Closing Update for Wednesday, July 1

4:17 PM, Jul 1, 2009 --

• NYSE up 48.9 (0.8%) to 5,954.01.
• DJIA up 57.1 (0.7%) to 8,504.
• S&P 500 up 4 (0.4%) to 923.33.
• Nasdaq up 10.7 (0.6%) to 1,846.

GLOBAL SENTIMENT

• Hang Seng down 0.81%
• Nikkei down 0.19%
• FTSE up 1.97%

UPSIDE MOVERS

(+) C sells trust unit.

(+) OSK inks $1 bln military order.

(+) GIS beats with earnings.

(+) AMAG sees continued reaction to FDA marketing approval for Feraheme.

(+) CRXX to merge with privately held Neuromed.

(+) AZN edges up as Iressa gets EU marketing approval.

(+) BORL gets raised offer to $1.50/share cash.

(+) AIG shareholders approve 1-for-20 reverse stock split.

DOWNSIDE MOVERS

(-) MYGN continues evening slide after revenue warning.

(-) FRPT and NAV decline after losing order to Oshkosh (OSK).

(-) CHKP downgraded to Neutral at JP Morgan.

(-) SKBI announces offering.

(-) ZZ sees continued selling after announcing swing to loss in Tuesday's extended hours.

(-) BEAT guides for FY results below Street view.

(-) GSIG is restating some revenue.

(-) SPPI raises $21 mln through offering.

(-) SQNM declines as SEC initiates inquiry into Down Syndrome test announcement.

MARKET DIRECTION

The major stock averages close up just under 1%, but well off the day's highs.
Stocks gained after manufacturing data showed stabilization and follows a similiarly improved situation in Europe and Asia. Investors also cheered a fourth straight monthly rise in pending home sales. Additional reports out offered a reality check on the economy. Construction spending fell more than the market expected, and the private sector lost more jobs in June than anticipated.

Investors are likely taking the data in stride for now with the monthly U.S. jobs report due on Thursday, a day earlier than normal to accommodate for closed markets on Friday for the 4th of July holiday.

The government's monthly employment report on Thursday is expected to show that companies shed 325,000 in June and the unemployment rate rose to 9.6%, according to MarketWatch.

Wall Street got a potential snapshot of that release when an ADP report before the market opened this morning showed private companies shed 473,000 jobs in June. Although that figure was more than the Reuters average estimate for 393,000, it was less than the 485,000 jobs lost in May, and investors moved back into the market, sending all three major indexes higher, with the blue chip Dow leading.

A closely followed U.S. measure of factory activity, the Institute of Supply Management's June manufacturing gauge, read 44.8 in June. That's up from 42.8 in May. A reading below 50 signifies a contraction, but the reading was higher than economists' average forecast for 44.5, according to Thomson Reuters.

Meanwhile, the Commerce Department says construction spending dropped 0.9 percent in May, nearly double the 0.5 percent decline that economists expected. Adding to the signs of weakness, activity in the past two months was revised lower.

The housing market, though, got a boost. The National Association of Realtors says that its seasonally adjusted index of pending sales increased by 0.1 percent to 90.7. Analysts expected no change, according to Thomson Reuters.

In mergers and acquisitions activity, Borland (BORL) gained after Micro Focus (MCFUF.PK) sweetened its cash offer to $1.50 per share from $1.15 per share, topping a proposal made by an unnamed bidder last week. That deal would value BORL at $113 million. Last week, BORL said in a filing that the strategic buyer had increased its offer proposal to $1.25 in cash. The company said it had opened its books to the unnamed party for due diligence.

CombinatoRx (CRXX) jumped after the company says it will merger with privately-held Neuromed in an all-stock deal.

Elsewhere, CardioNet (BEAT) is an active decliner after revising its full year 2009 revenue guidance to a range of $156 to $160 mln, below the analyst mean of $172 mln on Thomson Reuters. Adjusted EPS is seen in the range of $0.30 to $0.35 per share, vs. Street estimates of $0.66 per share.

Myriad Genetics (MYGN) continues its sharp evening slide seen after a revenue warning. The company reports total molecular diagnostic Q4 revenue of about $86 mln, which represents the bulk of the company's revenue. The Street view for total revenue is $92 mln, according to Thomson Reuters.

American Apparel (APP) fell after the government said 1,800 of the company's workers are either working illegally or are potentially illegal to work in the United States.

Oil futures reversed earlier gains. Crude inventories rose for the first week in five at a key delivery point and gasoline stockpiles increased for a third week. The data also showed last week's crude inventories fell, but the decline came in smaller than an industry group's report had showed late Tuesday.

August crude futures fell $1.60, or 2.2%, to $69.89 a barrel, after earlier rising as high as $71.85 a barrel. In electronic trading, crude has bounced on either side of even, last at $69.25 a barrel.

Comments

[Tom Shohfi:]

It terms of GSIG, it wasn't just about restating revenue today. It was about yesterday's news after the close regarding restructuring of the company's debt:

biz.yahoo.com/prnews/0...

Basically, the debt load taken on for prior acquisitions is being reduced to $95M, but current equity holders will be diluted by an astonishing 80%. The price impact of this news was much more significant than the initial revenue restatement.

Jul 01 08:01 PM