Friday, April 10, 2009

US Stocks: Weekly Round Up (April 6-9)

. Friday, April 10, 2009

By stockOzone team

US stocks finsihed with fifth straight weekly gain after Wells Fargo projected first quarter earnings that beat Wall Street estimates.

For the week, Dow was up 65.79 points or 0.82%. S&P rose 14.06 points or 1.67%, while Nasdaq Composite settled with a weekly gain of 30.67 points or 1.85%.

Shares of US banks skyrocketed after Wells Fargo & Co. (NYSE: WFC) announced that it expects to report first quarter profit of roughly $3 billion, or 55 cents a share.Analysts on average are currently expecting, earnings of 31 cents a share. The bank said that it expects revenue to climb roughly 16% to $20 billion. Wells Fargo is due to report its first-quarter results on April 22.

Also, life insurers gained after U.S. Treasury Department said that they are eligible for capital injections under TARP, and applications are under review. Furthermore, Lincoln National Corp. (NYSE: LNC) announced that it is paying off $700 million of debt as part of a plan that will leave it with sufficient cash for the "foreseeable future."

Meanwhile, 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.

Textron Inc. (NYSE: TXT) stocks surged up after a Kuwaiti newspaper reported that a consortium of United Arab Emirates companies and a Kuwaiti firm is close to a deal to buy US aircraft manufacturer and defense contractor.

However, Sun Microsystems (NASDAQ: JAVA) suffered a sharp slide in share prices following reports that takeover talks with International Business Machines Corp. (NYSE: IBM) has collapsed. According to sources, Sun rejected IBM's offer of about $9.40 a share as too low.

The retail space saw a lot of actvity this week. Retail giant Wal-Mart said that same-store sales in the U.S. rose 1.4%, excluding fuel. Analysts on average were looking for increase of 3.2% in same store sales. Costco Wholesale Corp. (NASDAQ: COST) reported that that its same-store sales dropped 5 percent in March due to lower gas prices and stronger dollar. Among others, Target Corp. (NYSE: TGT), JCPenney (NYSE: JCP) and Macy's Inc.(NYSE: M) reported better than expected same store sales for March.

On the other hand, Family Dollar Stores Inc. (NYSE: FDO) announced that fiscal second quarter net income jumped to $84 million, or 60 cents a share, compared to $63 million, or 45 cents a share, in the year ago period. Revenue climbed 8.7% to $2.0 billion.

Shares of Bed Bath & Beyond Inc. (NASDAQ: BBY) soared after it announced better than expected fourth quarter results. Net income for the quarter ended Feb. 28 totaled $141.4 million, or 55 cents a share, down 18% from $172.9 million, or 66 cents, in the same quarter a year ago. Revenue decreased less than 1% to $1.92 billion for the latest quarter.

Earlier in the week, Alcoa (NYSE: AA) kicked off the US earnings season on a sour note.After the closing bell on Tuesday, the largest US aluminum maker announced 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 prior year period.

Juniper Networks (NASDAQ: JNPR) announced preliminry quarterly results that were in-line with the company's prior forecast.

Late on Wednesday, Moody's Investors Service cut its credit ratings on Berkshire Hathaway Inc. (NYSE: BRK-A) from Aaa to Aa2, saying that "extraordinary market pressures have reduced the excess cushion available from National Indemnity and the other affected operations to support potential funding needs of the parent company."

The economic calendar for the week was fairly light. A release by Department of Labor on Thursday showed number of Americans filing first- time claims for unemployment benefits increased 12,000 to 669,000 in the week ending March 28. Continuing claims for the week ending March 21 climbed 161,000 to a record 5.73 million. According to Commerce Department, U.S. trade deficit narrowed to $26 billion, the smallest since 1999 as imports of goods and services declined 5.1% to $152.7 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.

Fed's most recent meeting revealed that members of the central bank’s Open Market Committee remain concerned about "downside risks to an already weak outlook for economic activity".

Meanwhile, Securities and Exchange Commission on Wednesday approved the release of five different proposals for reintroduction of uptick rule in order to curb naked short selling.

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

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