) -- The Federal Reserve's plan to keep interest rates low stoked inflation fears, resulting in mixed results for stocks. Here are three stocks that hit 52-week highs.

3. Black & Decker

jumped 3.8% to $65.30. The maker of appliances and power tools has advanced 29% during the past three months.

Stanley Works

(SWK) - Get Report

plans to merge with Black & Decker in early November in an all-stock transaction.


: Black & Decker's third-quarter profit fell 35% to $55 million, or 91 cents a share, as revenue dropped 23% to $1.2 billion. Black & Decker's gross margin expanded from 35% to 36%, but its operating margin narrowed from 9% to 8%. The company held $822 million of cash and $1.7 billion of debt at the end of the third-quarter. Its return on equity, a measure of profitability, consistently beats the industry average.

Our take

: Our quantitative model rates Black & Decker "hold." Black & Decker has suffered from falling sales and profits during the past year. In light of the merger announcement, the shares have climbed 38% to $65.30 as investors bid them up to reflect deal value.

2. Stanley Works

(SWK) - Get Report

climbed 4% yesterday to $52.14. The maker of tools and industrial machinery has rallied 15% since the announcement of the Black & Decker deal.

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: Stanley Works' third-quarter net income plummeted 63% to $60 million, or 77 cents a share, as revenue dropped 16% to $936 million. The company's gross margin stretched from 43% to 47%, but its operating margin was unchanged at 14%. Stanley Works held $207 million of cash and $1.5 billion of debt at the end of the third quarter. Its quick ratio of 0.7 demonstrates less-than-ideal liquidity. But its 0.8 debt-to-equity ratio is less than the industry average, indicating conservative leverage.

Our take

: Our quantitative model rates Stanley Works "buy" based on its independent fundamentals. Stanley Works forfeited 14% of gross sales and 58% of net profit over the past year amid recessionary pressures. Chief Executive John Lundgren said in a

Wall Street Journal

article yesterday that he expects the economy and consumer confidence to grow.

1. Hewlett-Packard

(HPQ) - Get Report

increased 0.7% to $51.36. The maker of computers, printers and servers has rallied 13% during the past three months. Yesterday, H-P's chief financial officer said at a


(BCS) - Get Report

conference that demand for printers had increased.


: Fiscal fourth-quarter net income jumped 14% to $2.4 billion, or 99 cents a share. Revenue fell 8% to $31 billion. Hewlett-Packard's gross margin widened from 25% to 26%, and its operating margin increased from 9% to 11%. The company holds $13 billion of cash, but a quick ratio of 0.8 is less-than-ideal. Its 0.4 debt-to-equity ratio is less than the industry average, indicating modest leverage.

Our take

: We rate Hewlett-Packard "buy." Its stock is cheaper than those of its peers based on all of our valuation measures, which include trailing earnings, projected earnings, book value, sales and cash flow. We give Hewlett-Packard a financial strength score of 9.9 out of 10 because of its consistent profitability and debt management. The stock has advanced 42% this year.

-- Reported by Jake Lynch in Boston.