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US Stocks Up, With Intel, Google Aiding Tech’s Strength January 4, 2007

Posted by notapundit in Economic News.
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NEW YORK (Dow Jones)–Stocks rose Thursday, with technology and biotech especially strong as Intel advanced on an analyst’s increased estimate, Google gained on an expansion accord and Amgen advanced on the prospect of upside from an anemia drug. But the upswing didn’t carry all, as wine maker Constellation Brands staggered lower.

The Dow Jones Industrial Average rose 6.17, or 0.05%, to 12480.69. The Nasdaq Composite gained 30.27, or 1.25%, to 2453.43, its biggest upward move in a month and now less than 13 points from a six-year high. The Standard & Poor’s 500 Index advanced 1.71, or 0.12%, to 1418.34.

The market has been acting a bit quirky so far into 2007. It was down for much of the session before coming back, a strong contrast to Wednesday’s big selloff after a very strong start.

“We came into the year overbought and we’ve been seeing some soft economic data,” said Bruce Bittles, chief investment strategist at RW Baird. “But bond prices firmed up midday on Thursday, which pushed yields lower, and that encouraged stock buying.”

Intel (Nasdaq) rose 82 cents, or 4%, to 21.17, the Dow industrial average’s best percentage advancer. Banc of America Securities raised estimates, saying the chip maker had better-than-expected fourth-quarter sales, with December quarter revenue likely coming in at $9.6 billion – a 10% sequential increase and near the high end of the company’s target range.

Google (Nasdaq) gained 15.67, or 3.4%, to 483.26. In a move to enhance expansion, the Internet search titan plans to offer Internet search services to some China Mobile Ltd. mobile-phone users early this year after it began a trial in December.

Amgen, the second largest U.S. biotech company by market value, behind Genentech, gained 2.93, or 4.3%, to 71.33 on the Nasdaq. Bear Stearns upgraded shares to outperform, saying the stock already reflects potential impacts from Roche’s prospective launch of a competitive anemia drug. If Roche’s drug doesn’t hit the market, the upside effect for Amgen’s stock could be “dramatic,” Bear Stearns said.

Constellation Brands pulled off a double header, winding up as the Big Board’s top two biggest percentage decliners. Class B shares dropped 3.65, or 13%, to 25.49 and Class A shares fell 3.25, or 11%, to 25.15. Earnings declined 1.1% in the fiscal third quarter, and the world’s largest wine maker by volume lowered its annual outlook amid tough competition in the U.K.

Volume on the New York Stock Exchange was 1.74 billion shares. Down volume beat up by 941 million to 774 million, and stocks that fell in value exceeded those that rose, 1,700 to 1,676.

The final Dow Jones Industrial Average close was 12480.69, up 6.17. On the New York Stock Exchange, there were 1,676, issues advancing, 1,700 declining and 118 unchanged.

NYSE volume totaled 1,774,850,940 shares, compared with 2,115,368,910 Wednesday.

The NYSE Composite Index was 9113.16, down 19.06. The average price per share fell by 14 cents.

Exxon Mobil was by far the industrial average’s weakest link, losing 1.39, or 1.9%, to 72.72 after a 3.3% decline on Wednesday. The oil titan is having a tough time gaining traction in 2007 as crude has now dropped 8.9% in the new year’s two trading days, its biggest back-to-back-decline in two years.

EBay (Nasdaq) advanced 1.42, or 4.7%, to 31.59. The Internet auctioneer announced increases to its listing fees, effective Jan. 30.

Retailers reported how they fared in December and Aeropostale was one of the group’s best advancers, rising 2.21, or 6.9%, to 34.21. Same-store sales came in ahead of analysts’ expectations, and the teen apparel retailer increased its fourth-quarter earnings forecast.

But others in the industry struggled. Limited Brands was a top Big Board percentage decliner, losing 2.23, or 7.5%, to 27.35. The parent of Victoria’s Secret and Bath & Body Works had a 4% increase, compared with its forecast for comparable-store sales rising in the high-single digits on a percentage basis.

Bebe Stores (Nasdaq) lost 1.82, or 9.5%, to 17.27. Lower-than-expected sales and higher-than-planned markdowns caused the women’s apparel retailer to cut its second-quarter earnings outlook.

BJ’s Wholesale Club lost 1.31, or 4.1%, to 30.55. The discount-warehouse retailer slashed its fiscal fourth-quarter earnings forecast, in part on lower-than-expected profit margins and soft sales, and said it will close its two ProFoods Restaurant Supply locations and 46 in-club pharmacies.

Ford Motor gained 19 cents, or 2.5%, to 7.70. Chief Executive Alan Mulally said the auto maker expects significant cooperation from its top U.S. union when the company sits down to negotiate a “more competitive” labor contract later this year.

Monsanto fell 89 cents, or 1.7%, to 50.79. Fiscal first-quarter net income rose 53% amid strong sales of corn seed and traits as well as Roundup and other herbicides. But while the biotechnology heavyweight’s sees full-year earnings per share at the high end of its previously forecast range, the projection is still below analysts’ mean estimate.

Immucor (Nasdaq) gained 2.23, or 7.4%, to 32.35. Second-quarter earnings and revenue beat Wall Street’s expectations and the blood transfusion systems company raised its per-share earnings and revenue expectations for fiscal 2007.

MSC Industrial Direct was among the NYSE’s best percentage gainers, advancing 2.43, or 6%, to 42.91. Fiscal first-quarter earnings rose 26% to $40.3 million, or 60 cents a share, and the distributor of maintenance, repair and operation supplies said net sales grew 36% to $402 million.

Sonic (Nasdaq) lost 1.27, or 5.3%, to 22.60. The drive-in restaurant operator projected full-year earnings of 92 cents to 94 cents a share, a range that was reduced 8 cents by charges related to a recent tender offer.

Advanced Medical Optics lost 1.37, or 3.8%, to 34.30. The vision product maker warned that questions from the Food and Drug Administration could spark a significant delay for a key lens offering. Investors sensed opportunity for rival Alcon and pushed its shares higher by 3.85, or 3.5%, to 113.65.

Smurfit-Stone Container (Nasdaq) lost 56 cents, or 5.1%, to 10.33. Prudential Equity Group cut the packaging company’s shares to underweight from neutral weight and slashed its price target to $9 from $15, saying cost inflation stands to offset cost initiatives more than previously expected.

RPM International rose 1.11, or 5.3%, to 21.95. Fiscal second-quarter earnings of 42 cents a share blew past the 15 cents earned last year’s, on a comparable period basis, and analysts’ projection for 33 cents, as sales at the specialty coatings and sealants maker rose 9.5% to $809.4 million.

Level 3 Communications (Nasdaq) declined 8 cents, or 1.4%, to 5.57. The broadband fiber-network operator said it completed its acquisition of Broadwing for about $744 million and 122 million common shares.

Marriott International fell 1.17, or 2.5%, to 46.17; Hilton Hotels lost 51 cents, or 1.5%, to 34.24; and Starwood Hotels & Resorts Worldwide dropped 56 cents, or almost 1%, to 61.74. Thomas Weisel Partners cut the hoteliers’ shares to underweight, seeing the potential for material downside risk if aggressive expectations are not met, and recommending limited exposure to the group.

By Karen Talley, Dow Jones Newswires

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