Portfolio Crafter
10-24-2006, 02:20 AM
End of Day Market Summary Monday, 10/23/2006
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Stocks rallied to a sharply higher close after plans by Wal-Mart Stores Inc. to improve profitability at its existing stores sparked a broader market rally, with gains for General Motors Corp, 3M Co. and others lending further blue-chip support. The latest round of solid corporate earnings and perhaps some speculative buying, pushed the Dow Jones industrial average up more than 100 points to another record close.
Today, the Dow Jones Industrial Average closed up 114.54 points or 0.95% at 12,116.91, the S&P 500 Index closed up 8.42 points or 0.62% at 1,377.02, and the Nasdaq Composite Index rose 13.26 points or 0.57% to 2,355.56.
Market breadth was mixed. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.554 billion shares. On the Nasdaq market, decliners edged out advancers 15 to 14 as 1.869 billion shares changed hands.
Results so far show that companies are having a strong earnings season, and things look strong. It appears as if investors are moving from fixed income and going into equities, in a bid to chase profits going into the fourth quarter. However, they are nervous as to whether the economy can handle a cooling period without slipping into recession.
Investors now await the Federal Reserve decision on interest rates due Wednesday. With growth slowing and inflation worries easing a little, most economists expect the central bank to leave its key federal funds rate unchanged at 5.25%. Wednesday, will provide data on existing-home sales while new-home sales data and a report on durable-goods orders would come out Thursday. The initial forecast on third-quarter economic growth will be released on Friday. The pace of U.S. economic growth is expected to have slowed to 2% from 2.6% in the second quarter.
Stock of Wal-Mart closed up 3.9% at $51.28, after discussing its future plans. The company will slightly slow down new-store growth in fiscal 2008 while significantly reducing capital expenditures. It will increase new-store growth throughout the world by about 7.5% next year, compared with an average 8% increase of recent years. Capital spending will run about 2% to 4% higher next year, compared with a 15% to 20% increase in the current fiscal year.
Shares of AT&T Inc. closed up 27 cents at $34.71. The company reported third-quarter net income jumped nearly 74%, lifted largely by acquisitions and results at the Cingular Wireless joint venture. The company earned $2.17 billion in its third full quarter of operations since the former SBC Communications bought the old AT&T and adopted its name. Revenue jumped 52% to $15.64 billion from $10.3 billion.
Forest Laboratories and partner Replidyne Inc. were hit hard by news that the FDA has given the thumbs down for their antibiotic candidate faropenem medoxomil. Shares of Replidyne plunged 45% to close at $5.59, while Forest shares skidded almost 6% to $48.54. The FDA has stated that it would not approve the antibiotic unless more clinical trials were conducted.
Shares of Ford declined 1.4% to close at $7.90 after the automaker reported a wider third-quarter loss, reflecting difficulties in its operations and restructuring costs, and said that it would restate earnings going back five years for derivatives accounting. It reported a $5.8 billion third-quarter loss compared to $284 million last year. It also said that the current quarter's operating results are shaping up to be even worse.
It is reported that Ripplewood Holdings LLC is preparing a likely $10 billion bid for Delphi Corp. The stock of Delphi rose 8.7% to $2.62. This push is being led by Thomas Stallkamp, a Ripplewood partner and former president of Chrysler. The bid would likely surpass $10 billion, as Ripplewood would be joined by other interested parties such as Appaloosa Management, a hedge fund, and Cerberus Capital Management LP, a private-equity firm.
Oil prices fell 48 cents to $58.85 a barrel on the New York Mercantile Exchange despite an announcement from Saudi Arabia that it would cut production. Oil traders have strong doubts that the rest of OPEC will follow Saudi Arabia's lead and rein in production, regardless of what OPEC officially says.
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by Portfolio Crafter (http://www.portfoliocrafter.com?a_aid=fiasco)
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Stocks rallied to a sharply higher close after plans by Wal-Mart Stores Inc. to improve profitability at its existing stores sparked a broader market rally, with gains for General Motors Corp, 3M Co. and others lending further blue-chip support. The latest round of solid corporate earnings and perhaps some speculative buying, pushed the Dow Jones industrial average up more than 100 points to another record close.
Today, the Dow Jones Industrial Average closed up 114.54 points or 0.95% at 12,116.91, the S&P 500 Index closed up 8.42 points or 0.62% at 1,377.02, and the Nasdaq Composite Index rose 13.26 points or 0.57% to 2,355.56.
Market breadth was mixed. On the New York Stock Exchange, winners beat losers 19 to 13 on volume of 1.554 billion shares. On the Nasdaq market, decliners edged out advancers 15 to 14 as 1.869 billion shares changed hands.
Results so far show that companies are having a strong earnings season, and things look strong. It appears as if investors are moving from fixed income and going into equities, in a bid to chase profits going into the fourth quarter. However, they are nervous as to whether the economy can handle a cooling period without slipping into recession.
Investors now await the Federal Reserve decision on interest rates due Wednesday. With growth slowing and inflation worries easing a little, most economists expect the central bank to leave its key federal funds rate unchanged at 5.25%. Wednesday, will provide data on existing-home sales while new-home sales data and a report on durable-goods orders would come out Thursday. The initial forecast on third-quarter economic growth will be released on Friday. The pace of U.S. economic growth is expected to have slowed to 2% from 2.6% in the second quarter.
Stock of Wal-Mart closed up 3.9% at $51.28, after discussing its future plans. The company will slightly slow down new-store growth in fiscal 2008 while significantly reducing capital expenditures. It will increase new-store growth throughout the world by about 7.5% next year, compared with an average 8% increase of recent years. Capital spending will run about 2% to 4% higher next year, compared with a 15% to 20% increase in the current fiscal year.
Shares of AT&T Inc. closed up 27 cents at $34.71. The company reported third-quarter net income jumped nearly 74%, lifted largely by acquisitions and results at the Cingular Wireless joint venture. The company earned $2.17 billion in its third full quarter of operations since the former SBC Communications bought the old AT&T and adopted its name. Revenue jumped 52% to $15.64 billion from $10.3 billion.
Forest Laboratories and partner Replidyne Inc. were hit hard by news that the FDA has given the thumbs down for their antibiotic candidate faropenem medoxomil. Shares of Replidyne plunged 45% to close at $5.59, while Forest shares skidded almost 6% to $48.54. The FDA has stated that it would not approve the antibiotic unless more clinical trials were conducted.
Shares of Ford declined 1.4% to close at $7.90 after the automaker reported a wider third-quarter loss, reflecting difficulties in its operations and restructuring costs, and said that it would restate earnings going back five years for derivatives accounting. It reported a $5.8 billion third-quarter loss compared to $284 million last year. It also said that the current quarter's operating results are shaping up to be even worse.
It is reported that Ripplewood Holdings LLC is preparing a likely $10 billion bid for Delphi Corp. The stock of Delphi rose 8.7% to $2.62. This push is being led by Thomas Stallkamp, a Ripplewood partner and former president of Chrysler. The bid would likely surpass $10 billion, as Ripplewood would be joined by other interested parties such as Appaloosa Management, a hedge fund, and Cerberus Capital Management LP, a private-equity firm.
Oil prices fell 48 cents to $58.85 a barrel on the New York Mercantile Exchange despite an announcement from Saudi Arabia that it would cut production. Oil traders have strong doubts that the rest of OPEC will follow Saudi Arabia's lead and rein in production, regardless of what OPEC officially says.
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