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S.&P. 500 Reaches Another Record

May 6, 2013 by Leave a Comment

The Standard Poor’s 500-stock index closed at another record high Monday, pushing further above 1,600 as financial shares led the way after Bank of America’s settlement with MBIA.

Apple’s advance helped lift both the S.P. and the Nasdaq.

Bank of America said it would settle claims with MBIA for $1.6 billion, lifting shares of both companies as well as the S.P. financial sector index, which gained 1 percent. MBIA shares jumped 45.4 percent to $14.29 and Bank of America shares rose 5.2 percent to $12.88.

Apple shares were also among the top gainers after Barclays raised its price target on the stock. Apple shares shot up 2.4 percent to $460.71, leading both the Nasdaq composite index and the benchmark S.P. 500 higher.

The day’s gains followed a strong run in stocks since the start of the year. Supportive monetary policies that have kept interest rates low as well as solid earnings have helped to keep the market up. The S.P. 500 has gained 13.4 percent since Dec. 31.

“As long as you continue to have decent earnings reports and the support from central banks around the world providing liquidity, it’s going to be hard to derail this market, at least in the short term,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Dow Jones industrial average dipped 5.07 points, or 0.03 percent, to 14,968.89 at the close. But the Standard Poor’s 500 inched up 3.08 points, or 0.19 percent, to finish at a record 1,617.50. The Nasdaq composite index gained 14.34 points, or 0.42 percent, to close at 3,392.97.

During the session, the S.P. 500 also reached an all-time intraday high of 1,619.77.

Although weak economic data from the euro zone and China has caused concerns over the global growth outlook, Friday’s stronger-than-expected United States employment report fueled the gains that drove both the Dow and the S.P. 500 to record levels.

Warren Buffett, the chief of Berkshire Hathaway, said on Monday that low interest rates have made bonds “terrible” investments, but stocks are “reasonably priced,” and he continues to shy away from sectors such as media, where he cannot predict which will thrive in the long run.

But some analysts suspect the rally has little strength to keep going on.

The market “is discounting a tremendous amount of good news now, which I don’t think is going to be substantiated, and I don’t think it’s allowing for any possibility of bad news,” said Uri Landesman, president of Platinum Partners in New York.

Earnings have been mostly higher than expected, with 68.5 percent of companies surpassing estimates so far. At the same time, second-quarter estimates have fallen as outlooks remain more negative than positive.

Among Monday’s reports, Tyson Foods posted a weaker-than-expected quarterly profit and cut its full-year sales forecast. Its shares declined 3.3 percent to $24.10.

In contrast, Humana jumped 2.1 percent to $75.49 as one of the S.P. 500’s biggest percentage gainers. JPMorgan upgraded the stock to “overweight.”

But Johnson Johnson shares slid 1.3 percent to $84.68, weighing on the blue-chip Dow average.

General Motors stock also declined. The Treasury said it would begin another round of sales of G.M. stock acquired during the government’s bailout of the auto sector, and shares slipped 0.9 percent to $31.82.

Article source: http://www.nytimes.com/2013/05/07/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Stocks Rise After Solid Corporate Earnings Reports

January 22, 2013 by Leave a Comment

Strong earnings reports from big United States companies helped push the Dow Jones industrial average to its eighth gain in nine sessions on Tuesday.

DuPont, Verizon and the Travelers Companies, three of the 30 stocks that make up the Dow, closed higher after reporting their financial results for the final quarter of 2012.

The Dow closed up 62.51 points, or 0.5 percent, at 13,712.21. The Standard Poor’s 500-stock index gained 6.56 points, or 0.4 percent, to 1,492.56. The Nasdaq composite average rose 8.47 points, or 0.3 percent, to 3,143.18.

The indexes spent the morning showing small gains and losses. Around noon, the Dow rose decisively and stayed higher for the rest of the day. Earnings have been strong enough this season to drive a five-day winning streak for the S. P. 500 and put the Dow on track for its biggest monthly percentage gain since October 2011.

Jack Ablin, chief investment officer at BMO Private Bank in Chicago, said traders had been encouraged by the number of companies beating analysts’ expectations for profit. “Granted, we have diminished expectations, but companies are doing a decent job beating on the profit side,” he said. The revenue side of the equation has been weaker, Mr. Ablin said, preventing a stronger updraft for stocks. Traders might gain more confidence if companies were to report stronger demand from emerging markets and Europe, he said. “The U.S. has been pulling this wagon by itself for the last couple years, and now we’re facing some austerity measures. We could certainly use a hand,” he said.

Among the Dow components that reported early Tuesday, the chemical and bioscience company DuPont reported a sharp decline in net income on weakness in its electronics, communications and other businesses, but the results still beat analysts’ forecasts. DuPont’s stock closed up 83 cents, or 1.8 percent, at $47.82.

Johnson Johnson said higher sales helped raise its profit from a year ago, when results were weighed down by a spate of one-time charges. The company’s 2013 profit forecast, however, fell short of analysts’ estimates. The company’s share price dropped 54 cents, or 0.7 percent, to $72.69.

Shares of Verizon Communications rose after the country’s biggest wireless carrier said it activated a record number of new devices on contract-based plans in the fourth quarter. Verizon’s net loss widened on restructuring and pension costs and expenses related to the cleanup from Hurricane Sandy. Its stock rose 40 cents, or 0.9 percent, to $42.94.

A fourth member of the Dow 30, the Travelers Companies, the property and casualty insurer, rose strongly after it reported a rise in core income categories like investments and number of premiums written. Net income fell because of claims filed after Sandy. The stock rose $1.64, or 2.2 percent, to $77.95. .

The Treasury’s benchmark 10-year note slipped 1/32, to 98 2/32, and the yield finished at 1.84 percent, unchanged from late Friday.

Article source: http://www.nytimes.com/2013/01/23/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

U.S. Growth Rate Picks Up to 2%

October 29, 2012 by Leave a Comment

The pickup in spending by consumers, along with a burst of defense orders and a stronger housing market, helped the economy expand at an annual rate of 2 percent in the third quarter, a slightly better pace than had been anticipated, according to government data released Friday. In the previous quarter, economic growth had dipped to a rate of just 1.3 percent.

While growing more confident that the housing market has stabilized, households have been buoyed by lower energy prices, until recently a rising stock market and a slight improvement in employment. After years of shedding debt, there are also signs that consumers are starting to borrow again.

“Consumers are feeling wealthier so they are still out there spending,” said Joshua Dennerlein, an economist with Bank of America Merrill Lynch.

Still, the pace of economic activity is short of what’s needed to substantially reduce the unemployment rate, now at 7.8 percent and also well below the level of growth typical in this stage of a recovery after a sharp downturn.

What’s more, fears are growing that the economy could slow again in the fourth quarter. Companies are preparing for the possibility of steep tax increases and sharp spending cuts if Congress cannot agree on a deal to reduce the deficit after the election, a combination of factors frequently referred to as the fiscal cliff.

In fact, a series of disappointing earnings reports from the nation’s biggest companies this week, along with a handful of layoff announcements from corporate bellwethers, suggest businesses have already begun to retrench.

With the presidential campaign entering the final, desperate dash to Election Day, there was plenty of fodder in Friday’s report for both candidates to cite as they spar over the direction of the economy.

For President Obama, the best news was that consumer spending grew at an annual rate of 2 percent last quarter, up from 1.5 percent in the second quarter, while residential investment increased at an annual rate of 14.4 percent, compared with 8.5 percent in the second quarter.

The business snapshot was much dimmer. The report showed that business investment fell 1.3 percent, a reversal from the 3.6 percent increase recorded in the second quarter, and a sign businesses are indeed clamping down on spending ahead of the fiscal cliff.

Inventories also were a notable factor with the summer drought in the Midwest shaving overall growth 0.4 percentage point as farm inventories dropped.

In addition to the uncertainty about government policy, corporate performance has been hurt by a recession in parts of Europe and weaker demand from China. Some economists fear that all these factors will keep a lid on growth in the final quarter of 2012 and the first quarter of next year.

The Commerce Department data showed exports decreased by 1.6 percent in the latest quarter, compared with a 5.3 percent increase in the second quarter. It was the first time exports had fallen since the first quarter of 2009, when the global economy was reeling from the collapse of Lehman Brothers and the ensuing financial crisis in the United States.

At a campaign appearance in Iowa, Mitt Romney, the Republican presidential candidate, termed Friday’s report “discouraging,” adding, “slow economic growth means slow job growth and declining take-home pay.”

The new figure, released by the Commerce Department, is the government’s first estimate of growth in the third quarter. Slightly better than the 1.8 percent increase economists had been forecasting, it showed the nation rebounding to the growth it had in the first quarter of the year after a spring slump.

“The report highlights the fact that businesses have already begun to react to the looming fiscal cliff while consumers march steadily ahead,” said Mr. Dennerlein. Noting the jump in residential spending, he added that the slowly recovering housing sector is a bright spot.

Housing values and stock values certainly contribute to consumers’ sense of financial well-being. And despite the hesitancy among businesses, optimism among consumers continues to rise. A separate survey released Friday showed consumer sentiment at its highest level in more than five years, with the Thomson Reuters/University of Michigan index rising to 82.6 in October from 78.3 in September, though it was lower than a preliminary October reading of 83.1 that had been previously reported.

Article source: http://www.nytimes.com/2012/10/27/business/economy/us-economy-grew-at-2-rate-in-3rd-quarter.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Dow Barrels Ahead After Debt Remarks

July 19, 2011 by Leave a Comment

Already rallying on earnings reports, stocks leaped further ahead Tuesday after President Obama announced a breakthrough on the debt-ceiling talks.

Earlier, stocks had risen more than 1 percent after Coca-Cola said its net income rose 18 percent on higher overseas sales and after I.B.M.’s results late Monday beat analysts’ estimates.

But it was after Mr. Obama spoke that the Dow Jones industrial average powered through a gain of more than 220 points to a high of 12,607.56. The Dow ended the day up 202.26, or 1.63 percent, to 12,587.42. The broader Standard Poor’s 500-stock index rose 21.29 points, or 1.63 percent, to 1,326.73, and the technology-heavy Nasdaq composite gained 61.41, or 2.22 percent, to 2,826.52.

President Obama said there was “progress” in negotiations with bipartisan lawmakers over raising the nation’s debt ceiling, leading to a deficit-cutting proposal by a bipartisan group of lawmakers that was “broadly consistent” with what the administration was pursuing.

Earlier, the Commerce Department said housing starts in the United States rose more than expected in June, reaching a six-month high, and permits for future construction unexpectedly increased.

Investors also took in quarterly earnings announcements from three major banks: Goldman Sachs reported a profit of $1.05 billion, a relatively weak showing; Bank of America said it lost $8.8 billion, in line with expectations as it settled legal claims related to its troubled mortgage division; and Wells Fargo reported a 29 percent increase in profit, as loan losses eased.

In Europe, the FTSE 100 index of leading British shares was up 0.65 percent at 5,789.99 points, while Germany’s DAX rose 1.19 percent to 7,192.67. The CAC 40 in France was 1.21 percent higher at 3,694.95 points.

The main point of interest in Europe this week will probably be Thursday’s meeting of European Union leaders in Brussels. They are scheduled to discuss a second bailout package for Greece, which relies on such lifelines to meet its obligations.

Just two days ahead of the meeting, it remained unclear whether a mechanism whereby Greece avoids a default will be clinched. If the credit rating agencies say Greece is in default following the bailout package, then there are real worries in the markets of renewed instability.

The euro has largely managed to withstand pressures of a potential Greek default in recent weeks, and was trading 0.3 percent higher at $1.4170.

Some Asian stocks pared some of their early losses after the European open, but still ended mostly down. Japan’s Nikkei 225 stock average extended losses to decline 0.9 percent to 9,889.72 after being closed for a national holiday Monday. Hong Kong’s Hang Seng rebounded to gain 0.5 percent to 21,902.40 while mainland China’s Shanghai Composite Index fell 0.7 percent to 2,796.98.

Oil prices reached $97 a barrel amid expectations that United States crude supplies dropped last week. Benchmark oil for August delivery was up $1.48 to $97.41 a barrel in trading on the New York Mercantile Exchange.

Article source: http://www.nytimes.com/2011/07/20/business/Daily-Stock-Market-Activity.html?partner=rss&emc=rss

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Beazer Chief Is Dismissed by the Board

June 14, 2011 by Leave a Comment

Beazer Homes has fired its chief executive about three months after he agreed to give back $6.5 million in bonuses and profits from the sale of company stock in a deal with federal regulators.

The executive, Ian McCarthy, had accrued those gains at a time when investigators said the company was committing accounting fraud. He acknowledged no wrongdoing.

Allan Merrill, the company’s chief financial officer, will take over, the company said Monday.

It also announced that Robert Salomon was named executive vice president and chief financial officer. Mr. Salomon joined Beazer in 2008 as the company’s chief accounting officer.

A Beazer spokeswoman, Carey Phelps, said the company’s board dismissed Mr. McCarthy.

She said Mr. McCarthy would receive a severance package, the terms of which would soon be filed with regulators. She said Mr. McCarthy was eligible for the severance package because he was not fired “for cause,” but was replaced because the board wanted a leadership change.

Mr. McCarthy did not have a listed phone number in the Atlanta area, where Beazer is based.

The surprise announcement sent shares sliding 5 percent, or 15 cents, to $3 a share Monday.

“Our understanding is that this was not a long-planned transition and that the board had met a handful of times without management’s knowledge in order to decide what changes would be in the best interest” of shareholders, said Josh Levin, an analyst with Citi Investment Research.

Still, most analysts say they believe Mr. McCarthy’s departure is a positive.

The change should help Beazer focus on long-term growth, said David Goldberg, an analyst at UBS Investment Research.

Mr. Merrill served as chief financial officer for four years.

In 2008, Beazer restated its financial earnings reports covering the fiscal years from 2002 to 2007, according to filings with the Securities and Exchange Commission. Regulators said Beazer had inflated profits in the 2006 fiscal year by falsely recording home financing transactions and manipulating other results.

In March, the S.E.C. announced a settlement with Beazer, seeking to “claw back” cash and stock incentive payments that Mr. McCarthy earned during a period when the company’s financial reports were in error.

Article source: http://feeds.nytimes.com/click.phdo?i=d29544008393608145cbcace3265c6f9

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