Stocks Edge Up amid Housing, Merger News

An unexpected rise in existing home sales and merger speculation capped a positive week for the major indexes

Stocks finished a volatile week on a positive note, thanks to an unexpected rise in existing home sales, merger speculation and Thursday's announcement from private equity firm Blackstone Group about its plans for a $4 billion IPO. But the market is still without a clear picture as to where the economy is headed -- and if interest rates are about to rise or fall, notes Standard & Poor's MarketScope.

The Dow Jones industrial average rose 19.87 points, or 0.16%, to 12,481.01, buoyed by General Motors (GM), which was up 5.5% on enthusiasm in the auto industry over a possible buyout bid for Chrysler (DCX). The broader Standard & Poor's 500 index edged up 1.57 points, or 0.05%, to 1,436.11. The tech-heavy Nasdaq composite fell 2.81 points, or 0.11%, to 2,448.93, held down by Amgen (AMGN) after it halted trials of a cancer drug.

In the energy markets Friday, May West Texas Intermediate crude futures rose 60 cents to $62.29 a barrel. Prices jumped after Britain said Iranian naval vessels seized 15 British sailors and marines in Iraqi waters and gunmen kidnapped three foreigners in southern Nigeria, according to the Associated Press. Also, gasoline futures surged to fresh seven-month highs of $2.02 a gallon during trading Friday, notes Action Economics.

Next week, the calendar has plenty to keep trading volatile as investors look for more clarity on the economic picture, says Action Economics. On Wednesday, Fed chief Benjamin Bernanke will give testimony on the economy to the Joint Economic Committee. "Committee members are likely to grill him on the meaning of the FOMC's policy statement, especially after market (mis)interpretations," Action Economics says, adding that the housing market and subprimes are also likely to be a major issue for discussion. Economic reports includes new home sales, durable goods, personal income, consumption, and Chicago PMI.

In economic news Friday, U.S. existing home sales rose 3.9% to 6.69 million in February, rather than falling as forecasted, from a revised 6.44 million in January. "This is a third straight monthly increase that contradicts expectations for a drop in sales and calls into question the negative impact on the broader housing market from subprimes," says economic research outfit Action Economics. But the NAR said bad February weather may impact March and April sales.

In corporate news Friday, shares of Amgen (AMGN) were lower after the company discontinued treatment with its Vectibix and Avastin in clinical trials for treatment of cancer, as the drugs showed increased toxicity levels without efficacy improvement.

Jabil Circuit (JBL) lost ground after the company reported a 27% rise in second-quarter revenue, but issued forecasts for third and fourth-quarter results that fell below analyst expectations.

Billionaire investor Carl Icahn filed a proxy statement requesting Motorola (MOT) shareholders elect him to the company's board.

Nike (NKE) shared dipped after the footwear and apparel maker posted third quarter earnings per share of $1.37, vs. $1.24 one year earlier, on 9% revenue growth.

3Com (COMS) shares gained after the company reported a one-cent loss per share (GAAP basis) in its fiscal third quarter, vs. an 8 cent loss one year earlier, on an 82% revenue rise. The company received final approval from Chinese regulators to acquire Huaweic Technologies' 49% stake in the companies' H3C joint venture for $882 million.

Freddie Mac (FRE) posted a fourth-quarter loss of $480 million. The company set a $1 billion share buyback.

According to a Wall Street Journal report, a faction within Citigroup (C) is pushing its CEO to make a bid for ABN AMRO (ABN), now in exclusive takeover talks with Barclays (BCS).

European stocks moved higher Friday. In London, the FTSE 100 index was up 24.2 points, or 0.38%, to 6,342.2. In Paris, the CAC 40 index added 36.38 points, or 0.65%, to 5,634.75. Germany's DAX index gained 42.1 points, or 0.61%, to 6,899.06.

Major Asian stock indexes finished higher Friday. In Japan, the Nikkei 225 index added 61.41 points, 0.35%, to 17,480.61 after being closed Thursday for a holiday. In Hong Kong, the Hang Seng index rose 2.39 points, or 0.01%, to 19,692.64.

Treasury Market

The surprise February jump in existing home sales boosted Treasury yields, with the 10-year yield bouncing higher to 4.613%.

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