U.S. Stocks Rebound, Citigroup, Intel Shares Rise

Από αναδημοσίευση άρθρου σε ξένο οικονομικο site :

U.S. stocks climbed after Citigroup Inc. received a $7.5 billion cash infusion and JPMorgan said Intel Corp. will benefit from ``robust'' computer demand.
Citigroup's advance helped stocks rebound from losses yesterday that brought the decline from October to 10 percent, the first so-called ``correction'' in four years. Intel led semiconductor makers to their biggest gain in two weeks. Altria Group Inc., the world's largest tobacco maker, increased after Goldman Sachs Group Inc. advised buying companies whose profits aren't tied to the economy.
The Standard & Poor's 500 Index added 21.01, or 1.5 percent, to 1,428.23. The Dow Jones Industrial Average rose 215, or 1.7 percent, to 12,958.44. The Nasdaq Composite Index rallied 39.81, or 1.6 percent, to 2,580.8.
About five shares rose for every two that fell on the New York Stock Exchange.
``We like larger-cap stocks, we like consumer staples, we like health-care and technology because we think that the earnings profile will withstand some of the downturn in the economy,'' said Kevin Caron, market strategist at Stifel Nicolaus & Co. in Florham Park, New Jersey, which has client assets of more than $50 billion.
The S&P 500 and Dow average dropped the most in two weeks yesterday, leaving both indexes more than 10 percent below their October all-time highs. The S&P 500 also briefly erased its gain for the year today on growing concern that mortgage losses will reduce bank lending and curtail economic growth.
Citigroup Gains
Citigroup, which had slumped 47 percent this year, advanced after the largest U.S. bank said it will sell a stake of as much as 4.9 percent to the Abu Dhabi Investment Authority. Bank of America Corp. and JPMorgan Chase & Co., the biggest U.S. banks after Citigroup, also gained.
``They're probably getting a very good value,'' said Scott Black, who oversees $1.6 billion as president of Delphi Management Inc. in Boston. ``There's a lack of confidence out there, but I don't think the economy's headed into recession.''
Citigroup climbed 56 cents to $30.32. Bank of America gained $1.06 to $42.94, while JPMorgan rose $1.89 to $42.35.
Intel, the biggest semiconductor maker, led technology companies in the S&P 500 to a 1.5 percent gain after JPMorgan boosted its earnings estimates. Intel added 74 cents to $25.11.
The company will continue to benefit from ``a robust PC market and its superior product offerings in the microprocessor market,'' analyst Christopher Danely wrote in a note to clients.
Altria Climbs
Altria rose the most since August, climbing $1.91, or 2.7 percent, to $73.35. Goldman recommended shares of the world's largest tobacco company because it will benefit from ``solid growth'' as the U.S. economy slows and ``a likely share buyback announcement in February 2008.''
Following Citigroup's announcement, a gauge of financial stocks rose 2.6 percent for the biggest gain among 10 industry groups in the S&P 500. They rebounded from a 4.1 percent loss yesterday. Bear Stearns Cos., the manager of two hedge funds that collapsed in July, climbed $4.39 to $95.43. JPMorgan Chase & Co., the third-largest U.S. bank by assets, advanced $1.89 to $42.35.
Online brokerage E*Trade Financial Corp. surged 6.7 percent to $4.91 after the chief financial officer of TD Ameritrade Holding Corp., which is under pressure from shareholders to buy it, said his company won't ``shy away from'' mergers and acquisitions as it seeks to increase the amount of client assets it controls. TD Ameritrade gained 20 cents to $18.32.
Retailers Rise
Retailers in the S&P 500 rose 1.8 percent, led by Staples Inc. The world's largest office-supplies retailer said quarterly profit fell less than analysts anticipated on increased international sales. Staples rose $2.09, or 11 percent, to $21.85, its biggest gain in five years.
Drugmakers and utilities, whose earnings are less sensitive to changes in the rate of economic growth, gained after a gauge of consumer confidence fell more than expected this month and home prices dropped the most in at least two decades.
Pfizer Inc., the world's biggest drugmaker, advanced 58 cents to $22.88. Entergy Corp., the second-largest U.S. operator of nuclear power plants, added $1.87 to $116.31.
The Conference Board's confidence index decreased to 87.3, the lowest since the aftermath of Hurricane Katrina in October 2005, from a revised 95.2 the prior month, the New York-based group said today. The index averaged 105.9 last year.
Home Prices Fall
U.S. home prices fell 4.5 percent in the three months through September from the same period a year before, the most since records began in 1988, according to a report today by S&P/Case-Shiller. It followed a 3.3 percent drop in the second quarter.
Yesterday's fall wiped out a rally in the S&P 500 that was sparked by the Federal Reserve's Aug. 17 discount rate cut, the first reduction in borrowing costs between scheduled meetings since 2001.
Stock indexes tumbled from their highs as banks and other financial firms reported more than $50 billion of mortgage- related losses and writedowns. The S&P 500 Financials Index has dropped 20 percent since Oct. 9 and is headed for its biggest annual loss since 1990.
Abu Dhabi Investment Authority will help Citigroup ``strengthen our capital base,'' Win Bischoff, the bank's acting chief executive officer, said in a statement late yesterday. Abu Dhabi, the largest sheikhdom in the U.A.E., would rank as Citigroup's second-largest shareholder after Los Angeles-based Capital Group Cos. and ahead of Saudi billionaire Prince Alwaleed bin Talal.
``Perhaps there is a light at the end of the tunnel,'' said Malcolm Polley, who oversees $1 billion as president of Stewart Capital Advisors in Indiana, Pennsylvania. ``Large banks are finally starting to deal with the problem in an up-front manner, which brokerages started doing in September and October.''