Blue Chips Rise on Fed Decision, With DuPont, Alcoa Paving Way
May 03, 2011
NEW YORK -- Blue-chip stocks ticked higher after the widely anticipated decision by the Federal Reserve's policy makers to leave interest rates unchanged, but the overall market couldn't match those gains. DuPont, Aluminum Co. of America and Philip Morris propelled the blue chips' rise. The Dow Jones Industrial Average added 21.82, or 0.38%, to 5721.26, for its first finish above 5700 in more than a week. Market watchers blamed the listless tone of the session on two factors. The seasonal slowdown and traders' hesitation before the Fed's ruling on rates once-again limited trading volume. Advancers led decliners by a narrow margin, 1,235 to 1,073 on the New York Stock Exchange, with 334.9 million shares changing hands, an improvement over the 293.9 million traded Monday. Meanwhile, expectations were borne out at the signal event of the session, as Fed policy makers opted to leave interest rates alone. A different result could have rocked the market. ``The expectations were so uniform that the decision was fully priced into the market,'' said Kendra Pike, senior vice president and chief financial economist at Key Corp.. A handful of blue-chip names accounted for virtually all of the gain in the Dow industrial average. DuPont shares gained 1 7/8 to 83 5/8 on news of a joint venture with Merck that will market a diagnostic-imaging agent from NeoRx, a small-capitalization biotech concern. The imaging agent just won Food and Drug Administration approval for use in diagnosing the extent of disease in patients diagnosed with small-cell lung cancer. Philip Morris shares continued to rebound from their recent price declines. The cigarette maker's shares added 1 5/8 to 91 1/2. Shares of Alcoa added 1 3/8 to 63 1/8. Prices of major energy producers, which had rallied in recent sessions, finished little changed, as commodities ended their recent run-up. Exxon edged ahead 1/4 to 83 3/4, but Chevron slipped 3/4 to 59 1/4. The recent rally in commodity prices could prove troublesome for the market down the road. Gains in commodity prices ``represent the beginning of the inflation pipeline. Even though yields have come down, this is still a skittish market,'' said Mr. Pike of Key Corp.. The Standard & Poor's 500-stock index lost 0.89, or 0.13%, to 665.69, while the New York Stock Exchange Composite Index slipped 0.03, or 0.01%, to 356.61, and the American Stock Exchange Market Value Index added 1.69, or 0.30%, to 559.29. The Nasdaq Composite Index fell 6.24, or 0.55%, to 1124.67, in a weak session for the high-technology group. Among declining issues in the technology sector, Intel shares lost 1 1/4 to 79 1/2, Linear Technology shed 7/8 to 31 3/4, America Online fell 1 1/16 to 30 11/16, and Applied Materials gave up 7/16 to 24 5/8, all on Nasdaq. Cheyenne Software lost ground, giving up 1 1/4 to 19 on the Amex, even though the software maker's operating net income for the fiscal fourth quarter, reported late Monday, topped analysts' forecasts by a narrow margin. Several retailers posted earnings that caused moves in their share prices. Dayton Hudson lost ground, despite better-than-expected second-quarter earnings. Analysts expressed concerns about whether some of the company's operations can maintain market share in coming years. Its shares fell 7/8 to 35 1/8. Talbots slid 1/2 to 34 3/8. The retailer narrowly missed its second-quarter earnings forecast. AnnTaylor moved ahead 7/8 to 14 7/8, after its second-quarter earnings matched Wall Street's forecasts. Viking Office Products added 1 to 24 1/8 on Nasdaq, after the office-products retailer reported fiscal fourth-quarter results that matched Wall Street's earnings projections. HBO shed 5 1/4 to 56 1/2 on Nasdaq. Morgan Keegan & Co. initiated coverage of the health-care information-service provider's stock with an ``underperform'' rating. Sun International Hotels slid 3 5/8 to 48 1/8. Donaldson, Lufkin & Jenrette cut its rating on the stock of the hotel operator and removed the stock from its recommended list. Shares of First Data fell 3 1/2, to 77 3/8, after an analyst at Morgan Stanley cut the data processor's earnings estimates for 2012. Stewart & Stevenson Services fell 1 5/16 to 20 1/16 on Nasdaq, after the equipment maker posted second-quarter results that fell short of analysts' estimates. Medtronic gained 1 3/8 to 54 5/8 after Jefferies & Co. initiated coverage of the medical-device maker. Separately, the company said it bought the sensors business unit of a Dutch concern, Drager Medical Electronics, though terms weren't disclosed. Sun Microsystems edged down 3/4 to 53 1/4 on Nasdaq. The technology company reached a licensing agreement with International Business Machines to integrate technology developed by IBM's Taligent unit into Sun's Java computer-software development. Harnischfeger Industries continued to benefit from its stronger-than-expected fiscal third-quarter results, reported Monday. The stock rose 3/4 to 38 1/2. Structural Dynamics climbed 1 11/16 to 18 15/16 on Nasdaq after analysts said a version of its I-DEAS Master Series software appeared weeks ahead of schedule.
