More Trouble Ahead For Merck?
A late-day rally sent stocks
higher
Wednesday. Verizon guided their capex higher–near $13 billion–
which lit a fire under telecom stocks–and the market–the last hour. Before the
open, traders had to digest several profit warnings as well as $52 oil.
Despite high oil, transportation stocks made
52-week highs, including railroads. Steel stocks were also strong, including
Schnitzer Steel
(
SCHN |
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PowerRating), which made a 52-week high.
Today’s Nasdaq close marks the 7th consecutive
up-close for the index, which also closed just above the 200-day moving average.
Knight Trading
(
NITE |
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PowerRating) warned of a quarterly loss, citing weak
trading volume. Big Lots
(
BLI |
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“disappointing.” Credence
(
CMOS |
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PowerRating) said it now expects a loss for the
quarter instead of a gain. Delphi
(
DPH |
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Tweeter
(
TWTR |
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PowerRating) guided lower.
Merck
(
MRK |
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PowerRating) is lower after The Wall
Street Journal reported that VIOXX may have been involved in more than
27,000 heart attacks and deaths before it was taken off the market, which may
indicate more legal problems for the drug maker. MRK traded down 5%.
In what is being billed as “the most important deal in radio history,” Howard
Stern signed a 5-year, $500 million deal with Sirius Satellite
(
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PowerRating)
starting in 2006. Sirius estimates fixed costs at $100 million per year; if they
get fewer than a million subscribers, there could be a material impact on the
company’s earnings. Stern will receive stock-based incentives and will share a
portion of revenues. SIRI has gained 105% in the past year.
Biogen
(
BIIB |
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PowerRating) and ImmunoGen
(
IMGN |
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PowerRating) said they are
collaborating to make an anti-cancer drug.
Henry Schein
(
HSIC |
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PowerRating) is trading higher
after being halted yesterday. HSIC is primary distributor of Fluviron; the
company slashed expectations for the quarter and for the year.
Crude oil inventories for the week of October 1 rose by 1.1 million barrels;
distillates fell by 2.1 million barrels; gasoline inventories rose by 0.6
million barrels. This is normally the time of year when gas prices fall. Crude
oil production for September came in at a 54-year low. Crude closed over $52
today.
After the close, Genentech
(
DNA |
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PowerRating)
reported
An IPO is pricing tonight: apparel manufacturer
New York & Co., between $14-$16.
| Dow | +62.24 | 10239.92 |
| S&P 500 | +2.47 | 1142.05 |
| Nasdaq | +15.53 | 1971.03 |
Strong sectors were: Oil
(
XOI.X |
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Chart |
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PowerRating) +12.64%, Cyclicals
(
CYC.X |
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PowerRating) +8.03%,
Insurance
(
IUX.X |
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PowerRating)
+5.32%.
Weak were: Drugs
(
DRG.X |
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News |
PowerRating) -2.76%.
10-year Notes were -125 at 111 300
The dollar
was +0.32 at 88.48
Gold was -0.80 at 418.
Crude Oil was +1.01 at 52.10.
1.9 billion on the Nasdaq.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 2149 | Up Vol 911 |
| Declining | 1109 | Down Vol 360 |
| Ratio | 1.93 | 2.53 |
| Nasdaq |
||
| Advancing | 1838 | Up Vol 1266 |
| Declining | 1245 | Down Vol 523 |
| Ratio | 1.47 | 2.42 |
Stocks in the News
CIBC expects General Electric’s
(
GE |
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PowerRating) Q3 profit at the low end of the
range.
Monsanto
(
MON |
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PowerRating) boosted its 2005 outlook.
Goldman Sachs said they are confident Dell
(
DELL |
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PowerRating) would achieve
their targets.
First Albany raised Apple’s
(
AAPL |
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PowerRating) target to $44 from $35.
Paychex
(
PAYX |
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PowerRating) raised its quarterly dividend to .13 from 0.12.
Apollo
(
APOL |
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PowerRating) beat by 0.04.
Credence
(
CMOS |
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PowerRating) said it now expects a loss for the quarter instead
of a gain.
Delphi
(
DPH |
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PowerRating) said it expects a wider loss.
Tweeter
(
TWTR |
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PowerRating) guided lower.
United Airlines
(
UALAQ |
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PowerRating) is cutting domestic flights in favor of
more lucrative overseas routes.
Cognos
(
COGN |
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PowerRating) will buy back 4.53 million shares.
Brice Wightman