- The Washington Times - Thursday, April 24, 2008


NEW YORK — Stocks rose for the first time this week after better-than-estimated profits at technology, industrial and tobacco companies overshadowed declines in banks and commodity producers.

EM, Boeing and Philip Morris International helped lead the advance as their results bolstered speculation that overseas demand will counter the U.S. slowdown. Safeco Corp. jumped the most since at least 1982 after the insurer agreed to be bought for $6.2 billion. Benchmark indexes pared an early rally as lower metal prices dragged down mining shares and Ambac Financial Group’s wider-than-expected loss reignited concern that banks face more credit write-downs.

The Standard & Poor’s 500 Index rose 3.99 points, or 0.3 percent, to 1,379.93. The Dow Jones Industrial Average added 42.99, or 0.3 percent, to 12,763.22. The Nasdaq Composite Index climbed 28.27, or 1.2 percent, to 2,405.21, helped by a rally in Apple. The Russell 2000 Index of smaller companies gained 0.6 percent to 708.11.

“The backdrop today is one of the market being quite fairly valued, and in fact I think it’s a pretty low-risk entry point for investors,” said Fritz Meyer, senior market strategist at Invesco Aim. “When M&A; activity starts to pick up, it’s an indication that the animal spirits in the market are rising.”

EMC gained 30 cents to $15.89. The storage-computer maker reported first-quarter profit and sales that beat estimates, driven by strong growth overseas.

Boeing added $3.53, or 4.5 percent, to $82.09 for the top gain in the Dow. The aircraft manufacturer said first-quarter profit increased 38 percent, more than expected, as the company delivered more planes and compiled a record order backlog.

Philip Morris rallied $1.93 to total $52. The company, spun off last month by Richmond-based Altria Group, posted first-quarter profit that rose faster than estimated after new varieties of Marlboro cigarettes and acquisitions spurred sales in Indonesia, Pakistan and Mexico.

Safeco rallied $20.71, or 46 percent, to $65.94. Liberty Mutual Group Inc. agreed to buy the Seattle-based company for about $68.25 a share. The combination will create the fifth-largest U.S. property and casualty insurer.

Apple gained $2.69 to settle at $162.89 before the maker of iPod media players reported fiscal second-quarter results. The company said profit rose 36 percent, more than analysts estimated, after winning customers for its Macintosh personal computers. The shares slipped $2.49 to rest at $160.40 in extended trading.

Schering-Plough Corp. climbed $1.13 to total $18.27. The maker of the Vytorin and Zetia cholesterol pills reported first-quarter profit that fell less than expected as revenue jumped 57 percent.

Citigroup Inc., American International Group Inc. and Merrill Lynch & Co. dropped after Ambac, the second-largest bond insurer, reported $3.1 billion of mortgage-related charges.

Ambac’s first-quarter net loss was $1.66 billion, compared with $213.3 million a year earlier. The company’s operating loss of $6.93 a share was larger than the $1.82 expected. The shares tumbled $2.57, or 43 percent, to $3.46 for the steepest slide in the S&P; 500.

Citigroup lost 49 cents to arrive at $24.63. AIG retreated $1.41 to reach $43.86. Merrill lost $1.59 to settle at $44.91.

“The news has been extremely negative on the financials,” said John Kattar, chief investment officer at Eastern Investment Advisors. “The news is going to continue to be bad for a lot longer than people expect.”

Still, Bill Miller, Baltimore-based manager of the Legg Mason Value Trust, wrote in a letter to fund shareholders yesterday that “we have seen the bottom” in financial shares.

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