billion shares.
The report on January retail sales, ran from weak to strong, suggesting a decent but not remarkable post-Christmas period for the chain stores. Same-store receipts at 55 of the nation's top chain-store retailers climbed 3.9%, against the 3.1% forecast. Overall, it was certainly a nice finish to the fiscal year -- and a nice start to the calendar year.
Concerns about the impact from the collapse in the housing market were revived. Toll Brothers (NYSE: TOL) warned about its quarterly revenue, and HSBC Bank (NYSE: HBC) and New Century Financial (NYSE: NEW) warned about problems resulting from defaults on home loans.
Stock of Costco Wholesale (Nasdaq: COST) closed down $0.51 to $56.62, after posting smaller than expected rise of 2% in same-stores sales. Stock of GAP (NYSE: GPS) closed up $0.50 to $19.75, after posting flat same-store sales versus a decline a year ago.
Stock of Toll Brothers (NYSE: TOL) closed down $1.04 to $33.39, after warning of first-quarter homebuilding revenue and orders that will fall sharply and that it will take substantial write-downs related to land it optioned for development but now is walking away from because of the housing slump.
Shares of HSBC (NYSE: HBC) closed down $2.44 to $89.78, after warning that its bad-debt charge for last year would be higher than expected. This is a result of problems with its U.S. mortgage lending. It expects that bad debt provisions would be 20% higher than analysts had forecast for 2006.
Shares of Walt Disney (NYSE: DIS) closed down $0.19 to $35.29, after reporting quarterly sales and earnings that rose from a year ago and topped estimates. Sales climbed 10% to $9.7 billion, ahead of the expected $9.5 billion, and net profit more than doubled to $1.7 billion.
Shares of EMC (NYSE: EMC) closed up $0.90 to $14.50, after the computer data storage company said it will spin off roughly 10% of VMware, its computing virtualization unit.
U.S. light crude oil for March delivery rose $2 to settle at $59.71 a barrel on the New York Mercantile Exchange.
Shares of HSBC (NYSE: HBC) closed down $2.44 to $89.78, after warning that its bad-debt charge for last year would be higher than expected. This is a result of problems with its U.S. mortgage lending. It expects that bad debt provisions would be 20% higher than analysts had forecast for 2006.
Shares of Walt Disney (NYSE: DIS) closed down $0.19 to $35.29, despite reporting quarterly sales and earnings that rose from a year ago and topped estimates. Sales climbed 10% to $9.7 billion, ahead of the expected $9.5 billion, and net profit more than doubled to $1.7 billion.
Stocks closed slightly higher, with the Dow Jones Industrial Average barely finishing in positive territory after hitting a new record high, as a drop in crude-oil prices weighed on the energy sector, while the technology sector remained boosted by Cisco Systems Inc.'s (Nasdaq: CSCO) upbeat earnings. Investors have now to look at where the next good news is coming from.
Today, the Dow Jones industrial average closed up 0.56 or 0.0% to 12,666.87, the broader S&P 500 closed up 2.02 or 0.14% to 1,450.02, the Nasdaq closed up 19.01 or 0.77% to 2,490.50.
Market breadth remained positive. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.5 billion shares. On the Nasdaq, advancers beat decliners 18 to 11 on volume of 2.2 billion shares.
On the economic front, the first read on fourth-quarter productivity came in at a 3% growth rate, up from the previous month and beating the 2% forecast. Unit labor costs, the report's inflation component, came in at a smaller-than-expected 1.7% rate. With businesses getting more output out of each hour worked, the rising costs of pay and benefits pose less of an inflation risk. This furthers bets that economic growth, although moderating, remains solid, and that inflation pressures are dwindling. These numbers ought not to be seen as unduly threatening by the Fed.
Shares of Cisco Systems (Nasdaq: CSCO) rose 4% after the company reported quarterly sales and earnings that rose from a year earlier and topped forecasts. The company also issued bullish guidance for its current quarter, giving hope to investors that corporate tech spending will show strength in 2007. Sales came in at $8.4 billion, compared to projections of $8.28 billion, and up 27% over the last year. The second-quarter net income was up 40% to $1.9 billion.
Shares of Amazon.com Inc. (Nasdaq: AMZN) rose 1.9% after it announced it is partnering with TiVo Inc. (Nasdaq: TIVO) to offer movies and TV shows that can be sent to a TiVo box or a computer, and can also be used on portable devices. Shares of TiVo Inc gained 9%.
Stock of Whirlpool (NYSE: WHR) lost 2.9% to $86.70. 3% as the company reported a 13% profit decline on discontinued operations, while revenue rose 25%. Its net income totaled $117 million, compared with $114 million a year earlier. Third-quarter earnings from continuing operations totaled $134 million, sales in the third quarter surged 35% to $4.8 billion, and the total revenue rose about 8%.
Crude oil for March delivery fell $1.17 to $57.71 a barrel on the New York Mercantile Exchange.
Shares of Cisco Systems (Nasdaq: CSCO) rose 4% after the company reported quarterly sales and earnings that rose from a year earlier and topped forecasts. The company also issued bullish guidance for its current quarter, giving hope to investors that corporate tech spending will show strength in 2007. Sales came in at $8.4 billion, compared to projections of $8.28 billion, and up 27% over the last year. The second-quarter net income was up 40% to $1.9 billion.
Stock of Whirlpool (NYSE: WHR) lost 2.9% to $86.70. 3% as the company reported a 13% profit decline on discontinued operations, while revenue rose 25%. Its net income totaled $117 million, compared with $114 million a year earlier. Third-quarter earnings from continuing operations totaled $134 million, sales in the third quarter surged 35% to $4.8 billion, and the total revenue rose about 8%.
Stocks closed slightly higher as crude oil prices failed to reach $60 a barrel, lifting overall sentiment and offsetting earlier weakness in the technology sector. Investors appear to be waiting for news from Cisco (Nasdaq: CSCO) due later after market close.
Today, the Dow Jones industrial average closed up 4.57 or 0.04% to 12,666.31, the broader S&P 500 closed up 1.01 or 0.07% to 1,448.00, and the Nasdaq closed up 0.89 or 0.04% to 2,471.49.
Market breadth was positive. On the New York Stock Exchange, winners beat losers by nearly 21 to 11 on volume of 1.47 billion shares. On the Nasdaq, advancers edged decliners 16 to 13 on volume of 2.15 billion shares.
Investors have been struggling a bit this week, and the afternoon comments from Fed Chairman Ben Bernanke and Chicago Fed president Michael Moskow failed to address current economic policy. Fed Chairman Bernanke, discussed the history and implications of economic and wage inequality. Chicago Fed president Michael Moskow, discussed economic development in the Illinois region and did not address current policy. San Francisco Fed president Janet Yellen spoke later in the session, saying the economy is on very solid turf, with the exception of the auto and housing sectors. The direction of oil prices is expected to give the market some direction in the next few days.
Shares of Wal-Mart Stores Inc. (NYSE: WMT) rose slightly after the retailer announced that it is testing a possible video download service that would offer more than 3,000 films and television shows. This will bring the company into the burgeoning market for digital entertainment delivered to U.S. homes.
Stock of National Semiconductor (NYSE: NSM) closed down $0.64 or 2.7% to $22.68, after warning that revenue in its fiscal third quarter will fall more substantially from the second quarter, due to slower shipments. It projected a 14% to 15% decrease in third-quarter revenue from second-quarter levels.
In mergers news, shares of MGIC Investment (NYSE: MTG) closed up $7.16 to $70.09, after it stated that it is buying rival Radian Group (NYSE: RDN) in a $4.9 billion stock swap. Shares of Radian Group closed up $5.67 to $66.51. Blackstone has boosted its offer for Equity Office Properties (NYSE: EOP) to $23 billion, bringing its bid to just below the counter offer made by Vornado Realty Trust (NYSE: VNO). Shares of Equity Office closed up $0.59 to $56.05, and that of Vornado closed up $1.90 to $127.00.
Crude oil for March delivery rose 14 cents to settle at $58.88 a barrel on the New York Mercantile Exchange. While crude-oil futures continued to gain on Tuesday, they fell short of reaching $60.
Shares of Wal-Mart Stores Inc. (NYSE: WMT) rose slightly after the retailer announced that it is testing a possible video download service that would offer more than 3,000 films and television shows. This will bring the company into the burgeoning market for digital entertainment delivered to U.S. homes.
Stock of National Semiconductor (NYSE: NSM) closed down $0.64 or 2.7% to $22.68, after warning that revenue in its fiscal third quarter will fall more substantially from the second quarter, due to slower shipments. It projected a 14% to 15% decrease in third-quarter revenue from second-quarter levels.
Stocks closed mixed with better-than-expected sales at Wal-Mart Stores Inc. (NYSE: WMT) providing mild support for the Dow Jones Industrial Average, while a bearish report on Microsoft Corp. (Nasdaq: MSFT) weighed on the stock and the technology sector. With fourth-quarter earnings season winding down, investors were also contemplating the market's recent advance. The slew of merger news could not give boost to the market.
Today, the Dow Jones industrial average closed up 8.25 or 0.07% to 12,661.74, the S&P 500 closed down 1.40 or 0.10% to 1,446.99, and the tech-heavy Nasdaq composite closed down 5.28 or 0.21% to 2,470.60.
Market breadth was negative. On the New York Stock Exchange, losers edged out winners on volume of 1.4 billion shares. On the Nasdaq, decliners topped advancers four to three on volume of 1.9 billion shares.
It appears that we are going through a period of consolidation. Stocks may not show much direction over the next few days until the fourth-quarter productivity report on Wednesday, December's reports on consumer credit and wholesale inventories later in the week. The ISM index rose to 59.0 from 56.7 in December, above the median forecast of 57.0 among analysts.
Shares of Wal-Mart Stores (NYSE: WMT) closed up $0.44 or 1% to $48.52, after stating that January rose 2.2%, beating its prior forecast calling for a gain of 1% to 2%. However, this is the lowest annual sales growth in more than 25 years.
Stock of Microsoft (Nasdaq: MSFT) closed down $0.58 or 2% to $29.61, after financial weekly Barron's suggested that shares are not likely to get a boost from Vista since bets on its success are likely already priced into the stock.
Stock of Triad Hospitals (NYSE: TRI) closed up $6.38 or 15% to $49.65, after it agreed to a $4.7 billion private equity buyout offer. The deal includes about $1.7 billion of debt and is valued at $6.4 billion. The buyers will pay $50.25 per share, which is a 16% premium over the Friday closing. Triad can solicit superior proposals from third parties during the next 40 days.
Shares of State Street closed (NYSE: STT) down $4.67 or 6% to $67.08, after stating that it was buying Investors Financial for $4.5 billion in stock. Shares of Investor Financial closed (Nasdaq: IFIN) up $12.81 or 27% to $59.80. Both boards have approved the deal, which calls for the exchange of 0.906 State Street share for each share of Investors Financial Services Corp.
Stock of Apple (Nasdaq: AAPL) fell 1% even after the tech icon reached an agreement with the Beatle's Apple Corps. Ltd over their to long-standing trademark dispute. This may pave the way for Beatles songs to be made available for sale on Apple's iTunes Music Store.
America Real Estate Partners, has made an offer to buy Lear Corp for about $2.4 billion. Shares of Lear Corp (NYSE: LEA) closed up $3.97 or 11.5% to $38.64. Lear is a global supplier of automotive interior systems and the offer represents a 3.8% premium to its closing price of $34.67 on Friday.
U.S. light crude oil for March delivery fell 31 cents to $58.71 a barrel on the New York Mercantile Exchange.
Stock of Apple (Nasdaq: AAPL) fell 1% even after the tech icon reached an agreement with the Beatle's Apple Corps. Ltd over their to long-standing trademark dispute. This may pave the way for Beatles songs to be made available for sale on Apple's iTunes Music Store.
Stock of Triad Hospitals (NYSE: TRI) closed up $6.38 or 15% to $49.65, after it agreed to a $4.7 billion private equity buyout offer. The deal includes about $1.7 billion of debt and is valued at $6.4 billion. The buyers will pay $50.25 per share, which is a 16% premium over the Friday closing. Triad can solicit superior proposals from third parties during the next 40 days.
Shares of Wal-Mart Stores (NYSE: WMT) closed up $0.44 or 1% to $48.52, after stating that January rose 2.2%, beating its prior forecast calling for a gain of 1% to 2%. However, this is the lowest annual sales growth in more than 25 years.
Stocks closed mixed Friday but chalked up gains for the week, after a weaker-than-expected January employment report eased investor concern about inflation but weighed on economically-sensitive stocks on the Dow Jones Industrial Average. Often short-term traders try to catch some profit and today's down trend can be attributed to that.
Today, the Dow Jones Industrial average closed down 20.19 or 0.16% to 12,653.49, the broader S&P 500 closed up 2.45 or 0.17% to 1,448.39, and the tech-heavy Nasdaq composite index closed up 7.50 or 0.30% to 2,475.88. For the week, the Dow was up 1.3%, the S&P 500 gained 1.8% and the Nasdaq rose 1.7%. The S&P 500 recorded its biggest weekly gain since August, while the Dow notched its best weekly performance since November.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 18 to 13 on volume of 1.43 billion shares. On the Nasdaq, advancers narrowly edged out decliners 4 to 3 on volume of 1.9 billion shares.
Job growth slowed in January, and the labor market was roughly in line with Wall Street forecasts. Employers added 111,000 jobs in January, short of 150,000 jobs that economists' had forecasts. Average hourly earnings, rose only 0.2% in January, versus forecasts for a rise of 0.3%. The unemployment rate, rose to a higher-than-expected 4.6%. The report added to bets that the economy is heading for a soft landing, rather than a recession, inflation is contained and the Federal Reserve can stay on hold.
Consumer sentiment rose in January to its highest in two years on favorable expectations for the U.S. economy and for higher wage gains. The final January reading on the consumer sentiment index rose to 96.9 from 91.7 at the end of December. This is the highest since December 2004. The one-year inflation index edged up to 3.0% in January from 2.9% in late December, and its five-year inflation index stood at 3.0% for a third straight month.
Stock of Amazon (Nasdaq: AMZN) closed down $1.31 or 4% to $37.39, after the company reported lower fourth-quarter earnings that topped estimates and lifted its revenue forecast for the first quarter. The company reported net income of $98 million, down from $199 million a year earlier. Sales jumped 34% to $3.99 billion as shoppers took advantage of its unlimited free-shipping incentives.
Shares of Electronics Arts (Nasdaq: ERTS) gained 1.2% at $51.13, as investors looked past a 37% drop in profit and a sales forecast that lagged Wall Street estimates. The results came as a pleasant surprise to several analysts who had expected the company to come in below consensus forecasts. The company also outlined a plan for the coming fiscal year that includes stepped-up development for Nintendo platforms, including the popular Wii that debuted on the market in November and has outsold PlayStation 3.
Shares of Chevron (NYSE: CVX) closed down $0.43 to $74.04, after reporting lower fourth-quarter profit, hurt by falling natural gas prices. Net income in the quarter dropped to $3.77 billion, from $4.14 billion in 2005. Revenue in the quarter fell to $47.75 billion from $53.79 billion last year. The company said that it added slightly more oil and gas to its reserves than it produced in 2006 - 950 million barrels of oil equivalent, or 101% of production
U.S. light crude oil for March delivery rose $1.72 to $59.02 a barrel on the New York Mercantile Exchange.
Shares of Chevron (NYSE: CVX) closed down $0.43 to $74.04, after reporting lower fourth-quarter profit, hurt by falling natural gas prices. Net income in the quarter dropped to $3.77 billion, from $4.14 billion in 2005. Revenue in the quarter fell to $47.75 billion from $53.79 billion last year. The company said that it added slightly more oil and gas to its reserves than it produced in 2006 - 950 million barrels of oil equivalent, or 101% of production
Shares of Electronics Arts (Nasdaq: ERTS) gained 1.2% at $51.13, as investors looked past a 37% drop in profit and a sales forecast that lagged Wall Street estimates. The results came as a pleasant surprise to several analysts who had expected the company to come in below consensus forecasts. The company also outlined a plan for the coming fiscal year that includes stepped-up development for Nintendo platforms, including the popular Wii that debuted on the market in November and has outsold PlayStation 3.
Stock of Amazon (Nasdaq: AMZN) closed down $1.31 or 4% to $37.39, after the company reported lower fourth-quarter earnings that topped estimates and lifted its revenue forecast for the first quarter. The company reported net income of $98 million, down from $199 million a year earlier. Sales jumped 34% to $3.99 billion as shoppers took advantage of its unlimited free-shipping incentives.
Stocks closed higher sending the Dow Jones Industrial Average to a record close, as optimism about a cooler-than-expected reading on inflation, together with falling crude oil prices, offset disappointing earnings from a few companies. The market's advance was slightly dented by news that the manufacturing sector contracted in January. However, the primary overhang in the market recently has been concerns over faster-than-expected economic growth leading to inflation and putting upwards pressure on interest rates.
Today, the Dow Jones Industrial average closed up 51.99 or 0.41% to 12,673.68, at a record high, taking out its previous record from a week ago. The broader S&P 500 closed up 7.70 or 0.54% to 1,445.94, at its highest point since November 2000. The tech-heavy Nasdaq composite closed up 4.45 or 0.18% to 2,468.38.
Market breadth was positive. On the New York Stock Exchange, winners topped losers by more than 3 to 2 on volume of 1.68 billion shares. On the Nasdaq, advancers topped decliners by a similar margin on volume of 2.22 billion shares.
Stocks rose as investors focused on Dell's (NYSE: DELL) management shakeup and some of the economic news. The decision by the Feds to keep the key short-term interest rate steady at 5.25% and the statement that the economy is holding firm, while core inflation is moderating assisted the markets. Personal income and spending rose in December, and the core PCE deflator, rose just 0.1%. The year-over-year change in the core PCE deflator is 2.2%, just above what most economists believe is the Federal Reserve's comfort zone of a 1 to 2%. Additionally, there has been a bigger than expected decline in the number of Americans filing new claims for unemployment. However, the January ISM index, showed a bigger than expected decline, falling to 49.3. A level below 50 is seen as meaning contraction in the sector.
Shares of Dell (NYSE: DELL) closed down $0.42 to $23.80, after the company announced that chairman and founder Michael Dell would retake the helm of the company, replacing its CEO, who abruptly resigned. The company also warned that fiscal fourth-quarter sales and earnings would miss estimates.
Shares of Google (Nasdaq: GOOG) closed down $19.75 to $481.75, as investors took a "sell the news" approach in response to its earnings. The Internet search leader reported higher quarterly and full-year financial results that topped analysts' estimates. It reported a net income surge of 177% to $1 billion. The company reported a profit of $3.18 after backing out tax adjustments, stock compensation cost and other items. Revenue jumped 67% to $3.21 billion.
Shares of Exxon Mobil (NYSE: XOM) closed up $0.98 to $75.08, after reporting the highest annual profit in U.S. history, although fourth-quarter net income slipped from a year earlier. For the year, Exxon Mobil earned $39.5 billion, up from its previous record $36.1 billion in 2005. Net income in the fourth quarter slipped to $10.25 billion, from $10.71 billion a year earlier. Revenue in the quarter fell 9.4% to $90.03 billion. Earnings from exploration and production activities were $6.22 billion, down $818 million from a year earlier due to the natural gas price drop and decreased volumes driven by lower demand in Europe. Earnings from refining and marketing operations totaled $1.86 billion, down $430 million due to lower margins.
U.S. light crude oil for March delivery fell 84 cents to settle at $57.30 a barrel on the New York Mercantile Exchange. The price of oil has surged over the last week, after slumping through the first part of the year.
Shares of Google (Nasdaq: GOOG) closed down $19.75 to $481.75, as investors took a "sell the news" approach in response to its earnings. The Internet search leader reported higher quarterly and full-year financial results that topped analysts' estimates. It reported a net income surge of 177% to $1 billion. The company reported a profit of $3.18 after backing out tax adjustments, stock compensation cost and other items. Revenue jumped 67% to $3.21 billion.
Shares of Exxon Mobil (NYSE: XOM) closed up $0.98 to $75.08, after reporting the highest annual profit in U.S. history, although fourth-quarter net income slipped from a year earlier. For the year, Exxon Mobil earned $39.5 billion, up from its previous record $36.1 billion in 2005. Net income in the fourth quarter slipped to $10.25 billion, from $10.71 billion a year earlier. Revenue in the quarter fell 9.4% to $90.03 billion. Earnings from exploration and production activities were $6.22 billion, down $818 million from a year earlier due to the natural gas price drop and decreased volumes driven by lower demand in Europe. Earnings from refining and marketing operations totaled $1.86 billion, down $430 million due to lower margins.
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