US close: Dow rallies to close in good health
Wall St rallied to finish the day healthily in the blue despite early losses as oil prices surged past $120 per barrel and Fannie Mae slumped into the red.
The Dow ended up 51 at 13,020. Nasdaq gained 19 at 2,483 and the S&P 500 added 10 at 1,418.
Oil stocks led the recovery as price of crude hit $122 per barrel. Tech stocks also rallied on talk that despite all of the bluster over the weekend Microsoft could yet end up acquiring Yahoo.
Federal National Mortgage Association, colloquially known as Fannie Mae, is to raise another $6bn in capital and slash its dividend after huge write-downs plunged it into the red in the first quarter.
The largest buyer of US home loans reported a first quarter net loss of $2.19bn, down from a net profit of $961m a year earlier, as it took a $4.4bn hit on losses on derivatives and trading securities plus a $3.2bn charge for credit-related expenses. The shares rose by 9%.
UBS is to cut 7% of its workforce, or roughly 5,500 jobs after another thumping quarterly loss. UBS also confirmed it is selling $15bn in subprime and other mortgage-based debt from its portfolio to BlackRock.
Sara Lee warned that annual profit this year will be lower than previously indicated. Countrywide Financial was also out of favour even though the Wall Street Journal claimed that Bank of America is still committed to its proposed takeover of the mortgage lender.
Fund manager Legg Mason lost $255m in the fourth quarter of its financial year after bailing out money-market funds hurt by investments in debt backed by sub-prime mortgages.
Cosmetics company Estee Lauder is smelling of roses, however, after lifting its full-year profit forecast from earnings per share in the range of $2.28 - $2.40 to a range of $2.34 - $2.40.
Brewer Molson Coors saw net income surge ahead for the first quarter thanks to strong performance in Canada and the US.
Gold ended the day slightly up at about $877 an ounce.
Dow Jones I.A - Risers
Alcoa Inc (AA) $38.00 +3.01%
Amer Intl Group Inc (AIG) $48.50 +2.34%
Microsoft Corporation (MSFT) $29.70 +2.13%
Intel Corporation (INTC) $23.58 +1.42%
Chevron Corp (CVX) $96.87 +1.31%
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Walt Disney-Disney C (DIS) $33.71 +1.26%
Hewlett Packard Co (HPQ) $48.64 +0.85%
Bk Of America Cp (BAC) $39.24 +0.69%
International Business Machines (IBM) $122.82 +0.65%
Exxon Mobil Cp (XOM) $90.07 +0.63%
Dow Jones I.A - Fallers
Wal Mart Stores (WMT) $56.35 -1.09%
AT&T Inc. (T) $39.46 -0.97%
McDonald's Corporation (MCD) $60.49 -0.62%
Gen Electric Co (GE) $33.00 -0.54%
Merck Co Inc (MRK) $38.79 -0.48%
Johnson And Johns Dc (JNJ) $67.61 -0.43%
Pfizer Inc (PFE) $20.44 -0.39%
Coca Cola Co The (KO) $58.19 -0.33%
Home Depot Inc (HD) $29.29 -0.27%
Du Pont E I De Nem (DD) $49.65 -0.10%
