News at a Glance
Equities Advance: Materials and tech stocks lead rally.
Unemployment Up: Jobless claims rise a bit above estimates.
Oil Steady: Crude fairly even after distillate supply report.
Good Things, R.I.P.: GE to sell appliance unit: WSJ.
The Lowdown
The rally continued Thursday.
After a volatile morning, the major indexes finished higher on a brighter outlook for techs and mixed signals from labor market and the manufacturing sector. The Dow Jones Industrial Average climbed 94 points to 12993. The broader indexes each climbed more than 1%. The Nasdaq picked up 37 at 2534, and the S&P 500 gained 15 at 1424.
The tech sector rose sharply, led by Intel (INTC), after an analyst report said the computer industry was likely benefit to benefit from a rise in worldwide demand. Consumer cyclicals and materials also posted gains. Financials recovered their early losses and gained ground. Energy and health care leaned positive.
Oil prices gave back their early gains after an Energy Department report showed a rise in the distillate fuel supply. Shortly before 4 p.m., crude traded down 8 cents on the day at $124.14 a barrel.
Economic indicators were mixed. The Federal Reserve said industrial production and capacity utitilization each declined in April by more than economists had expected. However, the latest Business Outlook Survey from the Philly Fed suggested near-term strength in the manufacturing sector.
The labor market showed some weakness as initial jobless claims climbed to 371,000 last week, a hair above consensus estimates. Separately, the New York Fed said the regional employment outlook dimmed this month.
Fed Chairman Ben Bernanke addressed the credit crisis again. In prepared remarks, he expressed optimism that banks would recover and be more vigilant on risk management. However, Bernanke cautioned more financial institutions to augment their "capital cushions for protecting against adverse conditions in financial and credit markets."
In corporate news, CBS agreed to plunk down $1.8 billion for the Internet firm CNET, instantly extending its reach on the Web. General Electric, the parent company of NBC Universal, is planning to scuttle its appliances division for as much as $8 billion.
The retail sector reported some bittersweet earnings. J.C. Penny (JCP) topped first-quarter estimates, but profits fell more than 50% below those of the year-ago period. Tiffany (TIF) topped its own guidance and boosted its dividend.
The market's gains extended a rally that began Wednesday after a surprisingly rosy inflation report.
Corporate News
General Electric (GE) plans to sell its iconic appliances business for between $5 billion and $8 billion, The Wall Street Journal reported, citing anonymous sources. A first-quarter earnings letdown put GE under pressure to shed non-core assets. GE began selling heating and cooking appliances in 1907 and made itself a household name by stocking the nation's kitchens with toasters, dishwashers and air conditioners. (A General Electric refridgerator is lauded in Arthur Miller's "Death of a Salesman.") The unit has long since dwindled in its contribution to GE's bottom line. Still, the move raises the question: what will become of Alec's Baldwin's character on "30 Rock?"
CBS (CBS) has agreed to acquire CNET Networks (CNET) in a deal worth $1.8 billion, the media firm said. The deal, which represents a 44% premium to CNET's Wednesday close, would catapult CBS to one of the 10 largest Internet firms in the country. "There are very few opportunities to acquire a profitable, growing, well-managed Internet company like CNET Networks," Leslie Moonves, CBS president and chief executive, said.
Yahoo (YHOO) will soon have a proxy battle on its hands, as activist investor Carl Icahn tries to rebuild the firm's board in an effort to restart deal talks with Microsoft (MSFT), The Wall Street Journal reported, citing anonymous sources. Icahn, who acquired 50 million shares of Yahoo after Microsoft withdrew its $44.6 billion offer, is poised to nominate 10 new directors to the board.
Barclays (BCS) reported a decline in first-quarter profit after absorbing a $2 billion writedown related to "credit market turbulence," the firm said. The bank did not specify by how much income declined during the period, and left open the possibility of raising more capital.
The Economy
Initial jobless claims rose to 371,000 last week, up from 365,000 in the prior week, the Labor Department said. Economists had expected the number of people seeking unemployment benefits for the first time to come in at 370,000. REPORT
The general business conditions index of the Empire State Manufacturing Survey slipped to a May reading of -3.2, down from an April reading of 0.6, the Federal Reserve Bank of New York said. The Fed said the outlook for the next six months weakened a bit and that the labor market appears headed for a rough patch. Economists had expected the measure of regional manufacturing conditions to come in at 0.0. REPORT
Industrial production fell 0.7% in April, down from a revised 0.2% increase in March, the Federal Reserve said. Economists had expected a 0.3% decline. Capacity utilization came in at 79.7% last month, down from a revised reading of 80.4% in March. Economists had predict a reading of 80.2%. REPORT
The Philadephia Federal Reserve's diffusion index of current business activity rose to a May reading of -15.6, up from an April reading of -24.9. Economists had predicted a reading of -19.0. In the same report, manufacturers said they were optimistic about their outlooks. REPORT
ReadMe
U.S. News on health care: Here are some ideas about how to cope with the soaring cost of prescription drugs. STORY
Forbes on investing this spring: The magazine's bi-annual investment guide offers suggestions for where to put your money, assuming at this point that you have any left. GUIDE
Slate on fashion and the economy: In the current economic environment, even the most stylish folks will make sacrifices here and there. STORY
WatchMe
Vegas Do's and Don'ts: The special highlights a few free shows and offers gambling tips. TRAVEL, 7 p.m.
Who Knew? With Marshall Brain: The episode examines how money is made (manufactured, not earned) at the Bureau of Engraving and Printing. NGC, 8 p.m.
The Office: In the season finale, Toby, the HR guy, gets a send-off. His replacement is hazed. NBC, 9 p.m.
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