Thursday, September 9, 4:30 PM EDT: Stocks ended mixed. Tech shares
advanced after mixed-to-upbeat reports from Texas Instruments and Nokia
prompted bargain hunting in the sector, especially chips. Elsewhere, the Dow
and S&P averages declined due in part to disappointing outlooks in the staple
and cyclical sectors, as well as rising crude oil prices. Treasury prices
declined. Looking ahead, tomorrow's trade gap and PPI data could draw
attention.
* The Nasdaq Composite Index rose 19.01 to 1869.65, while the Dow Jones
Industrial Average fell 24.26 to 10289.10. The S&P 500 Index added 2.11 to
1118.38. The 10-year Treasury note was off 8/32, yielding 4.20%.
* On the economic front, initial jobless claims dropped by 44,000 to
319,000, down from a revised 363,000 the prior week, versus expectations of
345,000. The decline was partly attributed to Hurricane Frances. Also,
wholesale inventories rose 1.3% in July, following a 1.1% increase the prior
month. A 0.6% gain had been anticipated.
* Tech shares rallied. Texas Instruments jumped, as it sees third-quarter
earnings between $0.27 and $0.29 a share, better than earlier estimates of
$0.26 to $0.29 a share, and even though its third-quarter revenue outlook is
lower.
* In addition, Nokia surged after raising its third-quarter outlook,
citing strong demand for mobile phones. Nokia now expects July-September
earnings per share of 0.11 to 0.13 euros, up from a previous 0.08 to 0.10
euros. Sales are forecast at 6.8 billion to 6.9 billion euros, up from a
previous 6.6 billion to 6.8 billion euros.
* Also, Corning reaffirmed its third-quarter revenue and earnings
estimates, while Comverse Technology was strongly higher after beating Street
estimates in its latest quarter. National Semiconductor climbed even after
foreseeing second-quarter sales falling 8% to 10% sequentially. Its first-
quarter earnings rose to $0.31 a share from last year's $0.08 a share, as
sales climbed 29%. The firm expects second-quarter gross margins of about 51%.
* On the downside, Apple Computer fell after Bear Stearns cut the stock
to "peer perform" from "outperform" in a valuation call. Separately, Remec was
down on widening second-quarter losses and news authorities are reviewing its
tax filing positions and that it has identified possible internal controls
deficiencies. Adding to the pressure, Sina.com dropped after being sanctioned
by China Mobile for inappropriate content.
* Out of the staples sector, Procter & Gamble slipped. The firm backed
its fiscal first-quarter profit outlook, but Credit Suisse First Boston
trimmed its estimates, saying it is the second consecutive mid-quarter update
in which the firm did not significantly raise guidance. Separately, the broker
cut Coca-Cola to "neutral" from "outperform," citing a "more challenging"
volume environment in North America and Europe. On the upside, Pepsi Bottling
Group backed its third-quarter and full-year guidance a day after Coca-Cola
Enterprises lowered its outlook.
* Among healthcare issues, Schering climbed after saying Bonefos has been
accepted for filing and designated for priority review by the U.S. Food and
Drug Administration. However, AstraZeneca sank after the FDA questioned the
efficacy and safety of the company's new anti-stroke pill Exanta.
* In cyclicals, Yum Brands gained after saying its third-quarter U.S.
same-store sales rose 4% from a year earlier and it is "comfortable" with
third-quarter earnings forecasts of $0.60 a share. However, Charlotte Russe
and Rent-A-Center both plunged on profit warnings, while Chico's FAS tanked on
disappointing September same-store sales.
* In resources, coal producer Massey Energy sank after saying its third-
quarter earnings will come in at the lower end of its prior forecasts due to
productivity and shipping problems. In other materials, steel stocks rocketed
after Nucor substantially raised its third-quarter guidance and announced a
stock split.
* In deal news, Verizon Communications announced plans to sell its
directory operations in Canada to Bain Capital for $1.54 billion. The
agreement is subject to regulatory approval. Also, Fidelity National Financial
will buy InterCept for about $400 million.
-- Beatrice.Denis@thomson.com; Thomson Financial Corporate Group
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