Investor's Business Daily, July 11th, 2007
Stocks took back some ground lost in Tuesday's heavy selling, as oil prices drifted lower.
The NYSE composite was up 0.3% at 10:53 a.m. ET. The Nasdaq was up 0.1%, weighed down by continued selling of financial stocks.
The S&P 500 and Dow rose 0.2%. Volume was mixed: slightly higher on the NYSE, down 10% on the Nasdaq.
Small- and midcap stocks also were up, generally keeping up with the major indexes' gains.
The volatile Shanghai composite rose a scant 0.3% as most other Asian markets fell. China's smaller Hang Seng index fell 1.2%. Tokyo's Nikkei 225 slipped 1.1%. In Europe, the FTSE 100 in London was down 0.1%.
Ten-year Treasury yields stood at 5.05%, 2 basis points above Tuesday's close.
Crude oil prices were off 46 cents, to $72.35 a barrel.
Rising stocks led declining issues by a narrow margin on the NYSE and Nasdaq.
Shares of paperboard maker Rock Tenn RKT jumped 3.69 in early trading to 36.27. The gap up gain bumped the stock above its 50-day moving average. It followed Tuesday's announcement that Graphic Packaging GPK planned a $1.75 billion merger with Altivity Packaging. The deal would create one of North America's largest paperboard producers and could drive heavy-grade paper and cardboard prices higher.
Rock Tenn stock has been consolidating since April. It was 17% below its April 26 high.
Wimm-Bill-Dann Foods WBD gained 3.28 to 105.29. The Russian dairy and juice producer's stock has reversed wildly in four of five recent sessions. It is 9% below its July 3 high.
Reliance Steel & Aluminum RS jumped 2.22 to 61.69. The uptick lifted shares clear off their 50-day moving average and followed news that Chaparral Steel CHAP had accepted a buyout bid from Gerdau Ameristeel, the U.S. unit of the Brazilian steel giant Gerdau. Gerdau's $4.22 billion, or $86 a share, offer represented a 14% premium to Chaparral's Tuesday close.
On the downside, Dawson Geophysical DWSN fell 2.46 to 58.69 among heavy selling in the Oil & Gas Field Services industry group. The seismic data specialist's stock has fallen in four of five sessions since notching a record high July 3. Shares were 10% below that mark.
9:15 a.m. ET Update: Futures Point To Slightly Lower Open
Choppy futures pointed to a slightly lower open on Wall Street -- Nasdaq -3.4 points vs. fair value, S&P -0.9 and Dow -13.
The major market averages all fell more than 1% in heavy volume Tuesday on a slew of housing-related warnings. That sent investors rushing into Treasuries, pushing down yields. The dollar also plunged to a record low vs. the dollar.
The selling continued overnight in Asian and European markets.
Subprime will remain in focus today. Moody's late Tuesday downgraded nearly 400 mortgage-backed securities, citing higher delinquency rates.
Earlier, S&P said it might downgrade $12 billion in subprime-related debt. Credit spreads widened sharply and shares of home lenders and investment banks sold off Tuesday.
Chaparral Steel CHAP is jumping in pre-market trading. The U.S. steel maker accepted a $4.22 billion, or $86 a share, bid from Gerdau Ameristeel, the U.S. unit of the Brazilian steel giant Gerdau. That's a 14% premium to Chaparral's Tuesday close and 34% above where it was before saying April 25 that it might put itself up for sale.
Ventana Medical VMSI was indicated slightly lower from Tuesday's close of 80.25 after the cancer diagnostics firm rejected a $3 billion takeover bid from Swiss drug giant Roche as too low. The $75-a-share offer was a 45% premium to Ventana's price at the time.
Alcan AL rose in pre-market as it talks with an unnamed third party to save the Canadian aluminum maker from a hostile bid from rival Alcoa AA. Rio Tinto RIO is seen as the most likely white knight.
Compuware CPWR sold off in pre-market after the software maker it'll miss profit and sales forecasts.
Indian IT outsourcing giant Infosys INFY reported quarterly profit jumped 35%, beating analyst forecasts. But it said a rising rupee vs. the dollar is squeezing margins. Shares look set to open modestly lower.
With oil prices near 10-11 month highs, the Energy Dept. reports U.S. petroleum stockpile data at 10:30 a.m. EDT. Also, the U.N.'s atomic watchdog agency holds high-profile talks with Iran over that country's nuke program.
A Senate panel will hold a hearing over whether to raise tax rates on at least some private equity firms. Two other panels will hold hearings on hedge funds.
After the close, biotech giant Genentech DNA and Yum Brands YUM, operator of the KFC, Pizza Hut and Taco Bell chains, are on tap to release quarterly earnings.
