Stocks Break Losing Streak
Stocks broke a three-session losing streak to finish higher on Wednesday. Markets shrugged off some disappointing economic data as M&A activity continued and strong results from Oracle Corp. (ORCL) offered good news for tech stocks.
U.S. durable goods orders fell faster than expected in May. Orders fell 2.8%, vs. the 1% decline economists were expecting. It's the first decline since January.
Many traders are turning their attention to the Federal Reserve, which began a two-day meeting on Wednesday. Many assume the Fed will leave interest rates unchanged, but a key question is what statement the Fed will release at the meeting's close on Thursday.
Mark Zandi of Moody's Economy.com believes investors expect little change in policy or the policy statement. "If there are, financial markets will move quickly," he wrote this week. Policymakers may debate how to characterize core inflation, which has moderated since its peak late last year, Zandi wrote.
The Dow Jones industrial average finished 90.07 points, or 0.68%, higher at 13,427.73. The broader S&P 500 index moved up 13.46 points, or 0.9%, to 1,506.35.
The tech-heavy Nasdaq Composite index was up 31.19 points, or 1.21%, to 2,605.35. Tech stocks got a boost from Oracle earnings, Standard & Poor's says.
Stocks on the New York Stock Exchange were positive by a 25 to 8 ratio. On the Nasdaq exchange the ratio was 21 to 9 in active trading.
In energy markets Wednesday, August WTI crude oil futures were higher by $1.20 at $68.97 as the weekly Dept. of Energy inventory report showed that that crude oil stocks rose a less than expected 1.6 million barrels to 350.9 million barrels, leaving stocks well above the upper end of the average range for this time of year.
Among stocks in the news on Wednesday, Oracle reported earnings of 31 cents per share, vs. 24 cents a year ago on a 20% rise in revenue.
Best Buy (BBY) was trading higher after it announced a $5.5 billion stock buyback program and raised its quarterly dividend by 30%. The chain says the total number of stores in the U.S. eventually could approach 1,400, up from 1,000.
Nike (NKE) was up after reporting earnings of 86 cents per share, vs. 64 cents a year ago. Revenues rose 9.4%, and future orders for June to November delivery rose 12%. The shoemaker said it sees fiscal 2008 revenue growth in the high single digits. Stocks in the footwear sector moved up almost 5%, according to S&P.
Dow Jones & Co. (DJ) was reportedly close to a deal for a takeover by News Corp. (NWS).
Chittenden Corp. (CHZ) agreed to be acquired by People's United Financial (PBCT) in a stock and cash deal valued at $1.9 billion. Chittenden was up almost 25%, while People's United Financial was lower.
eFunds Corp. (EFD) agreed to be acquired by Fidelity National Information Services (FIS) in a $1.8 billion deal that includes $36.50 in cash per share, a $1.90 premium over Tuesday's closing price.
Andrew Corp. (ANDW) agreed to be acquired by Commscope Inc. (CTV) in a $2.6 billion deal. It is offering $15 in cash and stock for each Andrew share. Andrew's stock was up more than 10%.
European stock markets moved lower on Wednesday. In London, the FTSE 100 index was down 0.48% to 6,527.6. Germany's DAX index moved down 0.75% to 7,801.23. In Paris, the CAC 40 index was down 0.2% at 5,941.67.
Asian markets were down outside mainland China. In Japan, the Nikkei index was off 1.2% to 18,066.11. In Hong Kong, the Hang Seng index dropped 0.45% lower to 21,705.56. In China, the Shanghai Composite index was up 2.65% to 4,078.60.
Treasury prices were steady on Wednesday. The 10-year note was off marginally at 95-17/32 for a yield of 5.08%, while the 30-year bond was unchanged at 93-08/32 for a yield of 5.2%.
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