Stocks End Higher on Iraq News - TheStreet

Stocks End Higher on Iraq News

A military official confirms that two of Hussein's sons are dead.
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Updated from 4:07 p.m. EDT

Stocks finished with gains Tuesday after a U.S. military official confirmed that two of Saddam Hussein's sons were killed in a military raid.

The

Dow Jones Industrial Average

gained 62 points, or 0.7%, at 9158, after being as low as 9037 earlier. The

Nasdaq

rose 25 points, or 1.5%, at 1706, while the

S&P 500

lifted 9 points, or 1%, at 988.

Lt. Gen. Richard S. Sanchez, the allied commander in Iraq, said Hussein's sons, Uday and Qusay, were among four people killed in a shootout with U.S. troops in Northern Iraq. 200 American troops participated in a raid after intelligence indicated that Hussein's sons were in the area. The U.S. had a $15 million bounty for each of the men, who were critical to their father's regime.

"One thing that has been weighing on the markets has been President Bush's approval rating," said Brian Pears, a trader at Victory Capital Management. "The capture of Hussein's sons may help him." Bush's poll ratings have slipped in recent weeks, amid controversy over his State of the Union address and concerns about a weak economy.

The 10-year Treasury note ended higher, with the yield falling to 4.18%. "This is the first day that it has gone up in quite a while," said Pears. "It was due for a bounce. People want to see some stability."

The averages were buffeted earlier by images of a fire atop the Eiffel Tower. The Parisian landmark was evacuated as smoke poured from the third floor Tuesday, police told

CNN

.

The blaze began in an electrical box in a "technical room" housing antenna equipment, they added.

Advancing stocks led decliners by a narrow margin on the

New York Stock Exchange

but had a wider lead on the Nasdaq. Volume was light with 1.4 billion shares traded on the Big Board and 1.7 billion shares traded on the Nasdaq.

"The market has been down for four of the last five days," said Bob Basel, a trader at Salomon Smith Barney. "I think we are seeing some short-covering and a few buyers step in."

In corporate news,

Texas Instruments

(TXN) - Get Report

reported higher second-quarter earnings that beat analysts' forecasts on stronger chip sales. But both revenue and profit estimates had been lowered a month earlier. The company also reported a late-quarter rise in demand for cell phones in Asia. Shares were up $1.37, or 7.7%, to $19.25.

Intel

(INTC) - Get Report

, meanwhile, lifted 34 cents, or 1.4%, to $24.42.

Infineon

(IFX)

was up 9 cents, or 0.7%, to $12.69 after Europe's second-largest maker of semiconductors reported a narrower loss in the fiscal third quarter and said demand is expected to increase with the help of equipment replacement.

"The recent market action is saying stocks are currently overvalued, with earnings reports and economic numbers that don't justify current prices," said Robert Pavlik, portfolio manager at Oaktree Asset Management. "Although I remain bullish on equities long term, a more prudent approach would be to wait for confirmation that the economy is showing continued signs of a rebound."

In merger news,

Lehman Brothers

(LEH)

announced a definitive agreement to acquire

Neuberger Berman

(NEU) - Get Report

for cash and stock worth about $41.48 a share, or $2.63 billion. The pact ends a month-long courtship for one of the country's premier asset managers.

Elsewhere,

Countrywide Financial

(CFC)

said earnings rose to $383 million, or $2.74 a share, from $191 million, or $1.48 a share, a year earlier. The results were 10 cents below expectations, however. Still, the stock gained $4.60, or 7%, to $70.32.

Corning

(GLW) - Get Report

posted a narrower quarterly loss late Monday, beating analysts' forecasts with the help of liquid crystal panel and automotive technology sales. The world's largest fiber-optic cable producer also said third-quarter results could surpass analysts' estimates.

Colgate-Palmolive

(CL) - Get Report

said second-quarter profit rose on higher revenue, aided by new product sales and the weaker dollar. The results were in line with Wall Street forecasts.

Real estate services company

Cendant

(CD)

also beat expectations by reporting a surge in second-quarter earnings. It also raised its profit outlook for the year.

Among drug stocks,

Millennium Pharmaceuticals

(MLNM)

was off 57 cents, or 4%, to $13.13 after widening its revenue-loss projection for the year.

Ameritrade

(AMTD) - Get Report

tacked on $1.15, or 14%, to $9.42 after the online broker said it earned $49.9 million, or 12 cents a share, up from $5.8 million, or 3 cents a share, in the year-ago period. Revenue rose to $188.5 million from $100.3 million.

In the airline sector,

Alaska Air

(ALK) - Get Report

had earnings of $900,000, or 3 cents a share, in the second quarter. The results beat analysts' estimates for a 34-cent loss. Shares were up $1.40, or 6.2%, to $24.16.

Finnish mobile-phone maker

Nokia

(NOK) - Get Report

predicted it will surpass rival

Motorola

(MOT)

in China in the second half of 2003,

Reuters

reported. Nokia shares rose 37 cents, or 2.6%, to $14.73.

In a research note, Deutsche Securities raised its price target on

AOL Time Warner

(AOL)

to $21 from $19, reaffirming a buy rating. The firm expects AOL to raise its guidance in its second-quarter report Wednesday, as well as to accelerate debt paydown, giving investors more confidence.

RadioShack

(RSH)

gained 39 cents, or 1.5%, to $26.40 after the consumer electronics retailer said second-quarter earnings were $57.5 million, or 34 cents a share, compared with $51.8 million, or 28 cents a share, in the year-earlier period.

Other stocks that saw action before reporting earnings after the close Tuesday include Internet retailer

Amazon.com

(AMZN) - Get Report

, biotech company

Amgen

(AMGN) - Get Report

and computer-hardware maker

Sun Microsystems

(SUNW) - Get Report

.

Overseas markets were mixed, with London's FTSE 100 up marginally to 4079 and Germany's Xetra DAX up to 3318. In Asia, Japan's Nikkei fell 0.4% to 9485, while Hong Kong's Hang Seng dropped 0.9% to 10,008.

Crude oil for future delivery was lower in London, and the dollar was stronger against the yen but weaker vs. the euro.