Paul Kangas' Stocks in the News
Wednesday, July 16, 2008
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PAUL KANGAS: Wall Street opened broadly higher as concerns about the rise in consumer prices were overcome by those falling oil prices and solid earnings from Wells Fargo bank. By 11:00 a.m., the Dow was showing a 110- point gain with the NASDAQ up 31 points. After a slight midday pullback, the market, led by the financial and airline sectors, came on strong again. Some frantic short covering added to the gains, and stocks soared to the day's best levels at the final bell. The Dow Industrial Average closed up 276.74 at 11,239.28. The NASDAQ composite vaulted 69.14 to 2,284.85, while the Standard & Poor's 500 index jumped 30.45 ending at 1,245.36. Over in the bond market, mounting inflation concerns drove treasuries lower across the board. The 10-year note tumbled 28/32 to 99 15/32, lifting the yield to 3.94 percent.
Big Board volume leader on 41.4 million shares, Bank of America (BAC). Big gain of $4.15, followed by Citigroup (C) with a nice gain of $1.88. Those gains in large part due to Wells Fargo (WFC), which was up $6.72 and reported second quarter earnings $0.03 better than expected, at $0.53 a share, and that was down from $0.67 a year ago, but the company also boosted its quarterly dividend 10 percent to $0.34 per share. A real booster shot for the banking sector was Wells Fargo.
Wachovia (WB) participated in the rally, up $1.46. Washington Mutual (WM) gaining $0.92.
Fannie Mae (FNM) did well, up $2.18. General Electric (GE) in there, with $1.03 gain, and JPMorgan Chase (JPM) up $4.92. Nice to see some good gains for a change.
Ford Motor (F) up $0.84. And Freddie Mac (FRE) had a good day rising $1.57.
Of course, the oils down for obvious reasons. Off $1.38 on Exxon Mobil (XOM). And the other Dow stock in the oil business, Chevron (CVX), fell $3.03, down to $86.39.
But what was bad for the oils was good for the airlines. AMR (AMR) up $1.41, huge percentage gains. The company reported a second quarter loss of $1.13, but the street was expecting a loss of up to $1.40. The company postponed the divestiture of American Eagle division because of the poor market conditions.
But let's have a look at some of the other airlines. They all did hugely well. Big gains. Delta (DAL) reported $0.35 in second quarter earnings, incidentally, and said it expects to merge with Northwest Air (NWA) by the end of the year. All nice gains on this board.
Alpha Natural Resources (ANR) up $10.01. Cleveland Cliffs (CLF) will acquire the company for $10 billion. It breaks down into $22.23 a share cash, and 0.95 a share of Cleveland Cliffs today. That's a value of about $121 a share for Alpha. Cleveland Cliffs tumbled $7.44 to $104.02.
CSX (CSX) up $3.60. Second quarter earnings rose to $0.93 from $0.71 last year and a 50 percent jump in revenue. Merrill Lynch upgraded it from neutral to buy.
Let's have a look at the other rails in concert. Burlington Northern (BNI), Kansas City Southern (KSU), Norfolk Southern (NSC), Union Pacific (UNP), all big gainers today.
Bluelinx Holdings (BXC) up $1.56. It's in the building products business, and it's expecting second quarter profit of $0.18 a share. It may be up to $0.24 cents, but Street was expecting a $0.23 loss. Standard & Poor's upgraded it hold to buy.
Chicago Bridge & Iron (CBI) tumbling $5.74. It will take a second quarter pre-tax charge of $2.38 a share on cost overruns due to -- that are going on in two major LNG projects in the United Kingdom.
And then we see Seagate (STX) down $2.68. Lower fourth quarter earnings $0.37 down from $0.96 a year ago, and sees the first quarter at only $0.22 to $0.26 a share.
Apple (AAPL) topped the NASDAQ actives, up $3.17, followed by Research in Motion (RIMM), up $5.15. Google (GOOG) had a big day, up $19.51. Microsoft, a $1.11 gain there. And then we see Intel (INTC) rising $0.20, helped along by yesterday's better-than-expected earnings.
$0.06 gain in Cisco (CSCO). Qualcomm (QCOM) an $0.08 rise. Baidu.com (BIDU) up $16.90. First Solar (FSLR) did well, up $11.60. And Amazon.com (AMZN) a gain of $4.81.
eBay (EBAY) up $1.21 in regular day trading. After the close, second quarter earnings, excluding items, came out at $0.43 versus $0.02 last year. Analysts estimates the company's third quarter outlook was a little disappointing, and the stock fell nearly $2 in after-hours trading.
