Alcoa gains on tentative labor pact; GM shares fall
By Mark Cotton, MarketWatch Last Update: 2:09 PM ET Jun 1, 2006
NEW YORK (MarketWatch) -- Led by strength in the technology sector, U.S. stocks rose Thursday with retailers also gaining ground after sales reports showed consumer spending remained robust in May. A round of economic reports appeared to confirm a cooling housing market and slowing economic growth, but also that inflationary pressures were largely contained. The Dow Jones Industrial Average ($INDU : Dow Jones Industrial Average News , chart, profile, more Last: 11,221.62+53.31+0.48%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 11,221.62, +53.31, +0.5%) was up 46 points at 11,215. Of the 30 Dow stocks, 19 contributed to gains. Check Performance of Dow Stocks. The Nasdaq Composite Index ($COMPQ : Nasdaq Composite Index News , chart, profile, more Last: 2,204.16+25.28+1.16%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 2,204.16, +25.28, +1.2%) rose 18 points to 2,197 while the S&P 500 Index ($SPX : S&P 500 Index News , chart, profile, more Last: 1,279.57+9.48+0.75%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 1,279.57, +9.48, +0.7%) added 8 points to 1,278. "From a short-term perspective, one can argue we were oversold and due for a rally," said Barry Hyman, equity market strategist at EKN Financial. "The strong retail sales were a decent impetus for the market. That tells you the consumer is still pretty active." Hyman said the strength of the Nasdaq is pointing to "the first signs of rotation out of the commodities into technology stocks. "That shows investors have a little more appetite for risk." On the broader market for equities, advancers outpaced decliners by 2 to 1 on the New York Stock Exchange, and by 9 to 5 on the Nasdaq. By sector, retailers ($RLX : s&p retail index-rlx News , chart, profile, more Last: 462.80+5.85+1.28%
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 245.74, +6.77, +2.8%) , home builders (HGX : phlx hsg sector index News , chart, profile, more Last: 230.23+2.99+1.32%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 230.23, +2.99, +1.3%) and airlines (XX:$XAL: news, chart, profile) were the most significant gainers. Biotechs ($BTK : biotechnology index News , chart, profile, more Last: 659.51+1.78+0.27%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 659.51, +1.78, +0.3%) and computer hardware stocks ($GHA : CBOE Gsti Hardware Index News , chart, profile, more Last: 334.77+2.34+0.70%
3:08pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 334.77, +2.34, +0.7%) were under modest pressure. Volume was 941 million on the Big Board, and 1.2 billion on the Nasdaq. For Charles Rotblut, senior market analyst at independent research firm Zacks.com, the market is still "very unsure of itself." "Traders are trying to guess on a daily basis what they think the latest data mean in terms of rate hikes." Rotblut said the rising concern over inflation expressed by Federal Reserve officials in the minutes of their May 10 meeting means a June rate increase is very much likely. "But I really think August is in play also, even if nobody is talking about it." At its May meeting, the Federal Open Market Committee, the Fed's rate-setting body, raised its key short-term interest rate for the 16th time in as many meetings, to 5%. On Wednesday, federal-fund futures priced in a higher chance of a rate hike in June after the release of the Fed minutes. See full story. Flurry of data Productivity in the U.S. nonfarm business sector rose at an annual rate of 3.7% in the first quarter, stronger than the 3.2% gain reported earlier, the Labor Department said. However, unit labor costs -- a key gauge of inflationary pressures stemming from wages -- were revised lower to a 1.6% annualized gain from 2.5% reported earlier. There were also big revisions to unit labor costs in the fourth quarter that revealed a much more benign inflation climate during that period. See full story. Also Thursday, factory activity in the United States decelerated in May, the Institute for Supply Management reported. The ISM index fell to 54.4% in May from 57.3% in April, a decline that was slightly larger than expected. The consensus forecast of estimates collected by Marketwatch had been for the index to fall to 55.8%. Readings above 50 indicate expansion. The price index rose to 77% from 71.5%. Three reports pointed to a slowing housing market. Pending home sales fell in April for the third straight month, the National Association of Realtors said.
U.S. construction outlays, meanwhile, fell 0.1% in April, dragged down by a 1.1% drop in spending on home construction, the Commerce Department said. The 0.1% drop was a surprise, running counter to the 0.2% increase in construction spending for the month derived in a poll of economists by MarketWatch. See full story. Also, U.S. home prices rose at the slowest pace in two years in the first quarter, as some once-hot markets in California saw prices fall. See full story. Rounding out Thursday's data, initial jobless claims rose to a seven-month high in the latest week. See full story. The U.S. dollar inched higher but was well off its session highs, after the latest data failed to dispel investors' long-term bearish view on the U.S. currency. The euro was last down 0.03% at $1.2807. Against the Japanese yen, the greenback was up 0.1% at 112.59. Gold futures tapped a six-week low as the precious metals pulled back from recent highs. The benchmark August contract ended down $15.50 at $633.60 an ounce, but off a session low of $625.70. See Metals Stocks. On the bond market, long-term Treasury prices rose, sending yields lower after the latest data suggested economic growth is slowing, raising the odds the Fed may be in a position to end its cycle of rate increases. The benchmark 10-year note was up 5/32 at 100 5/32, with a yield ($TNX : CBOE 10-Year Treasury Yield Index News , chart, profile, more Last: 51.08-0.05-0.10%
2:59pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 51.08, -0.05, -0.1%) of 5.1%. See Bond Report. Crude-oil futures turned lower in choppy trading as traders weighed a rise in U.S. inventories and the likelihood the Organization of the Petroleum Exporting Countries will keep its production quota unchanged, against a smaller-than-expected increase in gasoline stocks and fresh concerns over Iran's nuclear activities. The benchmark July contract was last down 24 cents at $71.05 a barrel, after having been as high as $71.90 earlier. See Futures Movers. Dow standouts Shares of General Motors Corp. (GM : General Motors Corporation News , chart, profile, more Last: 26.89-0.04-0.15%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 26.89, -0.04, -0.1%) fell 1% to $26.63 as the struggling automaker said U.S. vehicle sales in May tumbled 12.2%, to 345,157 units. Car sales dropped 16%, while truck sales dropped 9.7%. Alcoa Inc. (AA : alcoa inc com News , chart, profile, more Last: 32.44+0.72+2.27%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 32.44, +0.72, +2.3%) rose 2.1% to $32.40. The maker of aluminum products said it reached a tentative agreement with the United Steelworkers on a four-year labor contract covering approximately 9,000 workers at 15 locations. Also higher, shares of AT&T (T : AT&T Inc. News , chart, profile, more Last: 26.79+0.73+2.80%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 26.79, +0.73, +2.8%) rose 2.3% to $26.65 after CIBC World Markets upgraded the telephone operator to sector outperformer from sector performer, citing potential for strong relative earnings growth. Retailers in focus Retailers, for the most part, posted better-than-expected sales in May as consumers defied expectations to keep up a shopping spree that began in April. Pockets of strength were strongest among teen-wear retailers and some specialty retailers. But even a handful of department-store retailers, the perennial poor performers, surprised investors with solid sales. Read Retail Roundup. Among the discount retailers, Wal-Mart Stores Inc. (WMT : Wal-Mart Stores, Inc. News , chart, profile, more Last: 48.00-0.45-0.93%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 48.00, -0.45, -0.9%) said same-store sales, which strips out the effect of new store openings, rose 2.3% in May from a year ago, in line with the company's forecast. On Tuesday, the company's shares fell sharply after it warned over the weekend that it expected same-store sales to show a 2.3% increase for the month, at the low end of its previous forecast. The stock was off 29 cents at $48.16. Rival Target Corp. (TGT : target corp com News , chart, profile, more Last: 49.15+0.23+0.47%
2:48pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 49.15, +0.23, +0.5%) had a better month, with same-store sales in May rising 5.7%, ahead of Wall Street estimates. The stock gained 0.2% to $49.02. J.C. Penney (JCP : Penney (J.C.) Company, Inc. News , chart, profile, more Last: 64.34+3.50+5.75%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 64.34, +3.50, +5.8%) , BJ's Wholesale Club (BJ : bjs wholesale club inc com News , chart, profile, more Last: 30.12+0.62+2.10%
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 27.43, +0.27, +1.0%) and Federated Department Stores (FD : Federated Department Stores, Inc. News , chart, profile, more Last: 73.25+0.42+0.58%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 73.25, +0.42, +0.6%) were just some of the other retailers coming in with sales that topped analyst expectations. There were also a few disappointments. Gap Inc. (GPS : The Gap, Inc. News , chart, profile, more Last: 17.99-0.21-1.15%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 17.99, -0.21, -1.2%) continues to struggle as the clothing retailer posted a 6% decline in May same-store sales, above the 4.1% average estimate of analysts polled by Thomson First Call. And home-furnishings retailer Pier 1 Imports Inc. (PIR : Pier 1 Imports, Inc. News , chart, profile, more Last: 8.80+0.31+3.65%
2:48pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 8.80, +0.31, +3.7%) saw same-store sales fall 6.6%. Analysts polled by Thomson First Call had expected comparable sales to fall 5.3%. Check Best/worst Performing Retail Stocks. Restructuring Sun Microsystems Inc. (SUNW : Sun Microsystems Inc News , chart, profile, more Last: 4.46-0.17-3.67%
2:54pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 4.46, -0.17, -3.7%) said late Wednesday it would cut between 4,000 and 5,000 jobs over the next six months in a move that could save it $500 million annually. Its board also voted to eliminate its poison pill. The stock was off 21 cents at $4.42. See full story and David Callaway's Column. H.J. Heinz Co. (HNZ : H.J. Heinz Company News , chart, profile, more Last: 42.62+0.27+0.64%
2:49pm 06/01/2006
Delayed quote dataAdd to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: 42.62, +0.27, +0.6%) said it will cut 8% of its work force as the packaged-foods mainstay reported a drop in fourth-quarter net income over year-ago levels. Still, its results came in above Wall Street estimates. The Pittsburgh-based company, in the midst of a proxy battle, also raised its dividend. The stock was up 11 cents at $42.46. See full story.
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