Housing face, hoping to lift the U.S. stock insurers

 

Thursday, Apr 09,2009, 3:08:04 PM   Click:

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NEW YORK_Wall Street began two-day slide Wednesday, investors cherry picked insurance, technology and housing stocks on pieces of good news for these industries.

But uncertainty about the weak first quarter corporate profit reports and downbeat assessment of the economy of the Federal Reserve held market gains control.

Concerns about the quarterly results and forecasts of the company for the rest of the year have shaken the market this week, the Dow Jones industrial seller, with nearly 3 percent loss during Monday and Tuesday.

But analysts also said some time-out was necessary after the Dow put in its place greater thrust four weeks since 1933. Analysts are not ready to call the end of the rally, but trading will likely remain volatile, investors are turning to corporate reports and forecasts for signs of where the economy is headed.

"We are braced for a miserable salary of the season because we did not have much advice," said Frederic H. Dickson, Chief Strategist market DA Davidson & Co. in Lake Oswego, Oregon. "We are in a process of stabilization volatile.


The Dow Jones industrial rose 47.55, or 0.6 percent, to 7837.11. The Standard & Poor's 500 rose 9.61, or 1.2 percent, to 825.16 and the Nasdaq composite index rose 29.05, or 1.9 percent, to 1590.66.

Traders jumped on a few glimmers of hope that emerged from the residential construction and insurance.

A $ 1.3 billion deal between rival Pulte Homes Inc. Centex Corp. announced Wednesday the creation of the nation's largest housing. Centex jumped 18.9 percent while 10.5 percent Pulte fell. Other houses have been mixed.

Insurers have jumped in response to a report by the Wall Street Journal in May that the government will soon provide funds to rescue the troubled insurance industry life. An announcement could come in the coming days, the Journal said. Life insurers have been hit hard by the loss of this year.

MetLife Inc rose 2.4 percent, Prudential Financial Corp. gained 7.7 percent and Hartford Financial Services Group Inc. added 13.5 percent.

Technology stocks showed some of the greatest progress in encouraging following a forecast of Juniper Networks Inc. The maker of networking equipment said its first quarter earnings should meet forecasts even though sales will probably fall short of expectations. Its share jumped 12 percent.

Cisco Systems Inc. added 1.7 percent, while Microsoft Corp. rose 2.3 per cent.

Some news companies weighed on the market. Ryder System Inc. fell $ 5.31, or 18 percent, to $ 24.25 after the truck rental and logistics, lowered its first quarter earnings projection. The company said the weak economy has weakened demand.

One of the analysts evaluating Bank of America Corp. corralled most financial stocks. Oppenheimer & Co. The report, which does not agree with the company, according to forecasts, the Bank of America will be more 36.6 billion dollars in capital. The stock lost 30 cents, or 4.1 percent, to $ 7.06. It was the biggest drag among the 30 stocks that make up the Dow industrial.

Some investors are hopeful that the regulations will soon move to curb short selling, in which traders try to profit from a stock to decline by buying and selling of borrowed shares back at a lower price.

SEC commissioners voted to certain proposals to open public debate. The group could settle on a short-selling among the five proposed and formally approve it some time after a period of 60 days of the period.

The day also mixed economic news. The Commerce Department said stocks trimmed their wholesalers in February by the largest amount in more than 17 years. But sales have increased for the first time since the summer. The data indicates that companies can receive their inventory under control.


Federal Reserve policy makers, facing the danger of a deepening recession, decided at their meeting in March to $ 1.2 trillion of snow in the economy to bring down interest rates and encourage Americans to buy again. Minutes of the meeting revealed a growing concern about an economic vicious cycle in which rising unemployment would reduce consumer spending, possibly by 2010.

Investors became more optimistic in recent weeks as some economic readings were not as bad as expected and that world governments have pledged to fight against recession. Before Monday, the Dow rose more than 20 percent from a low of 12 in early March. Stocks fell earlier this week, investors fear that lower than expected and estimated revenue could disrupt the rally.

Late Tuesday, the aluminum manufacturer Alcoa Inc. said it lost nearly half a billion dollars in the first quarter, more than analysts had expected. Many saw the report as a sign of saddest of future results.

In other trading Wednesday, the Russell 2000 index of smaller companies rose 10.42, or 2.4 percent, to 442.12.

About three stocks rose for everyone who fell on the New York Stock Exchange where volume was a light 1.32 billion shares.