NewsMine — economy — united-states — 2004 — 2004-june-aug — Viewing Item

US stocks give back opening gains Original Source Link: (May no longer be active)    http://biz.yahoo.com/cbsm-top/040726/18f58d3a338db001d62b70e1c2298adf_1.html http://biz.yahoo.com/cbsm-top/040726/18f58d3a338db001d62b70e1c2298adf_1.html CBS MarketWatch U.S. stocks give back opening gains Monday July 26, 10:25 am ET By Susan Lerner NEW YORK (CBS.MW) - A couple of multi-billion merger announcements helped spark stocks Monday while good economic news provided an added boost but gains were short-lived as worries about corporate earnings continued to nag investors. After opening with solid gains, the major indexes were back in the red after closing at fresh lows last week. The Dow Jones Industrial Average (^DJI - News) was last down 4 points to 9,958, after briefly topping the 10,000 level in the opening minutes of trade. Pfizer (NYSE:PFE - News) , Wal-Mart (NYSE:WMT - News) and Johnson & Johnson (NYSE:JNJ - News) were printing the biggest losses. Verizon (NYSE:VZ - News) , Honeywell (NYSE:HON - News) , Microsoft (NasdaqNM:MSFT - News) , SBC Communications (NYSE:SBC - News) and United Technologies (NYSE:UTX - News) were the Dow's biggest winners. Smith Barney upgraded United Technologies to "buy" from "hold" on the belief that the diversified industrial company's stock valuation will expand to a premium to the overall market due to its strong business mix, outstanding management and solid track record and raised its stock price target to $109 from $95. Intel was also higher. In the wake of Microsoft's move last week to return cash to shareholders, the Financial Times reported Intel (NasdaqNM:INTC - News) , too, was mulling ways to do so. The Nasdaq Composite Index (NasdaqSC:^IXIC - News) was off 3 points, or 0.2 percent, to 1,845 while the S&P 500 (CBOE:^SPX - News) dipped 1 point, or 0.1 percent, to 1,084. Abbey National (NYSE:ANL - News) , the U.K. mortgage lender, accepted a takeover offer from Spain's biggest bank, Santander Central Hispano (NYSE:STD - News) in a cash and stock deal valued at around $15 billion. Mylan Labs (NYSE:MYL - News) , meanwhile, said it would buy drugmaker King Pharmaceuticals (NYSE:KG - News) in a stock deal valued at $4 billion or $16.66 per King share. Mylan shares slumped more than 11 percent to $16.40 while King soared more than 33 percent to $13.84 in early trades. Mylan shares were downgraded at C.E. Unterberg Separately, Mylan posted first-quarter earnings that fell short of analyst expectations, one of a slew of health-care companies reporting Monday. Boston Scientific (NYSE:BSX - News) also missed expectations for the second-quarter, as did Beckman Coulter (NYSE:BEC - News) and Omnicare (NYSE:OCR - News) while second-quarter numbers from Humana (NYSE:HUM - News) and Coventry Health (NYSE:CVH - News) topped expectations and HCA Inc. (NYSE:HCA - News) matched expectations. Elsewhere in the sector, WellPoint Health Networks and Anthem fell after (NYSE:WLP - News) after their proposed $16 billion merger was vetoed by California Insurance Commissioner John Garamendi. WellPoint shares Strategists had conflicting views over the outlook for stocks after the Dow Jones Industrial Average ended the week below 10,000 for the first time in two months and the Nasdaq Composite Index closed at a near 10-month low. Merrill Lynch's Richard McCabe told clients short-term momentum indicators related to the Dow, the S&P 500 and the Nasdaq Composite are "extremely oversold" and beginning to stabilize, indicating that a "new rally phase" could develop over the short-term. "Marginal breakdowns below prior lows on the averages do not necessarily lead to substantial further weakness," McCabe said in a note to clients. "In fact, they are often anti-climactic and produce a trend reversal." But Credit Suisse First Boston's Andrew Garthwaite believes the stock market appears vulnerable to further losses. "Implied volatility remains low, the CSFB chartists' view continues to be negative, and the ratio of gainers to losers remains well above levels that have been associated with previous turning points in the markets," Garthwaite wrote in a research note. The National Association of Realtors reported that existing home sales rose 2.1 percent in June to a record 6.95 million units on a seasonally adjusted annual basis. Economists had forecast that sales would fall 2.3 percent to 6.65 million units. See Economic Report. U.S. Treasury prices slid after the data. The benchmark 10-year note fell 9/32 to 102 7/32 to yield 4.47 percent, up from 4.43 percent at Friday's close. The dollar was down 0.6 percent against Europe's shared currency, with the euro quoted at $1.2156 in morning U.S. trading. The greenback fell 0.5 percent against its Japanese counterpart, at 109.62 yen. See Currencies. Earnings watch In other earnings news, former Dow stock International Paper (NYSE:IP - News) reported second-quarter earnings of $193 million, or 40 cents a share, more than double the 19 cents a share it earned in the same period a year ago. Earnings from continuing operations, and excluding non-recurring items, earnings were 41 cents a share, above the average analyst estimate compiled by Thomson First Call of 38 cents a share. Revenue rose 6.6 percent to $6.5 billion, just shy of the $6.6 billion expected by analysts. Kellogg (NYSE:K - News) reported second-quarter earnings of 57 cents per share, besting analysts' expectations for earnings of 54 cents per share. BellSouth (NYSE:BLS - News) reported second-quarter earnings from continuing operations of 51 cents per share, up from its year-ago equivalent of 49 cents per share. On a normalized basis, including the contribution of BellSouth's 40 percent stake in Cingular, the company said it earned 51 cents per share. The average First Call estimate was for earnings of 50 cents per share. Strategy call Prudential Equity Group cut its recommended technology weighting to "underweight," citing concerns about earnings in 2005 and beyond. Quantitative strategist Edward Keon moved to a 3.2 percent underweight relative to the S&P 500 and told clients that based on the recent trend and long-term patterns of consensus forecasts, the 11 percent 2005 expected growth rate overall and 18 percent expected growth rate for tech could fall to low single-digits or worse. "We had expected slower growth from the breakneck pace of the last few quarters, and we had expected an eventual fall in the record-high level of corporate profitability, but these changes might happen more quickly than we thought a month ago," Keon said.

Att profit plummets stops residential service Consumer prices gain at slower pace in june { July 17 2004 } Consumer prices rise in may Consumer spending wanes and growth slows Defense spending helps small town jobs { May 11 2004 } Dollar declines against euro Dollar falls 3 week low versus euro Dow falls below 10k level Dow sinks to 2004 lows on oil prices hp earnings Dow strumbles on growth fears { July 24 2004 } Employment growth surprisingly weak in july { August 6 2004 } Fed boosts rate a quarter point Fed raises rates in august First quarter economic growth slows Food fuel advance consumer prices in may GM and Ford suffer sharp fall in June sales { July 1 2004 } Gold to hold above 400 this year and next { July 19 2004 } Greenspan says fed ready to act on inflation { June 8 2004 } Hourly pay not keeping up with price rises { July 18 2004 } Inflationary pressures building Price index higher than expected Report says 9 perc layoffs due to outsourcing { June 10 2004 } Stocks dip on inflation fears Stocks end lower after profit warning Stocks fall july 19 2004 Stocks fall sharply on weak job figures Stocks flat on greenspan raising interest rate worries Stocks higher on news of fed rate hike Stocks sag as oil prices steam higher Stocks tumble early aug on oil worries { August 5 2004 } Trade deficit sours US jobs growth slows down US stocks give back opening gains US trade gap widened in april to record 48b { June 14 2004 } Workers lack skills says greenspan { July 22 2004 } Files Listed: 35

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