Dow Finishes Up 100 as Health Care Becomes Law
NEW YORK (
) -- The Dow advanced more than 100 points Tuesday, despite a mixed assessment on the U.S. housing market, after President Obama signed a comprehensive health care reform package into law.
The
Dow Jones Industrial Average
added 103 points, or 1%, to 10,889. The
S&P 500
gained 8 points, or 0.7%, to 1174, and the
Nasdaq
went ahead by 20 points, or 0.8%, to 2415.
Bob Auer, senior portfolio manager for Auer Growth, attributed recent bullishness to the fact that there's nothing else competing for the money.
"There really is just one thing, and it's been said before, but it can't be ignored: There's nothing competing for the money. It's not like you can go into a bank and ask for a CD," Auer said, adding that municipals are a dicey situation, too. "The
Fed
said it's going to keep rates low for a long time. They basically turned on the spigot. Nothing is going to compete with the stock market right now."
Sweeping health care reform became law this afternoon as
signed landmark legislation that extends health insurance to the roughly 30 million people who aren't currently covered, according to estimates.
Shares across the health care sector gave back some of their gains with
Cigna
(CI) - Get Report
trading 0.9% lower to $36.94 and
UnitedHealth Group
(UNH) - Get Report
down 0.4%, to $33.16.
Aetna
(AET)
, however, improved 1%, to $34.99.
Shares of government-sponsored mortgage finance enterprises
Fannie Mae
(FNM)
and
Freddie Mac
(FRE)
traded ahead by nearly 1% and 0.8%, respectively. Treasury Secretary Timothy Geithner told the House Financial Services Committee that the U.S. housing finance system needs to be overhauled, but he assured investors that the government is fully committed to backing Fannie and Freddie.
Greece continues to expect a European solution to its debt crisis. According to
Reuters
, Finance Minister George Papaconstantinou anticipates a positive result from a European Union summit on March 25 and 26.
Overseas, Hong Kong's Hang Seng gained 0.3%, and Japan's Nikkei slipped 0.5%. The FTSE in London was rising 0.4%, and the DAX in Frankfurt was up 0.08%.
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The Economy
The housing market was the focus of Tuesday's data, which pointed to marginal improvements in a still-weak industry.
The National Association of Realtors said existing-home sales slipped 0.6% to an annual rate of 5.02 million units from 5.05 million units in January. The level was slightly better than the 5 million-unit level that economists had been projecting,
but still marks its lowest showing in eight months.
Home prices, as measured by the Federal Housing Finance Agency's monthly house price index, dipped 0.6% on a seasonally adjusted basis from December to January. Economists had been expecting a decrease of 0.9%.
After trailing in the red for much of the day, the
SPDR S&P Homebuilders ETF
(XHB) - Get Report
improved 0.8%, at $16.93.
Shares for home fix-up conglomerate
Home Depot
(HD) - Get Report
slid steeper than any other on the Dow, down 0.2% to $32.59.
On the other end,
Caterpillar
(CAT) - Get Report
,
Kraft Foods
(KFT)
and
Pfizer
(PFE) - Get Report
guided the blue-chip average higher, adding 4.1%, 3.5% and 2.3%, respectively.
Shares of
Citigroup
(C) - Get Report
,
Ford
(F) - Get Report
and
Bank of America
(BAC) - Get Report
were, again, the most actively traded on the
New York Stock Exchange
, which had a listed volume at over 4.4 billion.
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Company News
KB Home
(KBH) - Get Report
disappointed with a wider-than-expected first-quarter loss. Sales were down 14% and also missed estimates. The stock shed 29 cents, or 1.7%, to $17.15.
Walgreen
(WAG)
came in a penny shy of Wall Street's second-quarter earnings estimates and reported negative same-store sales, although overall sales rose 3%. The stock added 58 cents, or 1.6%, to $35.91.
Baidu
(BIDU) - Get Report
rose 2.6% on a price-target increase from Goldman Sachs and on
Google's
(GOOG) - Get Report
decision to redirect Web traffic to Hong Kong to avoid censorship of its site by the Chinese government.
Time Warner
(TWX)
is offering the highest bid for Hollywood studio Metro-Goldwyn-Mayer, beating
Lions Gate Entertainment
(LGF)
and billionaire Len Blavatnik's
Access Industries
, according to
Reuters
.
Triumph Group
(TGI) - Get Report
will buy
Vought Aircraft
from private-equity firm Carlyle for roughly $1.4 billion. Triumph's stock jumped $6.24, or 10.2%, to $67.46.
Citing strength in its Acrobat and Omniture programs,
Adobe Systems
(ADBE) - Get Report
said late Tuesday that sales rose 9% in the first quarter. A bottom-line beat and favorable guidance also helped shares rise over 4% in extended trading.
Also after the bell, brokerage firm
MF Global
(MF)
named former New Jersey Governor and
Goldman Sachs
(GS) - Get Report
chief Jon Corzine as its newest CEO.
Elsewhere, a deviation from protocol at
Delta's
(DAL) - Get Report
Northwest Airlines may result in a near $1.5 million fine from the Federal Aviation Administration. The FAA cited problems with reviews of windshield wiring.
Kenneth Feinberg, the Obama administration's so-called pay czar, said 2010 wages will be about 15% less, on average, for top executives at the firms yet to repay ample TARP assistance, according to
The Associated Press
. The firms include
AIG
(AIG) - Get Report
,
General Motors
,
Chrysler
,
GMAC
and
Chrysler Financial
. The
AP
also said Feinberg will conduct a "look back," asking for details on previous compensation for all 419 firms that received taxpayer bailout help.
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Commodities and the Dollar
After the bell, the American Petroleum Institute estimated that crude stocks jumped by 7.51 million barrels last week, according to Bloomberg. Analysts polled by Platts were projecting a much lighter buildup of 1.67 million barrels in crude oil supplies. The Energy Information Administration will release its own inventory data on Wednesday at 10:30 a.m. EST.
Crude oil for May delivery settled at $81.91 a barrel after adding 31 cents, while the April
gold contract settled $4.20 higher at $1,103.70 an ounce.
The
dollar was trading higher against a basket of currencies, with the dollar index up by 0.3%.
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Treasuries
A two-year note auction worth $44 billion resulted in a high yield of 1% and a slightly below average bid-to-cover ratio of 3. Foreign buyers and other indirect bidders scooped up 34.8% of the competitive bids.
The two-year note fell 1/32, lifting the yield to 0.981%. The benchmark 10-year Treasury dropped 7/32, pushing the yield up to 3.687%. The 30-year bond fell 17/32, raising the yield to 4.603%.
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--Written by Melinda Peer and Sung Moss in New York
.
