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Wall Street Closes Higher

March 23, 2013 by Leave a Comment

Strong company earnings lifted stocks on Wall Street on Friday, and investors saw a chance to add to their holdings after declines earlier in the week.

Nike reported a surge in quarterly profit, sending its stock price up 11 percent. Tiffany topped earnings predictions, helped by demand from customers in Asia.

Investors were also drawn by a pause in the market’s big run-up. The Standard Poor’s 500-stock index logged its second weekly decline of the year, despite Friday’s gains.

The damper stemmed partly from the struggles of Cyprus to devise a plan to avoid financial collapse. Stocks were also weighed down by weak sales from Oracle.

FedEx ended the week 10 percent lower after it reported a decline in quarterly profit and cut its annual earnings forecast on Wednesday. The company can be a gauge of the economy because many shoppers and businesses use its shipping services.

A resilient global economy has encouraged investors to pick up stocks on any dips, said Ron Florance, managing director of investment strategy at Wells Fargo’s Private Bank.

“We still have an astonishing amount of money sitting on the sidelines,” Mr. Florance said.

The Dow Jones industrial average rose 90.54 points, or 0.6 percent, to 14,512.03. The Standard Poor’s 500-stock index rose 11.09 points, or 0.7 percent, to 1,556.89. The Nasdaq composite gained 22.40 points, or 0.7 percent, to 3,245.

Nike shares hit a nominal high, rising $5.93, to $59.53, after the company reported a 55 percent increase in quarterly net income. Tiffany rose $1.32, or 1.9 percent, to $69.23 after posting strong fourth-quarter earnings.

The Dow shed a fraction of a percentage point this week. The S. P. 500 was 7 points, or 0.3 percent, lower than it was at the start of trading on Monday.

The S. P. index last logged a weekly decline Feb. 22, falling 0.3 percent after the release of minutes from the Federal Reserve’s January policy meeting. The minutes revealed disagreement over how long to keep buying bonds in an effort to support the economy.

Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said the market run-up may slow as the Fed faces increasing pressure to end its stimulus program.

Interest rates were steady. The Treasury’s benchmark 10-year note fell 4/32, to 100 21/32, and the yield rose to 1.92 percent from 1.91 percent late Thursday.

Among other stocks making big moves on Friday were the chip maker Micron Technology, which rose 97 cents, or 10.7 percent, to $10.04 despite reporting a loss in its fiscal second-quarter on Thursday. The company said that revenue grew 3 percent, to $2.08 billion, better than analysts had expected.

Anacor Pharmaceuticals rose $1.24, or 25.6 percent, to $6.08 on Friday after reporting strong data from a midstage study of a potential chronic rash treatment.

Marin Software rose $2.26, or 16.1 percent, to $16.26 in its market debut. The company raised $105 million in its initial public offering of stock.

AK Steel Holding fell 16 cents, or 4.6 percent, to $3.31, after projecting a larger-than-expected first-quarter loss because a previously expected seasonal increase in the demand for steel did not materialize.

Article source: http://www.nytimes.com/2013/03/23/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Business Briefing | COMPANY EARNINGS: McDonald’s Sales Rise but Fall Short of Forecasts

September 10, 2011 by Leave a Comment

McDonald’s reported a lower-than-expected rise in worldwide August sales at established restaurants, citing a steep drop in Japan and a lull in new product introductions in the United States. McDonald’s said sales at restaurants open at least 13 months rose 3.5 percent globally. Analysts surveyed by Thomson Reuters were looking for an increase of 4.3 percent. Same-restaurant sales rose 3.9 percent in the United States, just shy of analysts’ 4.0 percent expectation. In Europe, the company reported an increase of 2.7 percent, missing analysts’ estimate of a 4.7 percent increase. McDonald’s reported a 0.3 percent decline in Asia/Pacific, the Middle East and Africa, while Wall Street had forecast a rise of 3.5 percent.

Article source: http://feeds.nytimes.com/click.phdo?i=a1fb9605e7475c346dbff69693e14bdd

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Bank of America Near $8.5 Billion Deal on Mortgage Securities

June 29, 2011 by Leave a Comment

The company’s board has yet to approve the settlement, but both sides are aiming to get it done by Thursday, according to an individual close to the negotiations. The timing is intended to take place before the second quarter ends.

Bank of America stock jumped 38 cents in after-hours trading to $11.19 a share after news reports of the deal.

The issue of how much the bank would have to compensate investors in mortgage securities it had assembled has been hanging over the shares since last fall. But the company does not anticipate having to raise capital or sell stock to come up with the money for the settlement.

The settlement was less than the tens of billions some investors feared Bank of America would have to shell out, but it will wipe out all of the company earnings in the first half of this year, while heightening the risks that other banks will be sued by investors who hold securities the banks assembled from home loans that have since defaulted.

  “I think this is huge,” said Mike Mayo, a bank analyst with Credit Agricole in New York. “It’s about time the industry resolves issues from the financial crisis and focuses more on righting their companies and improving the economy. This is the most significant step since the financial crisis that helps do that.”

Last fall, analysts warned that the toll from suits by these investors and other private holders could total tens of billions of dollars, but the proposed deal would lift some of that uncertainty. The securities affected by the deal come almost entirely from Countrywide, the subprime mortgage lender whose excesses have come to symbolize the excesses of the housing boom. Bank of America bought Countrywide in 2008.

The $8.5 billion settlement represents just a portion of the bank’s total exposure to faulty mortgage bonds. Analysts say it appears to cover about $56 billion of the roughly $222 billion of troubled loans that were bundled into securities, largely by the Countrywide Financial business in acquired in early 2008.

Other huge risks from the fallout of the subprime mortgage crisis still loom — both for Bank of America and its giant peers.  All 50 state attorneys general are in the final stages of settling an investigation into abuses by the biggest mortgage servicers,  and are pressing the banks to pay up to $30 billion in fines and penalties.

What’s more, insurance companies that backed many of the soured mortgage-backed securities are also pressing for reimbursement,  arguing that the original mortgages were underwritten with false information and didn’t conform to normal standards.

Article source: http://feeds.nytimes.com/click.phdo?i=3136beb1f3a633fa460e9c4115307d62

Filed Under: Business News Tagged With: , ,