Wednesday, April 8, 2009

US Stocks Rise As Retailers, Life Insurers Rally, Centex Jumps

. Wednesday, April 8, 2009

By stockOzone team

Wall Street finished up on Wednesday after retailers reported better than expected quarterly results. Adding to the positive tone was US Treasury’s decision to extend TARP funds to few struggling life-insurance companies. Pulte Homes’ announcement of acquisition of Centex Corp. also lifted US stocks.

Earlier, Wall Street briefly turned negative during the mid session after minutes from the Fed's recently concluded meeting painted a bleak economic outlook. "Most participants viewed the downside risks as predominating in the near term," the minutes said.

The Dow Jones Industrial Average climbed 47.55 points or 0.61% to 7,837.11. The S&P 500 added 9.61 points or 1.18% to close at 825.16. The Nasdaq Composite rose 29.05 points or 1.86% to 1,590.66.

Pulte Homes Inc. (NYSE: PHA), one of the largest US homebuilder, agreed to acquire rival Centex Corp. (NYSE: CTX) in a stock-for-stock deal valued at $1.3 billion. The merger of the two companies would create the largest US homebuilder. Shares of Centex Corp. soared $1.44 or 18.90% to $9.06. Pulte Homes leaped 90 cents or 6.92% to $13.90.

Shares of life insurers advanced after U.S. Treasury Department said that they are eligible for capital injections under TARP, and applications are under review. Shares of Lincoln National Corp. (NYSE: LNC) skyrocketed $2.26 or 32.80% to $9.15. Principal Financial Group Inc. (NYSE: PFG) jumped $2.16 or 21.28% to $12.31. Hartford Financial Services Group Inc. (NYSE: HIG) rallied $1.14 or 13.49% to $9.59.

Shares of credit card lender American Express (NYSE: AXP) soared 71 cents or 4.73% to $15.72. Bank of America (NYSE: BAC) slumped 30 cents or 4.08% to $7.06 on fears that the bank may need to raise fresh capital.

Alcoa Inc. (NYSE: AA) gained 27 cents or 3.47% to $8.06. Late on Tuesday, the largest US aluminum maker reported that it swung to a first-quarter loss of $497 million, or 61 cents a share, compared to a profit of $303 million, or 37 cents a share, in the year ago period.

Securities and Exchange Commission on Wednesday approved the release of five different proposals for reinstatement of uptick rule.

Shares of retailers rallied on better than expected quarterly performance. Bed Bath & Beyond Inc. (NASDAQ: BBY) jumped 24.26% after it said that fourth quarter net income fell 18% to $141.4 million, or 55 cents a share, or 66 cents, in the previous year quarter. Revenue declined nearly 1% to $1.92 billion.

Home Depot Inc. (NYSE: HD) advanced 75 cents or 3.08% to 25.12.

Family Dollar Stores Inc. (NYSE: FDO) gained 6.03% after it said that fiscal second quarter net income rose to $84 million, or 60 cents a share, compared to $63 million, or 45 cents a share, in prior year quarter. Revenue increased 8.7% to $2.0 billion.

Constellation Brands (NYSE: STZ) fell 59 cents or 5.07% to $11.05 after it posted a narrower fiscal fourth quarter loss narrowed of $407 million, or $1.88 a share from $835 million, or $3.55 a share, in the comparable quarter last year. Revenue dropped to $965 million form $1.14 billion.

The Commerce Department said that inventories at U.S. wholesalers dropped 1.5% in February. Economists expected wholesale inventories to decline 0.7% in February.

Elsewhere, overseas markets finished mixed. European stocks were mostly higher at the end of Wednesday’s session while Asian markets finished sharply lower.

Disclosure: Author does not own any of the stocks discussed here.





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