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| Currency | US Dollar |
|---|---|
| British Pound to US Dollar | 1.666111 |
| Euro to US Dollar | 1.490091 |
| Japanese Yen to US Dollar | 0.011131 |
| Canadian Dollar to US Dollar | 0.931012 |
A fall in crude oil and a big rally in technology shares today helped stocks recover just about all of their Friday losses.
Tech shares surged on buying in Electronic Data Systems (EDS, news, msgs), which jumped 28% to $24.13 before trading was halted for the day. The Wall Street Journal reported that Hewlett-Packard (HPQ, news, msgs) is about to buy the computer services company for $12 billion to $13 billion.
The Journal said terms of the deal weren't clear. Hewlett-Packard confirmed late today that the two sides were talking. An announcement may come as early as Tuesday. Trading in HP was halted as well, with the shares down 4.7% to $46.83.
The news helped the Dow Jones industrials jump 130 points, or 1%, to 12,876. The Standard & Poor's 500 Index was up 15 points, or 1.1%, to 1,404, and the Nasdaq Composite Index was up 43 points, or 1.8%, to 2,488.
Research In Motion (RIMM, news, msgs) shares added to the tech rally after the company unveiled its new BlackBerry Bold smart phone. Investors saw the new device, expected to be available this summer, as a strong competitive response to Apple's (AAPL, news, msgs) iPhone. AT&T (T, news, msgs) will be the exclusive provider in the United States.
RIMM shares were up 6.9% to $141.97 and led the Nasdaq-100 Index ($NDX.X), which gained 37 points, or 1.9% to 1,997. Apple was up 2.6% to $188.16.
- Top Stocks blog: New BlackBerry coming. IPhone who?
Research In Motion and Apple weren't the only tech shares moving higher. Microsoft (MSFT, news, msgs), Google (GOOG, news, msgs), Amazon.com (AMZN, news, msgs), eBay (EBAY, news, msgs) and Baidu.com (BIDU, news, msgs) were among the stocks pushing the Nasdaq-100 higher. (Microsoft is the publisher of MSN Money.)
Yahoo (YHOO, news, msgs) was off 2.8% to $25.19.
Crude oil drops a little -- finally
Crude oil, meanwhile, finished at $124.23 a barrel in New York, down $1.73 a barrel, or 1.4%, from Friday's record close of $125.96. It was the first decline for crude in five trading sessions. Crude traded over $126 a barrel in Friday's after-hours trading.Crude's fall today pushed many oil and gas production and services stocks lower. Apache (APA, news, msgs)was off 1.2% to $134.05.; Transocean (RIG, news, msgs), a big drilling company, fell 3.4% to $148.42. But Dow components Chevron (CVX, news, msgs) and ExxonMobil (XOM, news, msgs) were split. Chevron was off slightly to $97.36, but ExxonMobil was up 0.3% to $89.07.
A drop in the price of oil would benefit both because it would boost profit margins for their refining businesses.
In fact, independent refiners Tesoro (TSO, news, msgs) and Valero Energy (VLO, news, msgs) were up jumped 10% to $24.15 and 5.5% to $47.03, respectively. Crude prices have risen faster than refiners can raise prices to their customers.
Crude's big gain Friday was a big reason the Dow fell 120 points. Higher oil prices prompted package delivery company FedEx (FDX, news, msgs) to warn that first-quarter profit would fall as much as 20% from an already-reduced forecast. With crude's fall today, however, FedEx was up 0.3% to $90.63.
Twenty-seven of the 30 Dow stocks finished higher today, along with 432 S&P 500 stocks and 83 Nasdaq-100 stocks. Aluminum giant Alcoa (AA, news, msgs) was the Dow leader with a 6.6% gain to $41.61 on an analyst upgrade. EDS was the top S&P 500 stock.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $124.23 | $125.96 | -$1.73 | 9.49% | 29.43% |
| Heating oil (per gallon) | $3.5598 | $3.6360 | -$0.0762 | 12.05% | 34.36% |
| Natural gas (per million BTU) | $11.3010 | $11.5370 | -$0.2360 | 4.22% | 51.02% |
| Unleaded gasoline (per gallon) | $3.1642 | $3.2012 | -$0.0370 | 7.95% | 27.04% |
Wal-Mart is Tuesday's big news
Wall Street likes Wal-Mart Stores (WMT, news, msgs) again. Now we'll see if Wal-Mart can keep the love going.The retailing giant will report first-quarter earnings in the morning, with analysts expecting the retailing colossus to earn 76 cents a share on revenue of $92.8 billion.
The big trends seem to be favoring its strategy of low prices where one can buy just about anything. Consumers are looking for ways to stretch their dollars under the pressure of higher food and fuel prices and a soft economy.
The stock has been a clear winner from the turmoil of the last nine months. It's up 38% from a low in September, and its sales for April were better than Wall Street was expecting. The stock was up 2.2% today to $58.44. One reason for the gain came from Citigroup, whose analysts boosted their target for the stock to $67. Analysts raised the target "to account for greater growth and profit opportunities from the company's streamlined international operations."
Also ahead on Tuesday:
- Earnings from apparel company Liz Claiborne (LIZ, news, msgs), auto maker Nissan (NSANY, news, msgs), home builder Toll Bros. (TOL, news, msgs), French bank Societe Generale (SCGLF, news, msgs) and organic grocer Whole Foods Market (WFMI, news, msgs).
- A government report on retail sales in April. The consensus estimate is for a 0.7%, once automobile sales are excluded.
A new deal for Clear Channel
Remember the disputed $20 billion buyout for Clear Channel Communications (CCU, news, msgs)? The deal, once dead, may well be back on.Clear Channel and its banks were talking about a deal that would take the company private for $36 a share. An earlier deal had been for $39.20 a share but fell apart when the banks financing the deal wanted the terms renegotiated. The start of a trial over the dispute was stalled today while talks continued.
Stock Charts (Year)
Clear Channel Communications
American International Group
The Wall Street Journal said a settlement looked imminent, with the banks agreeing to fund the buyout at $36 a share, down from $39.20 called for in the deal.
Clear Channel shares jumped 10% to $32.87 on the news.
AIG is in 'crisis,' former boss says
Maurice "Hank" Greenberg, the former CEO of American International Group (AIG, news, msgs), has said the company is in "crisis" and called on the insurer to postpone its annual general meeting scheduled to take place later this week, according to a letter he sent to the board of directors."Several top shareholders of AIG have called me expressing deep concern about the persistent and seemingly endless destruction of value at AIG," Greenberg said in the May 11 letter to the board, a copy of which was filed with the U.S. Securities and Exchange Commission on Monday.
AIG reported a huge loss last week from the subprime mortgage crisis. The stock was down 4.7% to $38.37 and was the worst performer among the 30 Dow stocks and the S&P 500.
- MSN's Stock Challenge: Win $15,000!
British bank HSBC starts to climb back
British bank HSBC (HBC, news, msgs) said today that its first-quarter profit was better than last year's results despite the U.S. mortgage-market mess.The bank announced a charge of $3.2 billion relating to bad debt, double the $1.6 billion reported last year. But in a way that was good news, as the charge was toward the low end of expectations.
Investors liked the report, sending shares of HSBC up 3.1% to $86.68 in New York today. The company's comments added support to the argument that financial institutions are gradually getting the mortgage meltdown under control.
HSBC's results were "quite impressive, given they achieved that in fairly tough market conditions," Derek Chambers, a London-based analyst at Standard & Poor's Equity Research, told Bloomberg News.
HSBC cautioned that all isn't rosy, however.
"It seems increasingly likely that the U.S. will enter a recession in 2008, the length and depth of which is uncertain," Chairman Stephen Green said in a statement. "The timing of any recovery in the U.S. housing market, which is likely to be the primary stimulus in restoring confidence to the U.S. economy, is also unclear."
More customers leave Sprint Nextel
Sprint Nextel (S, news, msgs) this morning said it lost more than 1 million customers in the first quarter, and the company's struggles don't seem to be going away any time soon.The stock fell 1.7% to $9.22 as a result.
Sprint said it lost $505 million, or 18 cents per share, worse than the loss of $211 million, or 7 cents per share, the company reported in the same quarter a year ago. Excluding one-time items, Sprint earned 4 cents per share, better than analysts' expectations of 2 cents per share.
Although the defection of 1.07 million postpaid customers -- those who sign up for annual plans and pay each month -- was smaller than the 1.2 million expected, it nearly equaled the 1.2 million Sprint lost in all of 2007.
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Revenue fell 7.5% to $9.33 billion.
Sprint said it is also considering selling some assets, although it did not specify which ones. Last week, The Wall Street Journal said Sprint was looking for buyers for its money-losing Nextel business and was considering spinning it off.
FedEx lowers outlook
FedEx said late Friday that it expects profit of between $1.45 and $1.50 per share for the fiscal fourth quarter, down from a previous forecast of $1.60 to $1.80 per share. Analysts were expecting $1.69 per share. The company's quarter ends May 31.Stock Charts (Year)
FedEx
Fuel is FedEx's second-biggest cost. Shares were up 13 cents to $90.50.
FedEx's warning echoed that of rival United Parcel Service (UPS, news, msgs), which last month lowered its own quarterly forecast because of rising fuel costs. UPS was up 0.2% to $70.42 today.
Steep increases in fuel costs have punished the entire transportation sector, although today's drop in oil prices helped FedEx, UPS and airlines. The Dow Jones Transportation Average ($DJT), which includes FedEx and UPS, was up 1.3% to 5,260.
The Amex Airline Index ($XAL.X) was up 1.7% to 22.77. Southwest Airlines (LUV, news, msgs) was up 2.4% to $13.30.
| Fri. | Thur. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 1.750% | 1.650% | 0.100 | 30.60% | -44.27% |
| 5-year Treasury note yield | 2.980% | 2.961% | 0.019 | -1.75% | -13.75% |
| 10-year Treasury note yield | 3.775% | 3.767% | 0.008 | 0.43% | -6.44% |
| 30-year Treasury bond yield | 4.522% | 4.524% | -0.002 | 0.56% | 1.41% |
| Currencies | |||||
| U.S. Dollar Index | 73.120 | 73.225 | -0.105 | 0.55% | -4.66% |
| British pound in dollars | $1.9616 | $1.9516 | 0.0100 | -1.33% | -1.39% |
| Dollar in British pounds | £0.5098 | £0.5124 | -0.0026 | 1.35% | 1.41% |
| Euro in dollars | $1.5559 | $1.5466 | 0.0094 | -0.39% | 6.46% |
| Dollar in euros | € 0.6427 | € 0.6466 | -0.0039 | 0.39% | -6.07% |
| Dollar in yen | ¥103.66 | ¥102.98 | 0.68 | -0.26% | -7.32% |
| Canadian dollar in U.S. dollars | $0.997 | $0.994 | $0.0031 | 0.29% | 0.39% |
| U.S. dollar in Canadian dollars | $1.004 | $1.006 | -$0.0024 | -0.22% | -0.38% |
| Commodities | |||||
| Gold | $884.90 | $882.10 | -$0.90 | 2.29% | 5.60% |
| Copper | $3.7495 | $3.7165 | $0.03 | -3.97% | 23.30% |
| Silver | $17.2250 | $16.9100 | $0.32 | 3.81% | 15.45% |
| Corn | $6.1475 | $6.2925 | -$0.15 | 2.42% | 34.96% |
| Crude oil (NYMEX) (per barrel) | $124.23 | $125.96 | -$1.73 | 9.49% | 29.43% |
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