Thursday, October 18, 2012

Housing starts data propels S&P 500 to third day of gains – IBM, ARNA, PFE, MTG, APOL, AONE

The benchmark S&P 500 rose for the third straight day on Wednesday after data released showed that housing starts hit a four-year high.

The Dow Jones Industrial Average was however under pressure after IBM posted weak results for the third quarter.

The U.S. Commerce Department said that housing starts rose 15 percent in September, the fastest rise since July 2008, and an indication that the nascent recovery in the housing recovery was gradually spreading to the economy at large.

The PHLX Housing Index also rose nearly 3 percent.

International Business Machines Corp.(NYSE:IBM)‘s results disappointed the markets after the company reported results that fell short of analyst expectations. The shares in the company fell nearly 5 percent, dragging down the Dow on which IBM has a heavy weightage. IBM closed at $200.63 a share.

The World's largest chip maker also lost about 2.5 percent to close at $21.79, after it guided for a weaker outlook. The S&P technology sector index slid 0.8 percent and was the only loser among the S&P 500's 10 industry sectors on Wednesday.

It’s just the start of the earnings season, but so far it has been much better than expected. Of the fourteen percent of S&P 500 companies that have already reported earnings, 65 percent have beaten analysts' expectations, ahead of the long-term average of 62 percent.

The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 5.22 points, or 0.04 percent, to 13,557 at the close. The S&P 500(INDEXSP:.INX) gained 5.99 points, or 0.41 percent, to finish at 1,460.91. The NASDAQ Composite (INDEXNASDAQ:.IXIC) advanced 2.95 points, or 0.10 percent, to close at 3,104.12.

Over the past three days, the S&P 500 has gained 2.3 percent - its best three-day advance in more than a month. The benchmark index is now just 0.33 percent off its 2012 closing high.

Pfizer Inc.(NYSE:PFE) continued to hit new highs and rose 0.16% to $25.84 after hitting a new high of $25.93.

MGIC Investment Corp.(NYSE:MTG) shares soared 20.70% after the firm S&P raised Radian & MGIC ratings after criteria revision.

Arena Pharmaceuticals, Inc.(NASDAQ:ARNA) was among the big gainers in the healthcare sector and added 6.71% to end the day at $9.99. The stock has shown massive rally of 434% so far this year. Moreover, the company announced an addition to its research and development pipeline, a new treatment for pulmonary arterial hypertension.

Apollo Group Inc(NASDAQ:APOL) had a rough session as the stock slumped 22% company trimmed its full-year revenue outlook to $3.65 billion to $3.8 billion, less than the $4.07 billion analysts were looking for. Moreover, multiple analysts downgraded the stock following a weak earnings report.

A123 Systems, Inc.(NASDAQ:AONE) tumbled another 11.50% after falling 75% in the previous trading session. The company  said on Tuesday that it is likely to default on its debt obligations and it would soon seek bankruptcy protection. The company revealed this is a regulatory filing with the Securities and Exchange Commission.

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