Dow jumps 104 on billionaires' buys

The stock market took off this afternoon as four men with the ability to whip a stock into froth have made some of their bets public.

The Dow Jones industrials moved up nearly 104 points, 0.8%, to 13,487.53, a new closing high and its 23rd record close of the year. The Standard & Poor's 500 Index jumped nearly 13 points, 0.9%, to 1,514, and the Nasdaq Composite Index jumped 22 points, 0.9%, to 2,547.

The buying spree resulted in 26 of the 30 stocks in the Dow finishing higher, and 367 stocks in the S&P 500 closed higher.

After the close, Hewlett-Packard (HPQ, news, msgs) added more optimism to Wall Street with a strong earnings report.

Edward Lampert, the New York hedge fund manager, helped Citigroup (C, news, msgs) jump 4% to $54.91 after his firm disclosed it had acquired more than 15 million shares. Citigroup's gain was worth nearly 17 points of the Dow's gain on the day.

Not only was Citigroup the Dow leader, it was also the sixth-best performing stock in the S&P 500.

Lampert's position in Citigroup isn't especially large. CNBC's Charles Gasparino noted that Sanford Weill, Citigroup's former CEO, actually has a larger stake in the banking giant. But Lampert, chairman of Sears Holdings (SHLD, news, msgs), is known as a value investor with an activist bent. The activity in Citigroup shares suggests investors are hoping Lampert's presence in the stock will force changes to boost the stock.

Meanwhile Warren Buffett's Berkshire Hathaway (BRK.A, news, msgs) disclosed late Tuesday that it had taken a big position in railroad giant Norfolk Southern (NSC, news, msgs). Norfolk Southern was up 1.7% to $56.79 today and helped the Dow Jones Transportation Index ($TRAN) move up 1.74% to 5,215.

Berkshire Hathaway had previously disclosed big positions in Union Pacific (UNP, news, msgs) and Burlington Northern Santa Fe (BNI, news, msgs) and said there was a third position being built. That proved to be Norfolk Southern, which the market had already guessed. Burlington Northern finished up 1.5% to $91.93. Union Pacific was up 0.9% to $119.39.

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Berkshire Hathaway also disclosed it has doubled its stake in Johnson & Johnson (JNJ, news, msgs), boosting that stock up 2% to $63.05 and adding nearly 10 points to the Dow's gain.

The third man to disclose was George Soros, who doubled his stake in Microsoft (MSFT, news, msgs), the publisher of MSN Money, and added to positions in Apple (AAPL, news, msgs) and Motorola (MOT, news, msgs).

Microsoft closed up 0.6% to $31.07. Apple slipped 0.2% to $107.34, and Motorola jumped 1.7% to $18.22.

Lastly, investor Carl Icahn, who just waged an unsuccessful fight for a seat on Motorola's board, disclosed he likes railroads. He bought 2.6 million shares of CSX Corp. (CSX, news, msgs), he reported in a Securities and Exchange Commission filing. CSX rose 1.4% to $46.40.

Strong earnings push H-P shares higher

Hewlett-Packard shares were up nearly 1.5% to $45.91 in after-hours trading after the tech giant said profit increased 27% and revenue rose 13% during its second quarter.

In regular trading, the stock had finished up 1% to $45.21.

H-P said it earned 1.8 billion or 65 cents a share in the quarter, up from 48 cents a year ago. Revenue was $25.08 billion, up from $22.7 billion a year ago.

The company said its results were boosted by strong performances from its personal computer and printer businesses.

In the third quarter, H-P expects revenue to be $23.7 billion to $23.9 billion and earnings to run at 64 cents to 65 cents. Before it had projected 63 cents to 65 cents. The consensus Wall Street estimate is 65 cents.

Energy prices -- New York close

	Wed.	Tues.	Chg.	Month chg.	YTD chg.
Crude oil (NYMEX) (per barrel)	$62.55	$63.17	-$0.62	-4.81%	2.46%
Heating oil (per gallon)	$1.8670	$1.8902	-$0.0232	-2.43%	16.84%
Natural gas (per million BTU)	$7.8900	$7.8640	$0.0260	0.34%	25.26%
Unleaded gasoline (per gallon)	$2.3370	$2.3016	$0.0354	-4.24%	45.87%

Market goes for the bad news in housing

There was good news and bad news from the housing world, and the market was emphasizing the bad news.

The Commerce Department released April data on housing starts today, and things looked bright. Builders broke ground on homes at an annual rate of 1.528 million, a 2.5% increase over March's revised 1.491 million rate.

• Video: More on April's housing data

Economists had been expecting a 3% decline in starts to a seasonally adjusted annual rate of 1.47 million. That would have been the second-worst number in the past seven years.

But the bad news was building permits. A sign of future construction, permits declined nearly 9% to a 1.429 million pace, the lowest level in nearly 10 years, the Commerce Department's report said. Economists had predicted that building permits would fall 2.5% to a seasonally adjusted annual rate of 1.52 million.

"The drag from housing is going to continue for a while," James O'Sullivan, a senior economist at UBS Securities, told Bloomberg News. "The decline in permits suggests starts will weaken further."

Today's data followed a report yesterday from the National Association of Home Builders that said builder confidence had fallen back to its lowest level since September. That report, released in the afternoon, deflated what had been a strong rally in stocks.

Building stocks moved higher by the close after struggling for most of the morning. Lennar (LEN, news, msgs) was up 2.5% to $43.13. D.R. Horton (DHI, news, msgs) moved up 0.7% to 22.17. The Philadelphia Housing Sector Index ($HGX.X, news, msgs) closed up 0.6% to 228.42.The index is down 10.4% since peaking in February.

Bausch & Lomb to go private

Eye-care company Bausch & Lomb (BOL, news, msgs) was the top S&P 500 stock, rising 9.8% to $67.50 after announcing it would be acquired by private-equity firm Warburg Pincus in a $4.5 billion deal. The deal values Bausch & Lomb shares at $65 per share; shares of the stock closed yesterday at $61.50. That the stock closed above the offer price is a signal Wall Street expects the offer to be sweetened or that another offer may be coming.

The company has struggled with two massive recalls of its contact-lens solutions. In March, Bausch & Lomb recalled more than 1 million bottles of its ReNu MultiPlus solution; last year, the company pulled its ReNu MoistureLoc solution from shelves after it was linked to a serious eye disease.

Greenspan has a new job

Former Federal Reserve Chairman Alan Greenspan, whose words still weigh on the markets, has a new boss.

Greenspan has signed on to be a consultant for Allianz's (AZ, news, msgs) Pacific Investment Management, better known as Pimco. Greenspan will team up with Pimco's chief investment officer, Bill Gross, to help advise the world's biggest bond fund.

"This engagement provides Pimco with unique access and insight from the former Fed chairman, whose perspective on financial markets, global economic trends and investor behavior is truly special," Hock-Meng Foong, Pimco's Singapore office chief, told Bloomberg News.

Greenspan stepped down as head of the Fed in January 2006 after 18 years on the job, passing the baton to Ben Bernanke.

Federated chops guidance expectations

Federated Department Stores (FD, news, msgs) said it earned $36 million, or 8 cents per share, in the first quarter, up from a loss last year of $52 million, or 9 cents per share.

Sales fell, however, to $5.92 billion. Analysts had been looking for earnings of 19 cents per share and sales of $5.99 billion.

Federated shares were off 0.7% to $39.65.

• Video: Federated reports a profit

CEO Terry Lundgren said sales at the company's recently bought May Co. stores were "disappointing." Federated converted 400 May stores to Macy's in September.

"The May stores are lagging expectations for their turnaround performance," Arun Daniel, an ING Investments analyst, told Bloomberg News. "That is no secret now."

The company said second-quarter earnings will be 35 to 45 cents per share, down from a previous forecast of 40 to 45 cents per share.

Strong international sales help Deere

Heavy-machinery maker Deere (DE, news, msgs) reported a 16% decline in fiscal-second-quarter earnings. The company earned $623.6 million, or $2.72 per share, down from $744.6 million, or $3.13 per share.

But the decline was mostly due to a structural change: Last year's second-quarter earnings were helped by profit from its discontinued health-care unit.

On a continuing-operations basis, the new earnings number was higher than both last year's $517 million, or $2.17 per share, and analysts' expectations of $2.41 per share.

Deere said sales rose 5% to $6.88 billion, with equipment operations sales up 4% to $6.27 billion. Net international sales rose 22%, offsetting a 3% decline in North America. Shares closed down 1.9% to $118.40.

Applied Materials' quarter is flat; Wall St. not amused

Chip-equipment maker Applied Materials (AMAT, news, msgs) said yesterday after the close that fiscal-second-quarter income was practically flat from a year ago, and that was not what Wall Street wanted to hear. The stock closed down 3.1% to $19.17, the second-biggest percentage loss among S&P 500 stocks.

Net income came in at $411 million, or 29 cents per share this quarter; in last year's second quarter, net income was $413 million, or 26 cents per share.

Analysts had been looking for earnings of 28 cents per share.

Revenue rose 13% to $2.53 billion, thanks to demand from companies that manufacture memory chips.

Meanwhile, software provider Compuware (CPWR, news, msgs) shares were rising -- up 7.3% to $10.67 on the day -- after the company said fiscal-fourth-quarter earnings had risen 20% to $67.5 million, or 21 cents per share.

Analysts had been expecting earnings of 17 cents per share.

The stock's gain was the second-best in percentage terms among S&P 500 stocks.

Agile boosted by Oracle bid

Shares of Agile Software (AGIL, news, msgs) were zooming this afternoon -- up 12.6% to $7.97 -- after Oracle (ORCL, news, msgs) said it wants to buy Agile for $495 million in cash.

The offer represents a 14% premium to the closing price of Agile shares on Tuesday.

Oracle was up 0.8% to $18.99.

More problems for Dell

New York to Dell: Fuhgeddaboudit.

The New York state Attorney General's Office is suing the computer maker, alleging that Dell Inc. (DELL, news, msgs) engages in "fraud, false advertising and deceptive business practices," The Wall Street Journal reported today.

• Video: Small-cap or large-cap?

The state charges that Dell "denies promised rebates and fails to honor warranties and service contracts by misleading customers and making it difficult to get technical support."

Dell spokesman Bob Pearson told the newspaper: "Our customers are our top priority at Dell."

(MSN Money readers might not agree with Pearson. In an online national survey conducted by MSN Money and Zogby International last month, Dell's customer service was rated "poor" by 19% of respondents.)

The lawsuit also charges that Dell's financial-services unit has used deceptive sales practices.

The stock, however, shot up 5% to $25.92 this afternoon, tops among stocks in the Nasdaq-100 Index ($NDX.X) and third among S&P 500 stocks. A Goldman Sachs analyst said the lawsuit, which accuses Dell of deceiving customers to increase sales, is not as bad as some expected because it doesn't expand an existing Securities and Exchange Commission probe.

Short hits from the markets -- 4 p.m.

	Wed.	Tues.	Chg.	Month chg.	YTD chg.
Treasurys
13-week Treasury bill	4.610%	4.690%	-0.080	-2.43%	-5.63%
5-year Treasury note yield	4.624%	4.628%	-0.004	2.39%	-1.64%
10-year Treasury note yield	4.708%	4.712%	-0.004	1.68%	-0.04%
30-year Treasury bond yield	4.874%	4.884%	-0.010	1.18%	1.16%
Currencies
U.S. Dollar Index	82.05	81.66	0.39	0.86%	-1.65%
British pound in dollars	$1.978	$1.978	0.000	-1.11%	0.95%
Dollar in British pounds	£0.5055	£0.5055	0.0000	1.12%	-0.94%
Euro in dollars	1.3537	1.3521	0.0016	-0.80%	2.56%
Dollar in euros	€ 0.7387	€ 0.7396	-0.0009	0.81%	-2.49%
Dollar in yen	¥120.80	¥120.79	0.01	1.16%	1.50%
Commodities
Gold	$661.50	$674.50	-$13.00	-3.22%	3.68%
Copper	$3.4225	$3.5375	-$0.12	-3.77%	19.21%
Silver	$12.9300	$13.3150	-$0.39	-4.75%	-0.04%
Crude oil (NYMEX) (per barrel)	$62.55	$63.17	-$0.62	-4.81%	2.46%

By Charley Blaine and Elizabeth Strott