Closing Update for Monday, July 20

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Includes: BAC, C, CIT, GSK
by: Midnight Trader

4:12 PM, Jul 20, 2009 --

  • NYSE up 103.2 (1.7%) to 6,141.30.
  • DJIA up 104 (1.2%) to 8,848.15.
  • S&P 500 up 10.7 (1.1%) to 951.11.
  • Nasdaq up 22.7 (1.2%) to 1,909.


GLOBAL SENTIMENT

  • Hang Seng up 3.7%
  • Nikkei up 0.55%
  • FTSE up 1.31%


UPSIDE MOVERS

(+) RT turns higher after early decline on news it's selling stock.

(+) KONG says president and co-founder resigns.

(+) CIT reportedly to secure $3 billion in lending to avoid bankruptcy.

(+) HGSI soared on positive lupus study results.

(+) CSCO gets analyst upgrade.

(+) YHOO jumped on comments from board member Icahn in favor of Microsoft deal.

(+) CHINA said CDC unit expects Q2 revenue up around 50%.

(+) HEB gained ahead of Wednesday update on pandemic flu prevention.

(+) PETS beat with Q1 results.

(+) SPPI says FDA accepts responses on Zevalin for review.

(+) OREX says obesity drug meets primary and secondary endpoints in study.

(+) BBBY gets favorable Barron's coverage.

(+) HAL beats with Q2 earnings.

(+) HAS results top year-ago quarter.

(+) ETN beats with results, cuts guidance.

(+) CYTR reports positive results from pancreatic cancer drug animal trial.

DOWNSIDE MOVERS

(-) TSN got analyst downgrade.

(-) WFT missed with Q2 results.

(-) NOK downgraded at First Global.

(-) INFN cut to Underperform at Jefferies & Co.

(-) HAR denies report that Arabian Peninsula Group plans to buy company.

MARKET DIRECTION

Companies reporting quarterly scorecards in the after-hours include Texas Instruments Inc (NYSE:TXN) and Legg Mason Inc (NYSE:LM).

The major indices closed near the day's highs, each up around 1%. The DJIA has now finished higher for six straight sessions, while the Nasdaq's winning streak stretches to nine. Reports that small-business lender CIT (NYSE:CIT) will be rescued buoyed the broader market Monday. Stocks also gained after The Conference Board's index of leading economic indicators rose for a third straight month.

Stocks opened higher out of the gate, then traded in choppy fashion.

The U.S. index of leading economic indicators rose 0.7% in June, the Conference Board said this morning, providing another piece of good news for the market. Economists were looking for a 0.4% increase, according to a Thomson Reuters survey. Conference Board economist Ken Goldstein said current trends suggest "a slow recovery this autumn." But stocks moved off their highs on the news. But the increase was not as big as previous months.

CIT jumped after the retail and small business lender secured $3 billion in rescue financing from a group of bondholders. The move saves the economy from a major upheaval. More than 500,000 mostly retailers rely on CIT for financing.

Goldman Sachs (NYSE:GS) added to the morning's positive tone by raising its year-end target for the benchmark S&P 500 index to 1,060 from 940, almost a 13% from current levels. The S&P is currently around 947.

Citigroup (NYSE:C) and Bank of America (NYSE:BAC) traded mixed Monday after various analysts gave mixed outlooks for the two banks. Rochdale Securities' Richard Bove said both banks could be hurt by possible increases in loan losses, while Barclays' Jason Goldberg expects profitability to be elusive for BAC for the rest of this year, according to Reuters. Keefe Bruyette and Woods' Jefferson Harralson and Brady Gailey widened their 2009 loss forecast for BAC to $1.05 per share from $0.25, the report said. However, analysts at FBR, Barclays, Rochdale and Wells Fargo Securities expect BAC to earn between $0.45 and $0.94 per share in 2009, Reuters reports. Meanwhile, UBS analysts reversed their view to a loss of $0.10 from a prior profit view of $0.11 for C.

Human Genome Sciences Inc (HGSI) jumped after the biotechnology company said its experimental drug to treat lupus, essentially written off by Wall Street, was successful in a late-stage clinical trial.

Oil closed with modest gains, paring its earlier advance. August crude rose $0.42 to $63.98 a barrel on the New York Mercantile Exchange. The contract will expire on Tuesday. The contract had traded at $64.90. In after-hours, crude is up $0.15 at $64.13. A weaker U.S. dollar and continuing political turmoil in Iran, which according to the Energy Information Administration sits on 136.2 billion barrels of oil, influenced trading.