U.S. stocks rise on Iraq, earnings
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U.S. stocks rise on Iraq, earnings
CBS MarketWatch
U.S. stocks rise on Iraq, earnings
Tuesday July 22, 4:16 pm ET
By Steve Gelsi
NEW YORK (CBS.MW) - U.S. stocks rose Tuesday amid a series of positive earnings reports and as the government confirmed that Saddam Hussein's sons were killed by coalition troops in a firefight in Iraq.
U.S. military officials said the bodies of two men killed in a six-hour shootout in the northern city of Mosul are those of Odai and Qusai, Nos. 2 and 3 on the most wanted list following former Iraqi dictator Saddam Hussein.
"We're certain . . . they were killed today," Gen. Ricardo Sanchez said in a press conference. "The bodies are in a condition where you can identify them." He said additional details will come on Wednesday.
Word of the development prompted a reversal in blue chip stocks from negative to positive around midday. The gains held through the rest of the session as the initial reports were confirmed.
The Dow Jones Industrial Average (CBOT^DJINews) rose 61 points, or 0.7 percent, at 9,158. The Nasdaq (NasdaqSC^IXICNews) jumped 24 points, or 1.5 percent, to 1,706. The S&P 500 (CBOE^SPXNews) added 9 points, or 1 percent, to 988.
Advancing stocks outpaced decliners on the New York Stock Exchange by 19 to 14, while trading volume came in at 1.4 billion shares. On the Nasdaq, advancers led decliners by 21 to 11, with volume at 1.7 billion shares.
Chip stocks (Philadelphia^SOXXNews) rose 3.3 percent. Lehman Brothers upgraded its ratings on the sector to "positive" from "neutral" and forecasted a "gradual," uptick in business. See Ratings Game.
Airline shares (AMEX^XALNews) rallied 2.4 percent. Paper stocks (Philadelphia^FPPNews) gave up 0.2 percent. Brokerage stocks (AMEX^XBDNews) jumped 1.8 percent.
Morgan Stanley's Robert Spina confirmed that Iraq developments helped raise the market, but he advised against investing solely on that news.
Earlier, the market had been mixed as traders digested a plethora of earnings reports, as well as action on the merger front, with Lehman Brothers announcing an expected purchase of Neuberger Berman.
Texas Instruments (NYSETXNNews) fueled chip stocks with a gain of 7.7 percent to $19.25. Its net income and sales slightly surpassed targets for the quarter, but the company is still cautious. CFO Bill Aylesworth said TI remains concerned about excess inventory built up by its customers that manufacture cell phones.
Big cap stocks caught the spotlight, with Dow component General Electric (NYSEGENews) drawing a Merrill Lynch downgrade on its 2003 earnings forecast to $1.57 from $1.59 per share.
The broker said the move was "largely driven by reduced expectations for plastics and incremental adjustments for early retirement charges in the third quarter of 2003." GE shares rose 25 cents to $27.41.
Eastman Kodak (NYSEEKNews) , a component of the Dow Jones Industrial Average, shed 3.2 percent to a new 52-week low of $24.59 after Standard & Poor's cut its credit rating on the company to "BBB" -- two notches above "junk" status. The move came after Kodak said it was buying dental imaging software company PracticeWorks for $500 million in cash. Fitch Ratings affirmed its "BBB" rating -- two notches above "junk" status -- on Eastman Kodak's senior unsecured debt, but changed the outlook to "negative" from "stable."
United Parcel Service (NYSEUPSNews) fell 56 cents to $64.23 after the company reported second-quarter net income of $692 million, or 61 cents a share, up from $611 million, or 54 cents a share in the same period a year ago, and above the average analyst forecast compiled by Reuters Research of 59 cents a share. Total revenue rose 7.1 percent to $8.23 billion, topping analyst expectations of $8.12 billion.
Lehman Brothers (NYSELEHNews) said it will acquire Neuberger Berman (NYSENEUNews) in a transaction valued at about $2.625 billion as of Tuesday morning. The deal includes $42 million of in-the-money options and less $255 million in net excess cash as of June 30 and excluded 1.6 million unvested restricted shares in employee compensation plans. Under the terms of the agreement, based on Tuesday's closing stock price, each Neuberger Berman shareholder would receive an implied price of $41.48 per share consisting of $9.49 in cash and 0.496 shares of Lehman Brothers common stock. The merger had been expected for weeks.
Lehman stock fell 80 cents to $63.70 and Neuberger shares fell 29 cents to $40.15.
Overall, Wall Street is eyeing more mergers both within the financial sector and elsewhere.
Household products giant Colgate Palmolive (NYSECLNews) stock rose 30 cents to $56.60 after it reported second-quarter earnings per share that met Wall Street estimates as all its businesses recorded volume gains.
The company earned net income of $359.8 million, or 62 cents per share in the latest quarter, versus $327 million, or 55 cents per share, a year earlier. Revenue rose to $2.46 billion in the quarter, compared to $2.30 billion a year ago.
Financial sector earnings
Countrywide Financial (NYSECFCNews) shares rallied 7 percent to $70.32 after the mortgage giant reported second-quarter earnings of $2.74 per share, up from $1.48 a share last year. The company said it saw revenue in the period of $1.739 billion vs. $977.43 million. Countrywide pegged 2003 earnings in the range of $13 to $15 a share, ahead of the Wall Street estimate for earnings of $10.76 per share.
Discount Internet broker Ameritrade Holdings (NasdaqNMAMTDNews) shares jumped 14.2 percent to $9.42 after it reported third-quarter income of $49.9 million, or 12 cents a share vs. 3 cents a share a year ago. Net revenue rose to $188.5 million vs. $100.3 million a year ago. Ameritrade said it opened 93,000 new accounts in the quarter. The online broker beat the Wall Street forecast of 10 cents per share by 2 cents.
Earnings parade
After the bell on Tuesday, Amazon (NasdaqNMAMZNNews) and Siebel Systems (NasdaqNMSEBLNews) are expected to report quarterly results.
Kodak, America Online (NYSEAOLNews) and Anheuser Busch (NYSEBUDNews) are due out with their latest financial reports on Wednesday.
Don Selkin, director of equity research at Joseph Stephens, said the market appears to be stuck in a range, with traders reacting to development on individual stocks.
"The market is very neurotic this time of year," Selkin said. "We had a broad sell-off on Monday because of Lexmark and Merck. The market believes the earnings are no good. And then Lexmark is up Tuesday."
He said traditional summer weakness is taking hold of the market, and if the Dow and Nasdaq can hold onto most of their gains from earlier in the year, the stage will be set for a rally by the end of the year.
In other market action, gold futures closed at $350.70 an ounce, down 30 cents after a four-session climb. Prices touched a three-week high above $352 earlier in the session, but fell as reports that two of Saddam Hussein's sons were killed in Iraq lifted the broader stock market.
In the bond market, a 10-year Treasury note recently traded unchanged at 95 11/32 to yield (CBOE^TNXNews) 4.21, matching the December high hit in Monday's session. The yield in mid-June was at a 45-year low 3.07 percent.
Crude for August delivery fell $1.08 to trade at $30.70 a barrel on the New York Mercantile Exchange. It's the lowest level in about two weeks. September crude, which becomes the lead-month contract for futures after the session's close, fell $1.01 to $29.82 a barrel.
U.S. stocks rise on Iraq, earnings
Tuesday July 22, 4:16 pm ET
By Steve Gelsi
NEW YORK (CBS.MW) - U.S. stocks rose Tuesday amid a series of positive earnings reports and as the government confirmed that Saddam Hussein's sons were killed by coalition troops in a firefight in Iraq.
U.S. military officials said the bodies of two men killed in a six-hour shootout in the northern city of Mosul are those of Odai and Qusai, Nos. 2 and 3 on the most wanted list following former Iraqi dictator Saddam Hussein.
"We're certain . . . they were killed today," Gen. Ricardo Sanchez said in a press conference. "The bodies are in a condition where you can identify them." He said additional details will come on Wednesday.
Word of the development prompted a reversal in blue chip stocks from negative to positive around midday. The gains held through the rest of the session as the initial reports were confirmed.
The Dow Jones Industrial Average (CBOT^DJINews) rose 61 points, or 0.7 percent, at 9,158. The Nasdaq (NasdaqSC^IXICNews) jumped 24 points, or 1.5 percent, to 1,706. The S&P 500 (CBOE^SPXNews) added 9 points, or 1 percent, to 988.
Advancing stocks outpaced decliners on the New York Stock Exchange by 19 to 14, while trading volume came in at 1.4 billion shares. On the Nasdaq, advancers led decliners by 21 to 11, with volume at 1.7 billion shares.
Chip stocks (Philadelphia^SOXXNews) rose 3.3 percent. Lehman Brothers upgraded its ratings on the sector to "positive" from "neutral" and forecasted a "gradual," uptick in business. See Ratings Game.
Airline shares (AMEX^XALNews) rallied 2.4 percent. Paper stocks (Philadelphia^FPPNews) gave up 0.2 percent. Brokerage stocks (AMEX^XBDNews) jumped 1.8 percent.
Morgan Stanley's Robert Spina confirmed that Iraq developments helped raise the market, but he advised against investing solely on that news.
Earlier, the market had been mixed as traders digested a plethora of earnings reports, as well as action on the merger front, with Lehman Brothers announcing an expected purchase of Neuberger Berman.
Texas Instruments (NYSETXNNews) fueled chip stocks with a gain of 7.7 percent to $19.25. Its net income and sales slightly surpassed targets for the quarter, but the company is still cautious. CFO Bill Aylesworth said TI remains concerned about excess inventory built up by its customers that manufacture cell phones.
Big cap stocks caught the spotlight, with Dow component General Electric (NYSEGENews) drawing a Merrill Lynch downgrade on its 2003 earnings forecast to $1.57 from $1.59 per share.
The broker said the move was "largely driven by reduced expectations for plastics and incremental adjustments for early retirement charges in the third quarter of 2003." GE shares rose 25 cents to $27.41.
Eastman Kodak (NYSEEKNews) , a component of the Dow Jones Industrial Average, shed 3.2 percent to a new 52-week low of $24.59 after Standard & Poor's cut its credit rating on the company to "BBB" -- two notches above "junk" status. The move came after Kodak said it was buying dental imaging software company PracticeWorks for $500 million in cash. Fitch Ratings affirmed its "BBB" rating -- two notches above "junk" status -- on Eastman Kodak's senior unsecured debt, but changed the outlook to "negative" from "stable."
United Parcel Service (NYSEUPSNews) fell 56 cents to $64.23 after the company reported second-quarter net income of $692 million, or 61 cents a share, up from $611 million, or 54 cents a share in the same period a year ago, and above the average analyst forecast compiled by Reuters Research of 59 cents a share. Total revenue rose 7.1 percent to $8.23 billion, topping analyst expectations of $8.12 billion.
Lehman Brothers (NYSELEHNews) said it will acquire Neuberger Berman (NYSENEUNews) in a transaction valued at about $2.625 billion as of Tuesday morning. The deal includes $42 million of in-the-money options and less $255 million in net excess cash as of June 30 and excluded 1.6 million unvested restricted shares in employee compensation plans. Under the terms of the agreement, based on Tuesday's closing stock price, each Neuberger Berman shareholder would receive an implied price of $41.48 per share consisting of $9.49 in cash and 0.496 shares of Lehman Brothers common stock. The merger had been expected for weeks.
Lehman stock fell 80 cents to $63.70 and Neuberger shares fell 29 cents to $40.15.
Overall, Wall Street is eyeing more mergers both within the financial sector and elsewhere.
Household products giant Colgate Palmolive (NYSECLNews) stock rose 30 cents to $56.60 after it reported second-quarter earnings per share that met Wall Street estimates as all its businesses recorded volume gains.
The company earned net income of $359.8 million, or 62 cents per share in the latest quarter, versus $327 million, or 55 cents per share, a year earlier. Revenue rose to $2.46 billion in the quarter, compared to $2.30 billion a year ago.
Financial sector earnings
Countrywide Financial (NYSECFCNews) shares rallied 7 percent to $70.32 after the mortgage giant reported second-quarter earnings of $2.74 per share, up from $1.48 a share last year. The company said it saw revenue in the period of $1.739 billion vs. $977.43 million. Countrywide pegged 2003 earnings in the range of $13 to $15 a share, ahead of the Wall Street estimate for earnings of $10.76 per share.
Discount Internet broker Ameritrade Holdings (NasdaqNMAMTDNews) shares jumped 14.2 percent to $9.42 after it reported third-quarter income of $49.9 million, or 12 cents a share vs. 3 cents a share a year ago. Net revenue rose to $188.5 million vs. $100.3 million a year ago. Ameritrade said it opened 93,000 new accounts in the quarter. The online broker beat the Wall Street forecast of 10 cents per share by 2 cents.
Earnings parade
After the bell on Tuesday, Amazon (NasdaqNMAMZNNews) and Siebel Systems (NasdaqNMSEBLNews) are expected to report quarterly results.
Kodak, America Online (NYSEAOLNews) and Anheuser Busch (NYSEBUDNews) are due out with their latest financial reports on Wednesday.
Don Selkin, director of equity research at Joseph Stephens, said the market appears to be stuck in a range, with traders reacting to development on individual stocks.
"The market is very neurotic this time of year," Selkin said. "We had a broad sell-off on Monday because of Lexmark and Merck. The market believes the earnings are no good. And then Lexmark is up Tuesday."
He said traditional summer weakness is taking hold of the market, and if the Dow and Nasdaq can hold onto most of their gains from earlier in the year, the stage will be set for a rally by the end of the year.
In other market action, gold futures closed at $350.70 an ounce, down 30 cents after a four-session climb. Prices touched a three-week high above $352 earlier in the session, but fell as reports that two of Saddam Hussein's sons were killed in Iraq lifted the broader stock market.
In the bond market, a 10-year Treasury note recently traded unchanged at 95 11/32 to yield (CBOE^TNXNews) 4.21, matching the December high hit in Monday's session. The yield in mid-June was at a 45-year low 3.07 percent.
Crude for August delivery fell $1.08 to trade at $30.70 a barrel on the New York Mercantile Exchange. It's the lowest level in about two weeks. September crude, which becomes the lead-month contract for futures after the session's close, fell $1.01 to $29.82 a barrel.
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