Signs Pointing To Strong Finish For Stocks In 2010 (HAL, C, HAS, MAT, STJ, AGAM, CJHBQ)
Stocks continued their strong fall run, with the market turning in another solid day. An accommodative Fed, solid earnings thus far, a recovering economy, and some attractive valuations continue to bode well for stocks to have a solid close to the year, in our opinion.
Stocks rose on the day, with the Dow up 81 points to 11,144. The S&P added 9 points to close at 1,185, while the Nasdaq advanced 12 points to 2,481. Oil jumped $1.83 to $83.08 a barrel, while gold edged up 10 cents to $1,372.10 an ounce.
On the economic front, the Federal Reserve said that industrial production fell -0.2% last month following an increase of 0.2% in August. Economists had expected a rise of 0.2% in September. Meanwhile, capacity utilization, which measures slack in the economy, inched down to 74.7%, just missing estimates of 74.8%.
In earnings news, shares of Halliburton (HAL) slipped -4.8% despite the oil services company announcing that it more than doubled its Q3 profit because of a surge in natural gas drilling. For the quarter ended September 30th, net income rose to $544 million, or 60 cents a share, topping the 56-cent consensus. A year earlier, the company earned $262 million, or 29 cents a share. Revenue jumped 30% to $4.67 billion. A total of 51 Pro investors counted the stock in their top-15 U.S.-listed equity holdings at the start of Q3, while 738 tickerspy members held the stock in their portfolios.
For the third consecutive quarter, Citigroup (C) reported a profit, and the bank also said its losses from bad loans fell for the fifth quarter in a row. The stock moved up 5.6% on the news. For the quarter, Citigroup earned $2.15 billion, or 7 cents per share, beating estimates by a penny. This compared with a loss of -$3.24 billion, or -27 cents per share, a year ago. Revenue came in at $20.7 billion, just missing expectations of $21 billion, while losses from bad loans dropped -30% to $7.66 billion. A total of 114 Pro investors counted the stock in their top-15 U.S.-listed equity holdings at the start of Q3, while 7,034 tickerspy members held the stock in their portfolios.
Shares of Hasbro (HAS) rose 3.8% after the toymaker’s Q3 results topped Wall Street’s expectations. For the period ended September 26th, the company earned $155.2 million, or $1.09 per share, up 3% from $150.4 million, or 99 cents per share, last year. Analysts were looking for EPS of just $1.04. Sales grew 3% to $1.31 billion. Hasbro Chief Executive Brian Goldner said that the company is “not seeing major delays of inventories” ahead of the holiday season, the opposite of what rival Mattel (MAT) reported on Friday.
In M&A news, medical device maker St. Jude Medical (STJ) said it will acquire rival AGA Medical Holdings (AGAM) in a cash and stock deal valued at $1.3 billion, or $20.80 per share, including the assumption of $225 million in debt. The deal is a 41% premium compared to the stock’s closing price on Friday. Shares of AGA surged 40.7% on the news, while shares of St. Jude rose 1.8%.
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