Upgrades Lift Stocks

Elena
04 Jan, 2006
New York City

Stocks opened flat on lower oil and signals that the Fed Reserve will stop raising interest rates, but later advanced on a brokerage upgrades of Google and ExxonMobil with the Nasdaq rising over 0.9%. In economic news, November factory orders rose 2.5%, following a downwardly revised increase of 1.7% in October, slightly above estimates of a 2.2% increase.

U.S. MARKET AVERAGES

Stocks slightly advanced Wednesday, reflecting a reported brokerage upgrades of Google and ExxonMobil and signals that the U.S. rate-hike cycle is close to an end.

The Dow''s biggest gainer was drugmaker Pfizer Inc. ((PFE)) jumping 2.6% to $24.38. Mutual funds bought back the stock after selling off the shares at the end of 2005 to avoid having the poor performer in their year-end holdings.

Retail and financials stocks declined on a number of ratings downgrades of companies such as home improvement retailer Lowe''s Cos. Inc. ((LOW)), and Citigroup Inc. ((C)). The largest U.S. bank was downgraded to ‘neutral’ from ‘buy’ by Banc of America Securities and fell 1% to $48.90.

The airline sector was among the best performers on the session with a gain of 2.3%. The drug and biotech groups also gained.

Alkermes ((ALKS)) extended its 52-week high, adding to gains recorded last week in the wake of its FDA approvable letter for Vivitrol. Nokia ((NOK)) also set a new high.

AsiaInfo ((ASIA)) dropped to a new 52-week low on disappointing guidance. Tuesday Morning ((TUES)) added to a recent weakness to extend its low. Jo-Ann Stores ((JAS)) also set a fresh low.

The Dow Jones industrial average was up 30.18 points, or 0.28%. The Standard & Poor''s 500 Index was up 5.66 points, or 0.45%. The technology-laced Nasdaq Composite Index was up 18.50 points, or 0.82%.

MOVERS AND SHAKERS

Bear Stearns upgraded Google ((GOOG)) to outperform from peer perform, citing confidence in the Internet search company''s long-term fundamentals and the burgeoning """"""""Google ecosystem,"""""""" which Analyst Robert Peck uses to describe Google''s growing interactive business community. Peck also raised his 2006 stock price target to $550 from $360. The stock rose 4.9%.

Greenbrier Cos ((GBX)), manufacturer of railroad freight cars, reported Q1 net earnings of 51 cents a share, up from 35 cents a year ago, despite quarterly revenue decline, beating analyst estimate of 37 cents a share. The company''s quarterly margin advanced to $32.9 million from $24.8 million. Greenbrier also set a full-year profit target range of $2.30 to $2.45 a share. The stock gained 6.1%.

Intermagnetics General Corp. ((IMG)), provider of magnetic resonance imaging products, reported Q2 profit of $6.84 million, or 24 cents a share, compared with $4.13 million, or 15 cents a share a year ago. The company said the quarter''s normalized net income was 30 cents, compared with 24 cents last year. Intermagnetics reported quarterly revenue of $78.1 million, compared with $66.2 million last year. The stock jumped 17.5%.

Lowe''s ((LOW)) fell 1.4% after it was downgraded at J.P. Morgan to neutral from overweight, citing a slowdown in home sales.

ECONOMIC NEWS

Wednesday morning, the Department of Commerce released its report on factory orders in the month of November, showing that orders rose slightly more than economists had been expecting.

The report showed that new orders for manufactured goods rose 2.5 percent in November following a downwardly revised increase of 1.7 percent in October.

Economists had expected orders to increase by 2.4 percent compared to the 2.2 percent increase originally reported for October.

The increase in factory orders reflected a 4.4 percent increase in orders for durable goods as well as a 0.4 percent increase in orders for non-durable goods.

The report also showed that shipments of manufactured goods rose 0.2 percent in November after rising 0.7 percent in October.

Inventories of manufactured goods also rose, increasing by 0.2 percent in November following a 0.6 percent increase in October.

INTERNATIONAL MARKETS NEWS

Most Asian-Pacific benchmarks closed sharply higher, boosted by export-related and tech stocks and amid speculations the Fed Reserve will stop raising interest rates. In half-day session, the Nikkei hit a new five-year peak of 1.6% to 16,361.54. Jakarta Composite surged to 2.3%, Hong Kong’s Hang Seng rose 1.7%, and China’s Shanghai Composite climbed 1.7%.

European stocks closed with solid gains after the Fed Reserve signaled that the U.S. rate-hike cycle is close to an end and oil prices slipped, reflecting the settlement of Russia-Ukraine conflict. The German DAX 30 gained 1.2%, the French CAC 40 climbed 1.3%, and London’s FTSE 100 rose 0.6%.

OIL, METALS, CURRENCIES

Crude oil prices fell from a two-month high after Russia and Ukraine resolved the gas pricing dispute between them. Light sweet crude for February delivery fell 29 cents to $62.85 a barrel. Heating oil traded at $1.80 a gallon. Gasoline shed 1 cent to $1.738 a gallon. London Brent dropped 35 cents to $61.

European gold advanced to a three-week high as the dollar weakened against the euro, increasing the appeal of the precious metal as an alternative investment. In London gold rose to $533.30 per troy ounce, up from $528.40. In Zurich the precious metal advanced to $528.10 from $516.55. In Hong Kong gold rose $14.30 to close at $534.10. Silver opened at $9.14, up from $9.03.

The U.S. dollar fell to a two-month low against the euro on disappointing economic news and speculations that interest rate hikes will cease. The euro was quoted at $1.2056, up from $1.2023. The dollar bought 116.28 yen, up from 116.03. The British pound traded at $1.7535, up from $1.7452.

EARNINGS NEWS

Greenbrier Cos, ((GBX)), manufacturer of railroad freight cars, reported Q1 net earnings of 51 cents a share, up from 35 cents in the same period last year despite quarterly revenue decline, beating analyst estimate of 37 cents a share. The company''s quarterly margin advanced to $32.9 million from $24.8 million. Greenbrier also set a full-year profit target range of $2.30 to $2.45 a share.

Monsanto Co, (( MON)), seed and agricultural chemicals company, reported Q1 net income of 22 cents a share, swinging from a loss of 15 cents a share in the year-ago period, topping analyst estimate of 19 cents a share. Sales Q1 increased 31%.

Computer Services, Inc., ((CSVI)), bank processing company, reported record revenues and net income for Q3. Q3 net income per share increased 17.6% to $0.40 compared with the same time last year. Q3 revenues increased 10.7% in comparison to the same period last year’s result. The company attributed the revenue growth to the acquisition of McCoy Myers & Associates that was effective November 1, 2005. In addition, ATTUS Technologies'' revenue growth was very strong, and the company recorded double digit growth from eBusiness and card services.