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Tuesday February 9, 2010 6:28 PM ET
SmartMoney
Published May 15, 2007 4:30 PM  |  A A A
Breaking News by Michael DeSenne (Author Archive)

Tame Inflation Fuels Dow

News at a Glance


  • Dow Record: Industrials close at new high.

  • Inflation Check: CPI moderate despite gas.

  • Bubble Trouble: Home Depot takes a hit.

  • Class Act: Tyco to pay billions to settle suits.


    • The Lowdown


    The Dow posted yet another record close on Tuesday thanks to encouraging news on the inflation front. The industrial average added 37 points to finish at 13383. The Nasdaq lost 21 to 2525, and the S&P 500 index gave back 2 points to 1501. While gasoline prices surged in April, helping to lift the Consumer Price Index by 0.4%, core prices excluding food and energy edged up just 0.2%.

    Giving investors some pause was a report from the National Association of Home Builders that showed further deterioration in the housing market. Stocks were up sharply in early trading before the data were released. Also troubling was a big drop in quarterly earnings at Home Depot. The chain continues to struggle with the fallout from the housing slump. Wal-Mart fared well, though the retailer's CEO said quarterly results should've been better. Profits met expectations, while quarterly sales came in a bit shy of forecasts.


    Corporate News


  • Home Depot (HD) reported a 30% decline in first-quarter earnings to $1.05 billion. A sharp drop-off in the housing market has taken a bite out of the home-improvement chain's bottom line. Sales inched up less than 1% to $21.6 billion.

  • Wal-Mart Stores (WMT) recorded an 8% jump in first-quarter earnings to $2.83 billion, hitting analysts' projections. Sales rose a bit more than 8% to $85.4 billion, just shy of expectations. CEO Lee Scott expressed disappointment in the numbers.

  • Amgen (AMGN) shares are feeling the effects of a possible reduction in coverage by Medicare of anti-anemia drugs. The government is considering limiting reimbursements to uses for certain cancers. Two of Amgen's key drugs are Epogen and Aranesp, both of which are used to treat anemia.

  • Winn-Dixie Stores (WINN) posted a surprise profit just six months after emerging from bankruptcy. The grocer tallied earnings of $17.8 million, or 33 cents a share, for the quarter ended April 4. Management trumpeted the results as evidence the supermarket chain's turnaround plan is working.

  • Tyco International (TYC) offered to pay nearly $3 billion to settle outstanding lawsuits tied to the Dennis Kozlowski era, which was marked by corporate excess and accounting fraud. The settlement requires the approval of major shareholders and the court. Convicted in 2005, Kozlowski, Tyco's former chief, is now behind bars.


    • The Economy


  • Consumer prices rose a modest 0.4% in April despite a big jump at the gasoline pump, according to a Labor Department report. Prices increased 0.6% in March. Excluding volatile food and energy costs, core consumer prices increased just 0.2% last month.


    • ReadMe


  • Dennis the Menace: Reuters recaps the sorted behavior that landed ex-Tyco CEO Dennis Kozlowski behind bars and led to the company's $3 billion settlement. STORY


    • WatchMe


  • GOP Debate: Republican presidential hopefuls square off over the economy, Iraq and more. Fox, 9 p.m.

  • The Big Idea: Donny Deutsch reveals the secrets of poker millionaires all week long. CNBC, 10 p.m.



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