Mining Deal, Earnings Lift Indexes

123jump.com Staff
29 Jul, 2008
New York City

U.S. stocks traded near high of the day after earnings from U.S. Steel, McGraw Hill, Group One Automotive and Hartford Financial Services. The deal between two Canadian mining companies Teck Cominco and Fording Canadian Coal Trust valued at $14 billion also lifted trading sentiment. However, Merrill Lynch took a surprise write down of $5.7 billion and plans to raise $8.5 billion after saying it has adequate capital only ten days ago.

[R]12:45PM New York – U.S. stocks surged ahead on better than expected earnings and the largest deal in the coal mining industry worth $14 billion.[/R]

U.S. stocks rose in the morning trading after better than expected earnings from U.S. Steel Corp, McGraw Hill and Hartford Financial Services. Canada based Teck Cominco offered $82 a share and 0.25 of its share for each unit of metallurgical coal miner Fording Coal Trust.

Fording Canadian Coal Trust ((FDG)) surged $6.21 to $88.72 after it agreed to sell to Teck Cominco for $82 in cash and 0.245 Teck Class B subordinate voting share for one unit of Fording.

The deal values the company at $92 per share or $14 billion and at 18% premium to 20-day volume weighted average price of $77.95 per share based on the New York Stock Exchange trading.

Dow Jones Industrial Average gained 176.68 or 1.4% to 11,312.40 and S&P 500 rose 50.00 or 0.77% to 2,312.62.

Stock Movers

XL Capital Limited the insurer based in Bermuda may have to raise capital and rating agencies may lower its debt rating as it faces claims worth $1.78 billion for Security Capital Assurance Limited. XL stock fell 6.4% to $17.19.

XL Capital Limited ((XL)) in the last one year traded as high as $82.10 in October 2007 and as low as $14.61 in July 2008. Based on the yesterday’s closing price the company has a market cap of $3.00 billion.

SAP AG rose 7% to $57.49 after the world’s largest business-management software developer raised its revenue and margin guidance. Moreover the second quarter license sales beat the forecasts given by analysts.

SAP AG ((SAP)) in the last one year traded as high as $59.86 in October 2007 and as low as $43.00 in January 2008. Based on the yesterday’s closing price the company has a market cap of $69.10 billion.

Zoran Corporation dropped 16.5% or $1.58 to $8.00 after the maker of integrated chip design software developer forecasted third quarter profit of 4 cents a share lower than the average analyst estimate of 28 cents.

Zoran Corporation ((ZRAN)) in the last one year traded as high as $27.45 in October 2007 and as low as $8.10 in July 2008. Based on the yesterday’s closing price the company has a market cap of $432.23 million.

S&P Movers

Of the stocks in S&P 500 index, 396 increased 97 declined and 7 remained unchanged.

XL Capital Limited led the decliners in the S&P 500 index with a loss of 9.15% or $1.68 to $16.69 followed by losses in Merrill Lynch of 6.95% or $1.69 to $22.64, in America International Group of 4.34% or $1.04 to $22.92, in Southwestern Energy of 4.00% or $1.35 to $32.42 and in Citigroup Incorporated of 3.56% or $0.62 to $16.81.

AK Steel Holdings led gainers in the S&P 500 index with a rise of 13.61% or $6.85, to $57.17 followed by increases in U.S. Steel Corporation of 11.35% or $16.50 to $161.83, in MBIA Incorporated of 6.56% or $0.28 to $4.55, in Colgate-Palmolive of 6.23% or $4.27 to $72.83 and in Plum Creek Timber of 5.34% or $2.38 to $46.97.

Dow Gainers & Losers

Of the 30 stocks in Dow Jones Industrial Average 25 stocks gained and 5 declined.

America International Group led the decliners in the Dow Jones Industrial Average with a loss of 4.59% or $1.10 to $22.86 followed by losses in Citigroup Incorporated of 3.50% or $0.61 to $16.82, in JPMorgan Chase of 0.56% or $0.21 to $37.45, in Merck and Company of 0.47% or $0.15 to $31.91, and in Exxon Mobil Corporation of 0.05% or $0.04 to $80.64.

Caterpillar Incorporated led the gainers in the Dow Jones Industrial Average index with a rise of 2.07% or $1.43 to $70.62 followed by increases in General Motors of 1.73% or $0.19 to $11.19, in Home Depot Incorporated of 1.55% or $0.36 to $23.52, in McDonalds Corporation of 1.45% or $0.84 to $58.63 and in Verizon Communication of 1.22% or $0.41 to $34.01.