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Tuesday February 9, 2010 10:56 PM ET
SmartMoney
Published September 13, 2007 4:57 PM  |  A A A
Breaking News by Mark Glassman (Author Archive)

Blue Chips Roll

News at a Glance


  • Dow Jumps: Large-caps index rides financials, materials.

  • Oil Flat: Crude prices waffle but unchanged after surge.

  • UAW Gives: Union may agree to healthcare trust fund.

  • Extra Value Menu: McDonald's lifts 2007 dividend by 50%.


    • The Lowdown


    Stocks posted big gains Thursday as traders returned to large-caps after a bullish unemployment report and a strong signal from the nation's top lender. The Dow Jones Industrial Average gained 133 points at 13425. The Nasdaq rose 9 to 2601, and the S&P 500 picked up 12 at 1484.

    Telecoms, materials, financials and consumer cyclicals did particularly well. Consumer staples and techs lagged but still posted gains.

    In economic news, weekly jobless claims rose last week but still came in below economists estimates. The August budget statement showed the deficit widened last month by more than economists had expected.

    Traders appeared to embrace a vote of confidence in Countrywide Financial. The mortgage lender said it had secured more borrowing capacity, suggesting creditors were starting to loosen up.

    Crude prices were flat but remained elevated. By 4:40 p.m., oil had climbed 2 cents on the day to $79.93 a barrel. On Wednesday, a surge in oil prices had left stocks at a standstill.

    Wednesday's jump in energy prices has offered traders a momentary distraction from the daily guessing game surrounding the Federal Reserve's Tuesday meeting. The Fed is widely expected raise interest rates by a quarter of a point, although some economists believe the Fed could go as low as half a point. Tomorrow's retail sales report, which will speak to the strength of the consumer, could carry extra sway with traders as they seek to handicap the Fed's thinking.


    Corporate News


  • Shares of General Motors (GM) soared after the United Auto Workers union said it would consider the creation of a healthcare trust fund. The concession could save U.S. car companies roughly $95 billion in costs, The Wall Street Journal reported.

  • Countrywide Financial (CFC) has locked in an additional $12 billion in borrowing capacity, the company said. Separately, Chairman Angelo Mozilo, who presided over the company as it dug itself into the subprime lending mess, appears likely to keep his job, Reuters reported. Mozilo, a charter member of the George Hamilton school of tanning, has been cashing in his stock options as the company's market cap has plummeted, and sheer rank makes him an excellent candidate for the scapegoat. However, Mozilo co-founded Countrywide in 1969 and has long since established himself as integral to the firm's identity.

  • Alcatel-Lucent (ALU), the transatlantic telecom company, lowered its revenue forecast for the year and said the revision would impact the firm's near-term earnings outlook. The lower expectations stem from a decline in capital spending among Alcatel's North American wireless customers, the firm said.

  • First Horizon (FHN), a national financial services firm and home loan provider, plans to cut at least 1,500 jobs, about 13% of its workforce, by the middle of 2008, the company said. First Horizon also plans to close its least lucrative mortgage branch offices, as the credit crunch has eroded profits.

  • Target (TGT) is considering selling off its credit card assets worth roughly $7 billion, the company said. Target appeared to be bending to the will of Bill Ackman, an investor with a 9.6% stake in the company. Ackman has pushed Target to take steps to lift its stock price.

  • McDonald's (MCD) boosted its 2007 dividend to $1.50, up from $1 in 2006. The move is part of a plan to give back between $15 billion and $17 billion in cash to shareholders by 2009, the company said. McDonald's has raised its dividend every year since 1976, the first time it paid one.


    • The Economy


  • Weekly jobless claims rose to 319,000 last week, up from a revised 315,000 in the prior week, the Labor Department said. Economists had predicted the number people seeking unemployment benefits for the first time would rise to 325,000. REPORT

  • The monthly budget deficit rose to $117.0 billion in August, up from $64.7 billion in July, the Treasury Department said. Economists had predicted the monthly shortfall would widen to $85.0 billion. REPORT


    • ReadMe


  • CNNMoney on why oil prices surged: The economy is slowing down. OPEC is adding supply. Inventories remain above average for this point in the year. So, if all signs point to downward price pressures, what's going on? STORY

  • MarketWatch on what high energy prices mean for consumers: Nothing good. Heating oil prices could jump heading into winter. Gasoline may not be as much of an issue. STORY


    • WatchMe


  • Power Lunch: Charmaine Tang, vice president at Citi, will preview the August retail sales report due out Friday. CNBC, 12 p.m.

  • Kudlow & Co.: Former Federal Reserve Governor Wayne Angell will discuss the Fed and the economy. CNBC, 5 p.m.

  • Modern Marvels: Oil Fire Fighting: Not only is it $80 a barrel, but it's also flammable. Check out how the oilfields' bravest put out unusually stubborn fires. HIST, 8 p.m.



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