Dow Rises 80.91; Citigroup Shines

Banks Lead Gains; Later, Tech Trouble

 

By DONNA KARDOS YESALAVICH

Stocks closed higher on Monday as investors were encouraged by earnings from Citigroup and a measure of home-builder confidence that topped expectations.

The Dow Jones Industrial Average rose 80.91 points, or 0.73%, to 11143.69, its highest close since May 3. The Nasdaq Composite added 11.89, or 0.48% to 2480.66, while the Standard & Poor's 500-stock index advanced 8.52, or 0.72, to 1184.71.
Citigroup jumped 22 cents, or 5.6%, to $4.17 after its third-quarter earnings topped analysts' estimates. Revenue climbed 2%, meeting expectations, as the company managed to grow its core businesses broadly.

"There was this general sigh of relief for Citi in that they seem to be getting things on track," said Tim Evnin, partner and equity portfolio manager at Evercore Wealth Management.
Citigroup's report set a positive tone for a busy week of earnings reports. This week, 11 of the 30 Dow Jones Industrial Average components and more than a fifth of S&P 500 companies are due to report third-quarter results.
Among other banks scheduled to report results this week, Wells Fargo added 1.29, or 5.5%, to 24.87, KeyCorp advanced 27 cents, or 3.4%, to 8.30, Fifth Third Bancorp climbed 41 cents, or 3.4%, to 12.54, and PNC Financial Services gained 1.69, or 3.3%, to 53.01.
Also lifting sentiment, the National Association of Home Builders said its housing-market index rose three points to 16 in October, the first improvement in five months.

Other data showed U.S. industrial production and capacity utilization slipped last month. But investors seemed to take that weakness in stride amid increasing expectations for more stimulus measures from the Federal Reserve.
"For equity investors, it's a little bit tails we win, heads we do too, because if it's really bad perhaps we get some quantitative easing," Mr. Evnin said.
In deal activity, St. Jude Medical agreed to acquire AGA Medical in a cash-and-stock deal valued at $1.08 billion, a 41% premium to Friday's closing price for AGA. AGA shares surged 5.99, or 41%, to 20.70, while St. Jude rose 73 cents, or 1.8%, to 40.63.
Northeast Utilities agreed to buy fellow New England utility company Nstar for $4.3 billion in stock. The terms value Nstar at a 1.9% premium to Friday's closing price. Northeast slipped 28 cents, or 0.9%, to 30.42, while Nstar shed 23 cents, or 0.6%, to 39.30.

Among other stocks in focus, Halliburton fell 1.73, or 4.8%, to 34.09. The oilfield-services company's third-quarter profit doubled as its North American markets continued to rebound, but the earnings missed analysts' expectations.
Hasbro climbed 1.73, or 3.8%, to 46.81. Despite a sharp drop in sales of toys tied to last year's "Transformers" and "G.I. Joe" movies, the toy maker's results assuaged investors' fears about the toy business. The company's third-quarter profit rose 3.2% on improved revenue in most of its toy categories, beating analysts' expectations.
After regular trading hours, Apple tumbled 6.3% to $298.12 despite reporting stronger earnings, as gross margins missed analysts' expectations and iPad sales disappointed.
International Business Machines shed 4% in late trading to $137.10 after reporting that its signed service contracts fell 7%. And Microsoft slipped 2.4% to $25.20 after-hours on reports that Ray Ozzie, its chief software architect, is retiring.
Allergan gained 3.75, or 5.5%, to 72.61, after the Food and Drug Administration widened the approved usage of the drug maker's top product, Botox, to include the treatment of migraines.
CME Group advanced 13.36, or 5%, to 280.87, as the exchange operator rolled out a new service that will handle over-the-counter derivatives transactions tied to fluctuations in global interest rates.
McMoRan Exploration dropped 2.42, or 13%, to 16.02. The oil-and-gas explorer's third-quarter loss narrowed as expenses fell 27%, but revenue declined amid lower production.
Fluor slipped 2.64, or 5.1%, to 49.23, after the engineering-and-construction company warned it will record a $163 million charge in for the third quarter because of estimated costs increases for an offshore wind project.
Quicksilver Resources jumped 2.04, or 16%, to 14.65, after the natural-gas company said a group of shareholders led by the company's ruling Darden family wants to review alternatives that include taking the company private for a "substantial premium." (Fonte: Wall Street Journal)