$9 Billion Deal!
Stocks
rose Monday in the best Dow rally in over two weeks,
with 28 Dow components in plus territory.
Strong ISM numbers started the day off:Â
61.4, and the first time the index has remained at this level since 1983. This
is the ninth consecutive month of growth.
The Nikkei gained 2.5%, breaking the 11,250 level.
JP Morgan downgraded Intel
(
INTC |
Quote |
Chart |
News |
PowerRating)
ahead of its mid-quarter update to neutral citing concerns over INTC’s notebook
sales and leveling off of sales as a whole. The Semiconductor Industry
Association forecasts a 19.4% worldwide sales growth in chips for 2004 and said
sales were up 27% year over year. JPM also downgraded AMD
(
AMD |
Quote |
Chart |
News |
PowerRating), as
it predicted pricing pressure from Intel over its flash memory products.
Commodities such as aluminum,
lumber, and copper, silver continue to make multi-year highs. Companies
benefiting from this boom include Phelps Dodge
(
PD |
Quote |
Chart |
News |
PowerRating), Alcoa,
(
AA |
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News |
PowerRating)
and U.S. Steel
(
X |
Quote |
Chart |
News |
PowerRating). Maytag
(
MYG |
Quote |
Chart |
News |
PowerRating), a major steel buyer, is
cutting costs to offset higher steel prices. Coal stocks were also strong
after a Barron’s article over the weekend. Platinum hit a 24-year high.
The FDA is willing to approve Sepracor’s
(
SEPR |
Quote |
Chart |
News |
PowerRating) sleeping pill if
certain conditions are met. The FDA didn’t ask for more patient testing info
which will allow SEPR to save a significant amount of time and money. SEPR is up
45% today.
Homebuilders continue to be strong, with most stocks at 52-week highs or
all-time highs. Furniture Brands
(
FBN |
Quote |
Chart |
News |
PowerRating) raised its forecast and made a
52-week high. Hovnanian
(
HOV |
Quote |
Chart |
News |
PowerRating) was inline for Q1, and raised guidance
to $9.50 for ’04.
The world’s largest miner,
BHP Billiton
(
BHP |
Quote |
Chart |
News |
PowerRating) signed a agreement with four Chinese steel companies
to provide 12 million tons of iron ore per year for the next 25 years. The deal
is worth $9 billion. BHP is based in London and its ADRs trade in the US.
Citigroup
(
C |
Quote |
Chart |
News |
PowerRating) said it
received a subpoena tied to its mutual fund practices.
SG Cowan is getting rid
of their stock ratings system, saying it is too rigid and puts companies in
pre-defined categories. They will now use plain English in their reports. The
company is also abolishing their earnings post-mortems but said it is not
dropping coverage on any stocks.
Closing arguments began in the
Martha Stewart trial.
| Dow | +94.22 |
10678.14 |
| S&P 500 |
+11.03 |
1155.97 |
| Nasdaq | +27.98 |
2057.80 |
The day’s leading sectors were
Homebuilders
(
HGX.X |
Quote |
Chart |
News |
PowerRating) +2.98%, Oil Services
(
OSX.X |
Quote |
Chart |
News |
PowerRating)
+2.80%, Energy
(
DXE.X |
Quote |
Chart |
News |
PowerRating) +2.31%, and Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating)
+2.87%.Â
Weak today were Biotechs
(
BTK.X |
Quote |
Chart |
News |
PowerRating) -0.07%.
Economic news releases included
lower personal income at 0.2%, with a 0.1% increase in personal spending at
0.4%. Construction spending fell by 0.3% and the ISM index lower at 61.4.
10-year Notes were -025
at 115 095
Dollar was +0.22 at
87.53
Gold was +0.69 at 398.82
Crude Oil was +0.69 at
36.86
Volume was
1,455,034,000
on the NYSE, and 1,681,144,000
on the Nasdaq.
Market breadth was positive.
| NYSEÂ | Issues | Â |
| Advancing | 2509 | Up Vol      1126 |
| Declining | 797 | Down Vol  253 |
| Ratio | 3.14 | 4.45 |
| Nasdaq |  |  |
| Advancing | 2168 | Up Vol     1324 |
| Declining | 1062 | Dow Vol   329 |
| Ratio | 2.04 | 4.02 |
Stocks in the news:
Cytyc
(
CYTC |
Quote |
Chart |
News |
PowerRating) announced a deal to
purchase Novacept, a maker of menorrhagia treatment system for $325 million in
cash. The deal is expected to result in a one-time $20 million charge and
positively affect the company in 2005. CYTC is up 14% on the news.
Impax
(
IPXL |
Quote |
Chart |
News |
PowerRating) received tentative
approval from the FDA to sell its generic version of allergy medicine Allegra-D
pending results of the Aventis
(
AVE |
Quote |
Chart |
News |
PowerRating) lawsuit over patent
infringement.
Universal Health Services
(
UHS |
Quote |
Chart |
News |
PowerRating)
said its first-quarter earnings may be 25% lower than a year ago due to weak
patient admissions and a rising debt expense from uninsured patients. UHS had an
EPS of 84 cents the same period a year go.UHS closed at 44.88, down 9.05.
Brice Wightman