Daily Market Summary 2/13/07

[Portfolio Crafter]

End of Day Market Summary Tuesday, February 13, 2007
by Portfolio Crafter
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Stocks rallied to a sharply higher close with the Dow Jones Industrial Average gaining 100 points after a report Alcoa Inc. may be a takeover target and news that 3M Co. plans a large stock buyback. Investors saw strength across the board, with a rebound in commodity shares and an upgrade of 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 closed up $1.97 or 3% to $62.88, after drug store 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 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 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 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 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.

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