Equities Roundup: The Wizards of Oz

4:10 PM, Oct 6, 2009 --

• NYSE up 104.54 (1.5%) to 6,899.67.
• DJIA up 131.50 (1.4%) to 9,731.
• S&P 500 up 14.26 (1.4%) to 1,055.
• Nasdaq up 35.4 (1.7%) to 2,104.

GLOBAL SENTIMENT

• Hang Seng up 1.87%
• Nikkei up 0.18%
• FTSE up 2.04%

UPSIDE MOVERS

(+) NTRI continues sharp evening advance seen on pact with Wal-Mart (WMT) to sell introductory diet plan.

(+) ACAD says still committed to Pimavanserin.

(+) ALU tapped by Equinix for first carrier-neutral ethernet exchange.

(+) COF JP Morgan raises earnings view for stock.

(+) CIT in talks with Goldman to amend loan terms.

(+) AIG restarted with Neutral rating.

(+) VZ Verison Wireless, Google (GOOG) in android platform pact.

(+) AVCT sold to Emerson for $25 a share.

(+) FONR swings to FY profit.

(+) FDO gets upgrade.

DOWNSIDE MOVERS

(-) MI turns lower; reports larger-than-expected loss.

(-) CVM down as Street.com questions H1N1 flu drug.

(-) STJ guides for Q3 miss.

(-) BA details charge related to 747-8 program.

MARKET DIRECTION

Stocks and commodities gained after the Bank of Australia became the first Group of 20 central bank to raise interest rates and ahead of a fresh round of earnings reports that bulls are betting will show better revenues confirm an improving corporate climate.

Financial shares fronted broad-market gains after an upbeat analyst note Monday and are contributing again on Tuesday. CIT Group (CIT) gained on news the company is in talks with Goldman Sachs (GS) to amend the terms of a $3 billion loan, according to the Wall Street Journal. UBS has resumed coverage of AIG (AIG) with a Neutral rating and a $44 price target, according to a report on MarketWatch.

Deal news continues and remains a supportive factor for stock trading.

Emerson (EMR) and Avocent Corporation (AVCT) announced they have reached agreement for Emerson to acquire Avocent. The Avocent Board of Directors unanimously endorsed the terms of an all-cash tender offer of $25 per share, or approximately $1.2 billion.

Analyst moves also are giving some shares a boost. General Mills (GIS) firms on an upgrade to overweight from equal weight at Morgan Stanley. Family Dollar (FDO) is raised to outperform from market perform at BMO Capital, and Select Comfort (SCSS) is raised to outperform from market perform at Raymond James.

On the downside, Mannkind (MNKD) fell after the company says in a SEC filing it won't enter a marketing partnership for AFRESA before the end of 2009.

Harris & Harris (TINY) fell after it says it priced 4.25 million shares at $4.75 each in a follow-on public offering.

Crude futures finished higher, pushed up as the dollar fell after Australia's hike. Oil for November closed up $0.47, or 0.7%, to $70.88 a barrel. Earlier, the contract had topped $71 a barrel in but it pared gains as the dollar came off its lows. Gold closed at a new record of $1,039 an ounce.

Exxon Mobil (XOM) was among the leading Dow gainers.

Yum! Brands (YUM) and AngioDynamics (ANGO) are among the few companies due to report earnings after the bell.

Comments

[robert.b.fe...:]

Let's see, CIT is trying to renegotiate with Goldman on a large debt that Goldman has no incentive to agree to because they win if CIT fails. Now there is a recipe for negotiating in good faith. Couldn't CIT just ask for a bail out like all the rest of Wall Street did? Seems like the taxpayers will get it in the shorts either way.

Oct 06 05:14 PM

[Wildebeest:]

"Stocks and commodities gained after the Bank of Australia became the first Group of 20 central bank to raise interest rates and ahead of a fresh round of earnings reports that bulls are betting will show better revenues confirm an improving corporate climate."

Improved wall street banking climate maybe--profits sure to be good from trading activities--not sure about general corporate climate. The RBA is not much of a guide either. Australia had run budget surpluses for a decade prior to the crash and its housing bubble never burst. Seems like it was barely in recession.

Oct 06 05:46 PM

[bottoms-up:]

Wizard of Oz?

Don't you really mean Ben and Tim's "have it your way" ice cream?

No matter what good news or positive spin you'll want B & T will serve it up for you. Better than expected? We've got it covered for you.

But be careful, overindulgence has been known to be fatal to your economic system.

Oct 06 05:51 PM

[bottoms-up:]

Ya... But keep in mind most of those trades were "shills" for equity markets to keep things on a positive note.

Overall volume in equities has been low, save the alphabet soup that the government has their fingers in. As one article on SA pointed out, these stocks have tremendous daily volume and account for most of the trade activity.

One thing I learned early on as a child: "Consider the source."


On Oct 06 05:46 PM Wildebeest wrote:

> "Stocks and commodities gained after the Bank of Australia became
> the first Group of 20 central bank to raise interest rates and ahead
> of a fresh round of earnings reports that bulls are betting will
> show better revenues confirm an improving corporate climate."
>
> Improved wall street banking climate maybe--profits sure to be good
> from trading activities--not sure about general corporate climate.
> The RBA is not much of a guide either. Australia had run budget surpluses
> for a decade prior to the crash and its housing bubble never burst.
> Seems like it was barely in recession.

Oct 06 05:55 PM

[ebworthen:]

Hmmm...

Earnings up on what, lower dollar and higher gold?

Earnings higher on layoffs of career employees?

Earnings higher on poor outlook for holiday shopping?

How big are we going to blow this bubble before it pops?

Honestly - I'm happy making money in gold and TIPS because even if the market crashes, I'll do better than equities and money markets. If the market crashes I'll still do better than money markets, and I won't be pumping up those illicit equities - I just can't stomach giving Citi or GS or GM or AIG any more money than has already been stolen via future taxes.

Smiles :-)

Oct 06 07:59 PM

[Chaser12:]

I made more off of AIG then any other company this year. I would not touch them now though. Exxon or a comparable company I will buy all day long and sell it asap but sleep peacefully while holding. I thank AIG for the ride but do not want to gamble on it again. Happy Trading all...

Oct 06 09:48 PM

[rick12345:]

Interesting. What about GM ? Although I'm not a gambling man, I would stake a bet on AIG before the new GM any day of the week. AIG went bust because they invested huge amounts of money into an overheated market when they should have been concentrating on insurance. GM on the other hand went bust because they lacked a good business strategy in addition to a poor management team.
This is what seperates the likes of Chevron, Intel and Google from profligates and relics like Exxon, Citi or GM.

Oct 07 05:36 AM