COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

S&P 500 caps longest rally since March on economic reports

By , Executive Editor

Investors stayed mostly on the sidelines for the second consecutive day, and the markets were little changed.

The Dow Jones Industrial Average snapped a four-session winning streak, down 10.45 points to 13,165.19. The Nasdaq Composite Index held on to a gain of 7.39 points to 3,018.64, and the S&P 500 Stock Index was up less than a point to 1,402.80.

The Department of Labor reported that initial claims for jobless benefits fell 6,000 to 361,000.

Commodities also were little changed. Oil gained a penny to $93.36 a barrel despite news that oil installations in Mexico were being closed as tropical storm Ernesto moved into the area. Gold added $4.20 to $1,620.20 an ounce.

A measure of homebuilders in S&P indexes advanced 2.3 percent as JPMorgan Chase & Co. (NYSE: JPM) said it saw higher demand in the industry and data showed prices for single-family homes rose in most U.S. cities last quarter. E*Trade Financial Corp. (Nasdaq: ETFC) increased 6.9 percent as Chief Executive Officer Steven Freiberg was ousted from the brokerage. Monster Beverage Corp. (Nasdaq: MNST) declined 9.7 percent after profit and sales trailed estimates.

“We acknowledge the positive news,” said Wayne Lin, a money manager at Baltimore-based Legg Mason Inc. (NYSE: LM). His firm oversees $631.8 billion. “We’ve had some positive surprises on the jobs front, and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there.”

Labor Department data showing fewer firings signaled that employers are seeing enough demand to retain staff, indicating the economy is sustaining the recovery. But stocks erased gains earlier after The Wall Street Journal reported that former European Central Bank official Otmar Issing said it was wrong to expect the ECB to buy government bonds to ease the region’s debt crisis. Economists surveyed by the ECB predicted the region’s contraction this year will be worse than previously forecast.

PulteGroup Inc. (NYSE: PHM) jumped 4.8 percent to $12.67 after being raised to "overweight" at JPMorgan. KB Home (NYSE: KB) added 6.3 percent to $10.74, while Beazer Homes USA Inc. (NYSE: BZH) rallied 4.5 percent to $2.79 after the two companies were also raised at JPMorgan.

Cisco Systems Inc. (Nasdaq: CSCO) rose 3.2 percent to $17.70 after being added to the “Conviction Buy” list at Goldman Sachs Group Inc. (NYSE: GS). Piper Jaffray Cos. (NYSE: PJC) also raised its recommendation for the technology company Thursday.

MBIA Inc. (NYSE: MBI) added 15 percent to $10.06. The bond insurer seeking reimbursement from Bank of America Corp. (NYSE: BAC) over faulty mortgages surged after pledging to carry on a court fight to force the lender to repurchase the loans.

James River Coal Co. (Nasdaq: JRCC) soared 13 percent to $2.52. The producer of the fuel in Appalachia and the Midwest reported a smaller loss than analysts predicted as costs fell.

Lincoln National Corp. (NYSE: LNC) climbed 2.3 percent to $23.23. The insurer said it increased the size of its share buyback authorization to $1 billion.

Elizabeth Arden Inc. (Nasdaq: RDEN) soared 13 percent to $44.02. The maker of the Britney Spears and Elizabeth Taylor brand fragrances forecast annual profit and revenue that topped estimates.

Alliant Techsystems Inc. (NYSE: ATK) advanced 7.1 percent to $51.94. The U.S. military’s largest ammunition maker rose as higher defense sales helped first-quarter earnings top estimates.

Robbins & Myers Inc. (NYSE: RBN) surged 27 percent to $59.63. National Oilwell Varco (NYSE: NOV) agreed to buy the company for about $2.5 billion in cash.

Knight Capital Group Inc. (NYSE: KCG) slid 2.9 percent to $3.07. The market maker that was driven to the verge of bankruptcy after a trading error said last week’s mishap may cause more losses and liabilities.

Education Management Corp. (Nasdaq: EDMC) plunged 19 percent to $3.24. The for-profit college chain fell a day after posting a $1.2 billion loss in the fiscal fourth quarter.

SunPower Corp. (Nasdaq: SPWR) declined 10 percent to $4.20. The solar panel company majority-owned by Total SA tumbled after it cut its 2012 sales forecast.

Kohl’s Corp. (NYSE: KSS) slid 1.2 percent to $51.42. The department store company reduced its fiscal 2012 profit forecast after sales fell in the second quarter.

NetApp Inc. (Nasdaq: NTAP) dropped 2.6 percent to $32.13. The seller of hardware and software for storing data was downgraded to "hold" from "buy" at Cantor Fitzgerald LP by equity analyst Paul Mansky. The 12-month target price is $38 per share.




Bloomberg News contributed to this report.




Related Links:

New York Stock Exchange: nyse.com

Nasdaq Stock Market: nasdaq.com

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