Oct. 22 -- U.S. stocks rose for the first time in three days after Bear Stearns Cos. got a $1 billion investment from China and investors speculated technology companies will report better-than-forecast earnings.
Bear Stearns, the fifth-biggest U.S. securities firm, helped financial shares post their first advance in nine days. Apple Inc., maker of the iPod and iPhone, climbed to a record before a report expected to show annual sales surpassed $20 billion. Merck & Co. rallied the most in three months after the third-largest U.S. drugmaker reported profit that topped analysts' estimates.
About nine stocks gained for every five that fell on the New York Stock Exchange as U.S. markets overcame a 115-point decline in the Dow Jones Industrial Average and losses in Europe and Asia. The Standard & Poor's 500 Index added 5.7, or 0.4 percent, to 1,506.33. The benchmark for American equities lost 3.9 percent last week, the most since August. The Dow average climbed 44.95, or 0.3 percent, to 13,566.97. The Nasdaq Composite Index increased 28.77, or 1.1 percent, to 2,753.93.
``Tech stocks are keeping things level, and Bear Stearns is expanding overseas, where most of the growth is,'' said Andrew Seibert, who helps manage $400 million at Nextier Wealth Management in Pittsburgh. ``Those things together are helping stabilize the market.''
Apple Rallies
Apple Inc. increased $3.94, or 2.3 percent, to $174.36. The company was expected to report full-year earnings above $3 billion, according to analysts surveyed by Bloomberg. Its shares added 5.5 percent in extended trading after it reported fiscal fourth-quarter profit jumped 63 percent, topping analysts' estimates. For the full year, it posted net income of $3.5 billion on sales of $24 billion.
Apple's stock contributed the most to a 1 percent gain in the S&P 500 Information Technology Index of 72 companies.
``Technology on a relative value is cheap compared to a lot of the other sectors'' and ``will hold up very well in the months to come,'' said Scott Minerd, who helps oversee $24 billion as chief investment officer at Guggenheim Partners Asset Management in Santa Monica, California.
Bear Stearns gained $1.44 to $117.85 after the investment bank and China's Citic Securities Co. agreed to invest $1 billion in each other in an alliance to pool their businesses in Asia. Citic will buy the equivalent of 6 percent of New York-based Bear Stearns' shares as the banks collaborate to develop financial products and services in China, the companies said.
They will also form a Hong Kong-based joint venture to bring together their operations outside of China.
A gauge of financial companies rebounded from its steepest decline in more than a month, gaining 1 percent. Lehman Brothers Holdings Inc., the fourth-biggest securities firm, added 33 cents to $57.55.
Merck, Disney
Merck advanced $1.53, or 2.9 percent, to $54.64 for the top gain in the Dow. The drugmaker reported a 63 percent increase in earnings and raised its profit forecast for the year after a vaccine for cervical cancer and a new pill for diabetes drove sales higher. Excluding acquisition and restructuring costs, profit exceeded the average analyst estimate.
Walt Disney Co. rose the most in a month after analysts said fourth-quarter profit at the second-largest U.S. media company will exceed estimates. ``Disney's best-in-class management will deliver yet another quarter of solid results'' because of growth in the cable and consumer products businesses, Banc of America Securities analyst Jonathan Jacoby wrote in a note to investors.
Staples Inc. climbed 74 cents to $22.28 after Dell Inc. said it will sell computers, monitors, printers and ink at Staples stores in North America starting Nov. 11.
Beazer, D.R. Horton
A gauge of homebuilders in S&P indexes climbed 6.7 percent, the most since October 2002, as all 15 members advanced. Their shares made up four of the top five gains in the S&P 500 as investors covered short positions before two housing reports this week.
The National Association of Realtors reports September existing home sales on Oct. 24 and the U.S. Commerce Department issues new home sales the following day
Beazer Homes USA Inc., the most-shorted company on the New York Stock Exchange as of Oct. 15, climbed 91 cents, or 10 percent, to $9.97.
``Chatter went around this morning that there was going to be a strategic infusion of cash in the company,'' said Frank Davis, director of sales and trading at Lek Securities Corp. in New York. There's also ``been some speculative chatter about Beazer as a possible takeover candidate because the price of the stock is so low.''
D.R. Horton Inc., the second-largest U.S. homebuilder whose shares are down 52 percent this year, added 82 cents, or 6.9 percent, to $12.77.
Halliburton
Halliburton Co. increased 48 cents to $39.33. The world's second-largest oilfield-services provider said third-quarter net income rose 19 percent as clients increased spending on wells in the Middle East and Asia. Excluding an increase in environmental reserves and a tax gain, third-quarter profit was about 66 cents a share, 1 cent higher than the average of 21 analyst estimates compiled by Bloomberg.
Stocks fell earlier in the day, led by mining and energy shares, after the Group of Seven finance ministers and central bankers said in a statement that ``recent financial market turbulence, high oil prices and weakness in the U.S. housing sector will likely moderate'' global economic growth.
Commodities Slump
Exxon Mobil Corp., the biggest energy company, lost $1.23 to $90.91. Chevron, the second-largest U.S. crude producer, slipped 83 cents to $88.44. Oil fell for a second day on speculation that credit-market losses may stunt economic expansion, curbing energy demand, and as the risk of a Turkish offensive in Iraq receded. Crude for December delivery, the most actively traded contract, fell 93 cents to $86.02.
Newmont Mining Corp., the world's second-largest gold producer, slumped 69 cents to $44.97 after copper fell to an almost five-week low and gold retreated from a 27-year high.
American Express Co. lost 24 cents to $56.87. Lehman cut its rating on the shares to ``equal weight'' from ``overweight,'' saying ``it is just a matter of time'' before losses spill over to credit cards, auto loans and other forms of credit.
DuPont Co., the third-largest U.S. chemical maker, retreated 30 cents to $46.57 after Citigroup cut the shares to ``hold'' from ``buy.''
Schering-Plough Corp. fell $4.37 to $28.34. The drugmaker reported profit, excluding items related to the $14.4 billion acquisition of Akzo Nobel NV's Organon unit, that trailed the average estimate of analysts surveyed by Bloomberg.
The Russell 2000 Index, a benchmark for companies with a median market value of $646 million, gained 1.4 percent to 810.08. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, rose 0.5 percent to 15,247.75. Based on its advance, the value of stocks increased by $91.6 billion.
*T American Express Co. (AXP US) Apple Inc. (AAPL US) Bear Stearns Cos. (BSC US) Beazer Homes USA Inc. (BZH US) Chevron Corp. (CVX US) D.R. Horton Inc. (DHI US) DuPont Co. (DD US) Exxon Mobil Corp. (XOM US) Halliburton Co. (HAL US) Merck & Co. (MRK US) MGM Mirage (MGM US) Schering-Plough Corp. (SGP US) Staples Inc. (SPLS US) Walt Disney Co. (DIS US) *
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