Stock Market Wrapup May 3rd
It wasn't the strongest advance in recent sessions, but stocks recovered from a meandering start to push higher again today, helped by more upbeat economic news and the generally positive corporate profit picture for the first quarter. As has been the pattern in recent days, crude oil prices and the 10-year Treasury note moved in the opposite direction from stocks, closing lower.
Investors today were encouraged by a good report on inflation and another that showed growth in the services sector. The Labor Department's report on unit labor costs, an indicator of wage growth, rose at a scant 0.6% rate in Q1. The Institute of Supply Management, meanwhile, said its index of non-manufacturing business rose to 56.0 in April from 52.4 in March. Any reading above 50 is considered to show expansion. The Dow Jones Industrial Average marked another record close. The Dow has now risen in 22 of the last 25 sessions, making it one of the index's lengthiest bull runs in years.
The Dow's gain might have been stronger if not for longtime component General Motors (NYSE: GM - News), which reported a whopping -90% drop in Q1 profit. While its domestic auto business continues to suffer in the face of rising gas prices, profit was also hurt by weak results at its 49%-owned finance arm, GMAC, which has been hurt by the weak housing market. GM reported net income of $62 million, or 11 cents a share, compared with $602 million, or $1.06 a share, a year earlier. Excluding assorted charges related to its restructuring efforts, the car company would have earned 17 cents a share, still well short of the 87 cents a share analysts expected. Its shares declined -5.4%.
In the tech sector, increased profits reported by digital audio/video services provider RealNetworks (Nasdaq: RNWK - News) helped boost its stock 8.8%. RealNetworks reported a 60% increase in Q1 profit, driven by strong sales in its music and gaming units and the final payment from a settlement deal with Microsoft (Nasdaq: MSFT - News). The company said it would significantly increase its share repurchase program. Security software maker Symantec (Nasdaq: SYMC - News), meanwhile, rose 4.8%. Its fiscal Q4 profit fell almost -50%, but that result was nonetheless above expectations. The company was upgraded to "buy" from "hold" at Jefferies.
The sale of ABN Amro (NYSE: ABN - News) got murkier after a Dutch court blocked the bank's plan to sell is Chicago-based LaSalle National Bank subsidiary to Bank of America (NYSE: BAC - News). That transaction was to occur so that ABN could sell itself to Barclay's (NYSE: BCS - News). The court said ABN management must seek shareholder approval to sell LaSalle, making it more likely that the higher competing bid from a group led by Royal Bank of Scotland might win out.
Subprime lending woes led to a -7% profit decline at UBS (NYSE: UBS - News). The Swiss-based bank said it would shutter its Dillon Read Capital Management division, a hedge fund the bank set up in 2006 that ran up a -150 million Swiss franc loss from trading in the U.S. mortgage market.
By the BullMarket.com Staff
Investors today were encouraged by a good report on inflation and another that showed growth in the services sector. The Labor Department's report on unit labor costs, an indicator of wage growth, rose at a scant 0.6% rate in Q1. The Institute of Supply Management, meanwhile, said its index of non-manufacturing business rose to 56.0 in April from 52.4 in March. Any reading above 50 is considered to show expansion. The Dow Jones Industrial Average marked another record close. The Dow has now risen in 22 of the last 25 sessions, making it one of the index's lengthiest bull runs in years.
The Dow's gain might have been stronger if not for longtime component General Motors (NYSE: GM - News), which reported a whopping -90% drop in Q1 profit. While its domestic auto business continues to suffer in the face of rising gas prices, profit was also hurt by weak results at its 49%-owned finance arm, GMAC, which has been hurt by the weak housing market. GM reported net income of $62 million, or 11 cents a share, compared with $602 million, or $1.06 a share, a year earlier. Excluding assorted charges related to its restructuring efforts, the car company would have earned 17 cents a share, still well short of the 87 cents a share analysts expected. Its shares declined -5.4%.
In the tech sector, increased profits reported by digital audio/video services provider RealNetworks (Nasdaq: RNWK - News) helped boost its stock 8.8%. RealNetworks reported a 60% increase in Q1 profit, driven by strong sales in its music and gaming units and the final payment from a settlement deal with Microsoft (Nasdaq: MSFT - News). The company said it would significantly increase its share repurchase program. Security software maker Symantec (Nasdaq: SYMC - News), meanwhile, rose 4.8%. Its fiscal Q4 profit fell almost -50%, but that result was nonetheless above expectations. The company was upgraded to "buy" from "hold" at Jefferies.
The sale of ABN Amro (NYSE: ABN - News) got murkier after a Dutch court blocked the bank's plan to sell is Chicago-based LaSalle National Bank subsidiary to Bank of America (NYSE: BAC - News). That transaction was to occur so that ABN could sell itself to Barclay's (NYSE: BCS - News). The court said ABN management must seek shareholder approval to sell LaSalle, making it more likely that the higher competing bid from a group led by Royal Bank of Scotland might win out.
Subprime lending woes led to a -7% profit decline at UBS (NYSE: UBS - News). The Swiss-based bank said it would shutter its Dillon Read Capital Management division, a hedge fund the bank set up in 2006 that ran up a -150 million Swiss franc loss from trading in the U.S. mortgage market.
By the BullMarket.com Staff
posted by Stock Administrator @ 9:28 PM
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