Wall St up on Midwest data, regulatory overhaul plan
|
| Posted
:
Mon, 31 Mar 2008 16:52:11 GMT |
| Author
:
Reuters |
| Category
:
US (Business) |
| News Alerts by
Email ( click
here ) |
|
|
|
|
|
By Cal MankowskiNEW YORK (Reuters) - Stocks rose on Monday after a report showing stronger-than-expected Midwestern business activity and the formal announcement by Bush administration officials of a plan for a major overhaul of the regulation of U.S. financial markets.Despite the gains on the last day of the first quarter, the U.S. stock market was headed for its worst quarterly performance in 5-1/2 years.While financial and telecommunications stocks helped lead the advance, drug makers Schering Plough Corp and Merck & Co tumbled after an expert panel recommended patients try a generic statin to lower cholesterol before using the two companies' jointly developed medicines, Vytorin and Zetia. For details, see .The National Association of Purchasing Management-Chicago index, also known as the Chicago PMI, showed business activity in the Midwest had contracted less than economists had forecast."You had a better-than-expected Chicago PMI number," said Phil Orlando, chief equity market strategist at Federated Investors in New York. "I think the more important backdrop is the proposal that (Treasury Secretary) Paulson and the administration are making in terms of changing financial services industry oversight. It looks like the market is taking it fairly well."The Dow Jones industrial average <.DJI> gained 61.63 points, or 0.50 percent, to 12,278.03. The Standard & Poor's 500 Index <.SPX> rose 7.93 points, or 0.60 percent, to 1,323.15 and the Nasdaq Composite Index <.IXIC> jumped 14.10points, or 0.62 percent, to 2,275.28.JPMorgan Chase & Co shares gained 2.7 percent to $43.84, leading the Dow industrials and among the S&P's major gainers. An S&P index of financial shares <.GSPF> shot up 1.6 percent.AT&T Inc gained 2 percent to $38.42, ranking second among the S&P's major advancers and in the Dow's top 10 gainers at midday.Treasury Secretary Henry Paulson said the plan to streamline financial market regulation was not intended to be a response to current market turmoil and should not be implemented until the crisis is resolved.In the pharmaceutical sector, shares of Merck, a Dow component, slid 15.3 percent to $37.71. Schering's stock sank 26 percent to $14.40. Lehman Brothers cut its price target on Merck and downgraded Schering.In contrast, shares of U.S. biotechnology company Gilead Sciences Inc helped boost the Nasdaq. Gilead, whose products include drugs to treat HIV and AIDS, rose 3.3 percent to $51.26 after Lazard raised its price target on the stock to $55 from $50.Data compiled by Reuters Estimates showed Wall Street analysts have further reduced their forecasts for first-quarter earnings for S&P 500 companies. Earnings are now expected to fall 8.1 percent in the first quarter, compared with a 5.5 percent decline projected last week.The global credit crisis has significantly damaged the outlook for many major U.S. companies, particularly in the financial sector.In addition to the Chicago PMI, data showed business activity in New York City weakened in March, according to the National Association of Purchasing Management-New York.Heading into the quarter's final session, the Dow is down about 7.9 percent, the S&P 500 is down 10.4 percent and the Nasdaq has lost 14.8 percent. For all three benchmarks, it's the worst quarterly performance since the third quarter of 2002.Fortune Brands Inc advanced nearly 8 percent to $68.80 after the U.S. spirits maker said it would begin repurchasing its own shares after losing out in an auction for the maker of Absolut vodka.(Additional reporting by Jennifer Coogan; Editing by Jan Paschal)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
|
|
|
