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The Dow posted its biggest one-day gain in four months, but shares of American International Group (AIG) fell. The Dow climbed 135.23 points to close at 10,540.93. Besides, both the Nasdaq and the S&P posted gains. The Nasdaq rose 31.79 to close at 2,005.67, while the S&P closed at 1,181.41, after rising 16.05 points.

Today, U.S. stocks had their biggest rally of the year as oil prices fell. Crude oil for May delivery declined 0.4 percent to $53.99 a barrel in New York as a government report showed that U.S. oil inventories rose for a seventh straight week. Besides, Micron Technology Inc. reported better-than-expected earnings, helping computer related shares. It climbed 36 cents to $10.48, and net income for the quarter ended March 3 was 17 cents a share. However, analysts expected 15 cents a share.

American International Group (AIG), the world’s largest insurer, fell $1.04 to $57.16 a share. The insurer, which this month ousted its chief executive officer, said that it engaged in false accounting practices that may have inflated the company’s net worth by as much as 2 percent, or $1.7 billion, during the past 14 years. Also, AIG delayed filing its annual report for a second time, and said that it may restate earnings in last year’s fourth quarter.

The airline sector was strong today, which helped to lift the Dow Jones transportation average by 1.7 percent. AMR Corp. paced an advance among carriers after Merrill Lynch &Co. recommended investors buy shares of the parent of American Airlines. The 10-member Amex Airline Index jumped 5.2 percent, the biggest advance since beginnings of December.

About 28 percent of the number of households with internet connections is expected to file their taxes online in this tax season. The proliferation of e-filling is good news for companies, such as Adobe Systems, that help the federal government process tax forms. Adobe sells its Acrobat product to the Internal Revenue Service.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

U.S. stocks fell to their lowest in at least two months, due to an increase in energy prices. Besides, the NCR Corp. had the biggest one-day loss since its 1996 split from AT&T Corp., after Chief Executive Officer Mark Hurd resigned. The Dow fell 79.95 points to close at 10,405.70. Besides, the Nasdaq and the S&P fell today. The Nasdaq closed at 1,973.88, after falling 18.64 points, while the S&P fell 8.92 points to close at 1,165.36.

Hewlett-Packard Co., the world’s second personal computer maker, named Mark Hurd Chief Executive to replaced the ousted Carly Fiorina. Word of the decision sent NCR shares plunging 17 percent, and Hewlett-Packard up 9 percent. Hurd will be in charge with making decisions about where to take H-P, which has Dell and IBM as its big competitors. Hurd worked for NCR for 25 years, taking the chief executive position two years ago. During his time as CEO, NCR’s stock rose four-fold.

Among the Dow components, a 4.7 percent slump in Caterpillar shares weighted heavily. Also, shares of Pfizer, DuPont, Alcoa, Honeywell, and McDonalds dragged the Dow lower. Meanwhile, American International Group rose 2.1 percent due to the appointment of a new chairman and remarks from New York Attorney General Eliot Spitzer that his investigations into the insurer will be resolved soon.

MCI Inc. accepted a $7.64 billion takeover offer from Verizon Communications Inc., and rejected a higher bid of $8.45 billion from Qwest Communications International Inc. However, Qwest Chief Executive Officer Richard Notebaert may respond to the offer by increasing his bid to as high as $8.95 billion. Verizon said it will pay $23.50 in cash and stock, compared with Qwest’s $26 a share.

Crude for May delivery edged up 18 cents to $54.23 a barrel. The dollar rally against European currencies stalled as the British pound gained after U.K bank Barclays said that it sees an interest rate hike next week in Britain.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

U. S. stocks ended higher today as a decline in crude-oil prices drew investors back into equities. The Dow rose 42.78 points to close at 10,485.65. Besides, both the Nasdaq and the S&P posted gains. The Nasdaq closed at 1,992.52, after rising 1.46 points, while the S&P rose 2.86 points to close at 1,174.28. Today, may crude fell 1.4 percent to close at $54.05 a barrel on the New York Mercantile Exchange.

SunGard Data Systems Inc., whose software handles most Nasdaq stock market trades, had the biggest rally in the S&P after seven buyout firms agreed to acquire the company for 10.4 billion. Silver Lake partners is leading a group of buyout firms that will pay $36 a share for SunGard, which is 44 percent more than the stock price on March 21, when the company said it received an offer. The purchase is the largest takeover by buyout firms since 1989. SunGard surged $2.81 to close at $34.36.

Qwest Communications International Inc., gave MCI Inc. one week to accept its $8.45 billion takeover offer. According to Richard Notebaert, Qwest Chief Executive Officer, the offer will be withdrawn if MCI doesn’t agree to it by midnight April 5. Several MCI shareholders have critiziced the Verizon bid because it is too low. Instead, investors had encouraged Qwest’s bids.

Shares of healthcare provider HCA surged 8% after the hospital chain boosted first quarter earnings guidance and set plans to sell 10 hospitals. HCA said it would make 88 cents to 93 cents a share for the quarter. Besides, HCA hired Merrill Lynch to help it divest itself of 10 acute-care hospitals in six states. The 10 hospitals had 2004 revenue of $654 million.

After a temblor with a magnitude of 8.7 was registered off the coast of Indonesia, shares of earthquake-protection technology company Taylor Devices surged more than 40 percent. The Pacific Tsunami Warning Center said a new tsunami was possible and advised authorities in the various countries in the region to evacuate coastal areas. Taylor Devices, which gained more than 100 percent after the December catastrophe, ended up 44.7 percent to close at $4.79.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Today’s market started out strong with investors preparing for a long weekend. News from the U.S. Commerce Department as well as optimistic reports from GE gave the market a boost after the difficult week. The Dow fell 13.15 points to close at 10,422.87, while the NASDAQ gained 0.84 points closing at 1,991.06. Additionally the S&P closed at 1,171.42 after losing 1.11 points.

The United States Commerce Department announced today that new homes sales are at the second highest level in history. New homes available on the market rose to a record 444,000, while the sales rate rose to 1.304 million, the largest percentage increase in four years. Additionally, the Department reported that new orders for durable goods has increased 0.3 percent.

The Commerce Department’s announcement led to improved reports from GE later this morning. GE increased their first quarter expectations by one cent per share and priced a $2.1 billion stock offering of its Genworth Financial insurance unit. In addition, GE announced their intention to purchase $500 million Class B stock. The entire transaction will be worth $2.6 billion for GE.

Thirty-year mortgages went above 6% this week in the light of recent interest rate hikes. This is the sixth consecutive hike for fixed interest mortgages. Most analysts are surprised that the rate has remained so low with the recent tightening actions adopted by the Federal Open Market Committee., so the news did not come as much of a surprise. Although the rate has risen, it still remains very affordable, thus explaining the increase in the purchases of new homes in February.

Kmart Corp. received good news today as Sears, Roebuck, & Co. stockholders approved the company’s buyout of their stock with a 69% majority. The deal is worth $12.3 billion. Earlier in the day, the Kmart shareholders had approved the deal as well. After the announcements were made, Kmart shares gained 3.6 percent while Sears shares dropped 11.7 percent.

After years of low airline prices, airlines have recently been upping the costs of travel. Recently, there has been a $10 increase for round-trip flights, a trend that is likely to repeat itself. United Airlines Chairman and CEO, Glenn Tilton, told his employees that “It appears that after some tentativeness in the marketplace, the latest fare increase may well stick.” Online travel companies have backed up his claim saying that they have seen no difference in bookings since the rate hike.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

The Dow was down again today although other parts of the market did make a slight comeback. After falling 14.49 points, the Dow closed at 10,456.02. However, the Nasdaq rose 0.88 points to close at 1,990.22, while the S&P gained 0.82 point closing at 1,172.53.

In today’s after-hours trading, crude jumped to a new all-time high. Earlier today a deadly blast occurred in the nation’s third largest refinery, producing 435,000 barrels per day. April gasoline traded at 1.608 per gallon, a record high, while May crude traded at $54.31 per barrel.

Social Security left more bad news today as the Social Security programs trustees announced that the trust fund will have to cut benefits starting in 2041, a year earlier than the government expected. This is good news for the Bush administration as they try to push Social Security reform in the way of privatized accounts. According to Treasurey Secretary John Snow, “The numbers published today leave no question that Social Security reform is needed, and it is needed soon.”

In Starbucks efforts to join in the coffee liqueur business, they lost a major stockholder. PaxWorld Funds, a “socially-responsible” fund, announced that they have sold off their estimated $23.4 million investments in Starbucks over the last few months. Anita Green, PaxWorld’s vice-president of social research said, “We did ask them to reconsider. We felt it was not in line in with everything they say about themselves or their mission statement.” Starbucks, however, seems to feel that this new venture is highly lucrative, and according to reviews of the liqueur, they may be correct.

President Bush announced today that the United States will be signing a pact, the Security and Prosperity Partnership of North America, with Mexico and Canada encouraging greater cooperation in security and economic issues. The pact will help the leaders of these countries to plan better methods of security for both cargo and passengers, as well as provide methods through which the countries can work together to make North America even more of a leader in a variety of industries.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

With Feds raising the interest rate, the market took a plunge today. The Dow dropped 94.37 points today, closing at 10,471.02. The Nasdaq and the S&P lost significantly today as well with the Nasdaq closing at 1,989.50 after falling 18.01 points, while the S&P lost 11.92 points to close at 1,171.86.

The Federal Reserve announced in their meeting today that they were concerned about inflation and would be raising interest rates. The February PPI (Producer Price Index) rose 2.8 percent within the last year, the quickest gain in almost ten years. Interest rates will be raised to 2.75 percent from the current 2.5 percent, while discount rates were raised from 3.5 percent to 3.75 percent.

Retek, Inc. has been stuck in the midst of a bidding war for some time now. The producer of retail-management software has been receiving lucrative bids from both Oracle Corp. and SAP, Europe’s largest software group. Today, Oracle placed a bid that Retek could not decline and that SAP could not beat. SAP pulled out today, and Oracle will be purchasing Retek for $631 million, or $11.25 per share. According to Larry Ellison, CEO of Oracle, the strategic move will help strengthen Oracle’s position “strengthens (Oracle’s) position in the retail applications market globally.”

AIG sent their two top executives packing today. AIG has been under investigation by the SEC for possibly manipulating financial statements to paint a picture that could be much different than the truth. Chief Financial Officer Howard Smith, and Christian Milton, a vice president for reinsurance were sent home today after invoking their Fifth Amendment rights when dealing with federal investigators.

Tobacco companies are currently facing a $280 billion racketeering suit claiming that they have ill-gotten gains. However, today sources reported that the companies may be seeking to settle the suit with the Justice Department through a court-appointed mediator. Altria suffered yesterday after news that the U.S. Supreme Court would not be considering an appeal to overturn a $10 million judgment against Altria made in favor of a California smoker who sued because he contracted lung cancer. Tobacco stocks for all companies rose this afternoon.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Today’s market was disappointing but not a big surprise with record high oil prices and fears that the Federal Reserve will raise interest rates. The Dow tumbled today, losing 64.28 points to close at 10,565.39. Additionally, the Nasdaq fell 0.28 points, closing at 2,007.51, while the S&P closed at 1,183.78 after losing 5.87 points.

IAC/InterActive announced that they would be purchasing Ask Jeeves, one of the top five search engines on the Internet. Barry Diller, CEO of IAC/InterActive, is working to expand his web presence; with Expedia, Match.com, Ticketmaster, and Citysearch already in hand, adding Ask Jeeves will allow Diller to compete with other rival companies such as Microsoft, Google, and Yahoo.

Time Warner came to an agreement today with the Securities and Exchange Commission (SEC) concerning the fraud case that has been going on. Time Warner is required to restate the advertising revenues from the fourth quarter of 2000 through the end of 2002. Additionally, they will be hiring an independent examiner to look at some other questionable accounts from the same time period. They will be paying the SEC $300 million in order to settle the fraud case.

Medicis Pharmaceutical Corp. has announced that it will be purchasing Inamed Corp. for $2.8 billion in a cash and stock deal. The combination of Medicis, the major producer of skin care treatment products, and Inamed, the maker of breast implants, will form a company that should bring in around $700 million per year. Inamed shares shot up $1.97 after the announcement while Medicis lost $2.57.

With all the concern over security these days, United Technologies Corp. has decided to purchase privately-held Lenel Systems International. The purchase price is $400 million. Lenel, with their 150 employees, manufactures several different types of security systems including fingerprint scanners and security software. The purchase should help boost United Tech’s profits for the year.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

This was a week of losses for the market as a spike in oil prices, worries over inflation, and rising interest rates decreased confidence in investors about the outlook for the economy. The Dow fell 77.15 points to close at 10,774.36. Besides, both the Nasdaq and the S&P fell today. The Nasdaq fell 18.12 points to close at 2,041.60, while the S&P closed at 1,200.08, after falling 9.17 points.

According to Robert Pavlik, portfolio manager at Oaktree Asset Management, the poor performance of the stock market this week was due to “the price of oil, a weaker dollar, and Treasury yields backing up to 4.60 percent.” Among the Dow components, American International Group (AIG), Intel (INTC), and Hewlett-Packard (HPQ) were the worst performers. On the other hand, Honeywell International (HON), Exxon Mobil (XOM), and Alcoa Corp (AA) were among the blue-chip barometer’s best performers.

According to the Commerce Department, the U.S trade deficit widened by 4.5 percent in January to a seasonally adjusted $58.3 billion, which is the second highest in record. Besides, imports rose 1.9 percent to a record $159.1 billion, while exports gained 0.4 percent to $100.8 billion. Besides, there was a high in oil prices. Crude futures traded higher after falling to a low of $52.50 a barrel. The April contract ended up 89 cents at $54.43 on the New York Mercantile Exchange.

Kmart Holding Corp. surged $14.89, or 13 percent, to $127. UBS AG analyst Gary Balter upgraded Kmart to “buy” from “neutral” and said that shares may reach $160 over the next 12 months. The move powered Kmart’s shares to a peak of $128.88, which is a nearly 15 percent jump before closing today at $127.61, up $15.51. Kmart is expected to complete its buyout of Sears at the end of the month.

U. S. stocks dropped as Intel Corp.’s sales forecast failed to lift computer-related shares. Intel dropped 65 cents, or 2.6 percent, to $24.20 after earlier gaining 1 percent. The stock may had fallen because its 20 percent rally in the past five months already accounted for expectations of accelerated growth. The euro was up 0.1 percent against the dollar to $1.3453, while the dollar traded little changed against the Japanese yen at 103.87 yen.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

Today, U.S. stocks ended mixed. The Dow fell 6.72 points, to close at 10,626.35. However, both the Nasdaq and the S&P rose. The Nasdaq rose 0.67 points, to close at 2,016.42, while the S&P closed at 1,190.21, after rising 2.14 points.

Morgan Stanley, one of the world’s leading securities firm, reported earnings that exceeded analysts’ expectations. Its fiscal first-quarter net income rose 20 percent to $1.47 billion, which is the highest gain in five years. Besides, Goldman Sachs Group Inc. climbed 17 percent to a record $1.51 billion. Morgan Stanley, Goldman Sachs, and Lehman Brothers Holdings Inc., earned a combined $4.2 billion in the first quarter, which represents a 19 percent increase from last year.

Toys “R” Us Inc. agreed to be acquired by a private investment group for $6.6 billion. The investment group, which includes affiliates of Kohlberg Kravis Roberts & Co., Bain Capital Partners LLC and Vornado Realty Trust will pay $26.75 a share, plus an undisclosed amount of the retailer’s debt. The deal is expected to close by July, pending regulatory, and shareholders’ approval. Shares of Toys “R” Us finished the session at $26, rising $1.23.

Qwest Communications International raised its takeover bid for MCI Inc. to $8.45 billion, adding pressure on competitor Verizon Communications Inc. to increase a competing offer. Qwest said that it will pay $15.50 in stock and $10.50 in cash for each MCI share. Now, Verizon will have only five days to make a counter offer, should MCI decide that Qwest’s plan is superior. If MCI agrees to be bought by another company, Verizon would earn a $200 million fee from MCI for breaking the sale contract. Shares of MCI fell 50 cents to $23.25, Verizon fell 20 cents to $35.14, while Qwest dropped 13 cents to $3.69.

The U.S. light crude oil for April delivery fell 6 cents to close at $56.40 a barrel, after hitting a record high of $57.60 earlier in the afternoon. According to Mark Bryant, senior vice president at Brean Murray & Co., there is a danger of oil becoming a self-fulfilling prophecy of sorts. This means that at current levels, oil does not pose the same kind of threat to the economy it did in past decades.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter

U.S. stocks fell today due to reports on GM’s loss forecasts, and record-high oil prices. The Dow fell 112.03 points to close at 10,633.07. Besides, the Nasdaq and the S&P suffered losses. The Nasdaq closed at 2,015.75, after falling 19.23 points, while the S&P fell 9.68 points, to close at 1,188.07.

General Motor Corp., the world’s biggest automaker, forecasted its largest quarterly loss of $1.50 a share since 1992. GM shares dropped 14 percent, and bonds plunged as Standard & Poor’s lowered its outlook in the company to negative.  S&P rates GM bonds BBB- and Moody’s Investors Service rates the company Baa2, two steps above junk. Moody’s said today that it is still reviewing the ratings for a possible downgrade.

Another bad news for the economy included the report in oil prices. Crude oil surged to a $56.46 a barrel in New York, since a promise of increased output from OPEC failed to ease concern that demand is growing faster than demand. The OPEC, meeting in Isfahan, Iran, agreed to boost quotas by 500,000 barrels a day, or 1.9 percent. Besides, Ali al-Naimi, the Minister of Saudi oil, warned of higher demand this year.

Today, a government report showed that industrial production increased 0.3 percent in February after expanding 0.1 percent in January. Furthermore, other report showed that the U.S current account deficit widened to a record $187.9 billion from October through December, since Americans bought more imports. Meanwhile, construction of new U.S. houses rose 0.5 percent in February to a seasonally adjusted 2.195 million annualized units, which is the highest rate in 21 years.

J.P. Morgan Chase &Co. announced that it would pay $2 billion to settle an investor lawsuit. This settlement occurred one day before J.P. Morgan, which underwrote a series of WorldCom bond offerings between 2000 and 2001, was due to go on trial in the investor lawsuit. Besides, 14 investment banks have agreed to shell out about $6 billion to settle the case, which is a record for a securities fraud class action.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter