Closing Update for Wednesday, Sept. 30: September Gains, Quarter Surges

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 |  Includes: AMP, BAC, BCS, C, CFW, CIT, DIA, HBAN, ICON, QQQ, SPY, T, TGT, TSTRQ, WINT
by: Midnight Trader

4:20 PM, Sep 30, 2009 --

  • NYSE down 15.9 (0.23%) to 6,910.88.
  • DJIA down 29.9 (0.3%) to 9,712.
  • S&P 500 down 3.54 (0.3%) to 1,057.
  • Nasdaq down 1.62 (0.1%) to 2,122.


GLOBAL SENTIMENT

  • Hang Seng down 0.28%
  • Nikkei up 0.33%
  • FTSE down 0.87%


UPSIDE MOVERS

(+) DSCO establishes path with FDA for potential Surfaxin OK.

(+) TSTR inks distribution pact with AT&T.

(+) NKE continues evening gain that followed earnings beat.

(+) XOMA reports new data on antibody drug candidate.

(+) HBAN gets analyst upgrade.

(+) ACLS inks mutliple orders.

DOWNSIDE MOVERS

(-) CIT slides as report says lender about to be handed over to bondholders.

(-) TGT gets analyst downgrade.

MARKET DIRECTION

Stocks end in the red, but finish well off session lows. The Dow Jones Industrial Average is up 2.3% for the month of September and up around 15% for the third quarter. The S&P 500 is up 3.6% for the month, up 15% for the quarter. The Nasdaq ends September up 5.6% for the month and gains 15.7% for the quarter.

The major averages were jostled in two-sided trading in the wake of mixed economic data, including a much weaker-than-expected regional manufacturing gauge.

The DJIA initially fell more than 100 points after the Chicago Purchasing Managers Index came in at 46.1 not the 52 that Wall Street economists expected. But by early afternoon, buyers emerged and lifted stocks, sending the Dow up around 15 points before it resumed shallower negative trading once again.

Earlier, the government said GDP, the broadest measure of the economy, contracted at a smaller rate of 0.7% in the spring. The new reading was better than the annualized 1.1% drop that economists were predicting.

The ADP National Employment Report found that private sector employment fell by 254,000 in September following a revised loss of 277,000 jobs in August. It was the fewest jobs lost since July 2008.

The DJIA is on track to record about a 15% quarterly gain, its best three-month performance since a 17% surge in the final quarter of 1998, when the tech bubble was still intact.

The S&P 500 is down 6.6 points, or 0.7%, at 1,053, after ranging between 1,046 and 1,063. The Nasdaq Composite is down 8 points, or 0.4%, at 2,116, after ranging between 2,092 and 2,138.

Crude oil closes up 5.8% at $70.61 a barrel.

In company news, one of the most active upside movers is Discovery Laboratories (DSCO). It said it held a teleconference with the FDA and established an approach to potentially resolve the remaining primary issue that Discovery Labs must address to gain U.S. marketing approval of Surfaxin (lucinactant) to prevent Respiratory Distress Syndrome (RDS) in premature infants.

TerreStar Networks, a majority-owned subsidiary of TerreStar Corporation (TSTR), announced an agreement between TerreStar and AT&T (NYSE:T) to bring to market the first fully integrated satellite cellular smartphone.

Volume leader CIT Group (NYSE:CIT) is leading the downside. It is reportedly trying to swap debt for equity with its bondholders, a move that could wipe out shareholders. Citigroup (NYSE:C) and Barclays Capital, the investment banking division of Barclays Bank (NYSE:BCS) are offering to provide financing to the commercial lender, Bloomberg reported late Tuesday, citing people familiar with the situation. CIT's sweeping exchange offer would eliminate 30% to 40% of its more than $30 billion in debt outstanding, said people familiar with the matter, according to The Wall Street Journal.

Iconix Brand (NASDAQ:ICON) continues to hold losses after the company lowered its FY and Q3 outlooks below Street views.

In deal news, Cano Petroleum (NYSEMKT:CFW) rallies on news it will merge with Resaca Exploitation in a stock swap deal.

Ameriprise (NYSE:AMP) gains after the company says it will acquire the long-term asset management business of Columbia Management from Bank of America (NYSE:BAC) for approximately $1 billion in cash. The transaction is expected to be accretive to AMP earnings and return on equity within one year, excluding one-time integration costs. The deal is seen closing in Spring 2010.

Among leading analyst changes, Huntington Bancshares (NASDAQ:HBAN) jumps nearly 8% on an upgrade to buy from hold at Deutsche Bank. The broker also raised its price goal to $5.50 from $4. It says HBAN is "well positioned" for the longer term.

Target (NYSE:TGT) was soft on a downgrade to "neutral" from "buy" at UBS.