Steel, Auto Makers Rally; Chesapeake Up 25%

Mayank Mehta
08 Dec, 2008
New York City

Stocks surged on the hopes that new administration will provide more than $600 billion in economic stimulus as early as January. Of the stocks in S&P 500 index 421 gained, 77 declined and 2 were unchanged. The 26 stocks in Dow gained and 4 declined. Infrastructure and industrials led the rally.

[R]4:10PM New York – U.S. Stocks rallied. Mining, materials, steel and auto makers lifted stocks in the index.[/R]

Stocks surged on the hopes that new administration will provide more than $600 billion in economic stimulus as early as January. Of the stocks in S&P 500 index 421 gained, 77 declined and 2 were unchanged. The 26 stocks in Dow gained and 4 declined.

AK Steel Holding Corporation ((AKS)) rose 27% or $1.93 to $9.09 after metals and commodities rose in the market rally. Alcoa, Freeport McMoran, BHP Billiton and Rio Tinto gained more than 5%. Separately AK Steel plans to cut salaries by 5% next year.

AvalonBay Communities, Inc ((AVB)) lost 3.4% or $2.30 to $64.33 after the apartment real estate investment trust was cut from market “perform” to “underperform” at Keefe, Bruyette and Woods.

Blyth, Inc ((BTH)) dropped 7.3% or 59 cents to $7.51 after the designer and marketer of home fragrance and home decor products lowered the earnings per share to be in the range of $1.00 to $1.05 for fiscal year 2009 compared to earlier guidance of $1.35 to $1.40. The company also lost $32 million in the latest quarter.

C&D Technologies, Inc ((CHP)) rose 4.1% or 10 cents to $2.51 after the manufacturer of electrical power storage systems for the standby power market reported third quarter revenues rose 3% to $93.8 million from $91.3 million a year ago. Net income in the quarter was $964,000 or 2 cents per diluted share compared to net loss of $9.3 million or 36 cents per share a year ago.

Chesapeake Energy Corporation ((CHK)) surged 29% or $3.16 to $14.48 after the producer of natural gas indicated that it will reduce capex for 2009 and 2010 to and reach cash flow breakeven. The company plans to build $4 billion in additional cash resources in 2009 and 2010 through asset sale. The company lowered in shelf registration statement number of shares to be offered from 50 million to 25 million.

Genworth Financial, Inc ((GNW)) increased 46.8% or 74 cents to $2.32 and led gainers in the S&P 500 index. The troubled financial services company has declined sharply in the last one year. Recently Moody’s lowered its credit rating on the senior debt and on primary life insurance subsidiary several notches after the company face weak profit outlook as credit crisis spreads to more industries.

The Hartford Financial Services Group, Inc ((HIG)) climbed 7.2% or $1.07 to $15.62 as financial services stocks surged. Hartford more than doubled after it revised its core earnings outlook.

Marshall & Ilsley Corporation ((MI)) fell 7.8% or $1.07 to $12.65 and the bank recently announced its plan to participate in temporary liquidity and debt program administered by the FDIC.

NYSE Euronext ((NYX)) rose 22.6% or $4.84 to $26.23 after the equities and derivatives exchange operator was reported to explore merger with Frankfurt, Germany based Deutsche Boerse.

Office Depot, Inc ((ODP)) gained 17.3% or 39 cents to $2.64 in the market rally on above average trading volume.

Wyndham Worldwide Corporation ((WYN)) gained 24.7% or $1.10 to $5.67.

United States Steel Corporation ((X)) added 26% or $7.54 to $36.29 in a rally that lifted metals and mining companies and automakers. Steelmakers gained on the expectations that the U.S. Congress will finalize its bailout of automakers as early as this evening. Ford Motor surged 25% and General Motors added 19%.