Posted on 12/16/2004 1:35:49 PM PST by frog_jerk_2004
U.S. blue chips rise; J&J higher, Goldman falls Thu Dec 16, 2004 12:42 PM ET (Updates to late morning)
By Anupama Chandrasekaran
NEW YORK, Dec 16 (Reuters) - U.S. blue chips moved higher on Thursday, getting a lift from Johnson & Johnson (JNJ.N: Quote, Profile, Research) following its acquisition of medical device maker Guidant Corp. (GDT.N: Quote, Profile, Research) , but broader market gains were capped after investment bank Goldman Sachs posted disappointing quarterly revenues.
Deutsche Bank also upgraded Johnson & Johnson to "buy" from "hold." The health-care products company sealed its $25.4 billion deal to buy Guidant late on Wednesday.
Johnson & Johnson was up 2 percent to $62.17, supporting the Dow. Guidant fell 18 cents to $71.92.
Goldman Sachs Group Inc. (GS.N: Quote, Profile, Research) fell 3 percent to $105.99, weighing on the Standard & Poor's index, after the investment bank said fourth-quarter profit rose but revenue was lower than expected, according to Reuters data.
The Dow Jones industrial average was up 30.86 points, or 0.29 percent, at 10,722.34. The Standard & Poor's 500 Index was up 1.12 points, or 0.09 percent, at 1,206.84. The technology-laced Nasdaq Composite Index was down 0.20 of a point, or 0.01 percent, at 2,162.35.
"The market is consolidating the gains we have seen as we came into yesterday's market," said Paul Cherney, chief market analyst at Standard & Poor's. "Since October the markets have tended to go up for three or four days and then they consolidate for three or four days."
U.S. stocks, which are up so far this week, have risen four of the last six weeks following George W. Bush's re-election as president. Increased merger activity has also fueled markets.
"The market does seem to be happy about the J&J deal but that doesn't seem to be the case with Symantec and this might be a subtle clue from the market that money will feel more comfortable going into blue chips next year rather than the tech stocks which powered the first year of the bull market," Cherney said.
Security software maker Symantec Corp. (SYMC.O: Quote, Profile, Research) on Thursday said it would buy Veritas Software Corp. (VRTS.O: Quote, Profile, Research) for $13.5 billion, expanding into the backup and recovery software market. Symantec dropped 8 percent to $25.17, while Veritas fell 1 percent to $27.80.
Fannie Mae dropped 2.2 percent to $69.14 a day after the U.S. Securities and Exchange Commission said the mortgage finance company misapplied accounting principles and called on it to restate earnings.
Traders also said they expect volatility ahead of Friday's quadruple witching -- a term used by pros to describe the quarterly expiration of four different types of options and futures.
In more economic news, the Philadelphia Fed's business activity index jumped to 29.6 in December from 20.7 in November, far surpassing forecasts of around 20.5.
Earlier, data showed the U.S. current account deficit widened slightly in the third quarter. Also, the number of Americans filing initial claims for unemployment pay fell by much more than expected last week, while housing starts unexpectedly plummeted last month.
© Reuters 2004. All Rights Reserved.
U.S. stocks, which are up so far this week, have risen four of the last six weeks following George W. Bush's re-election as president.
INVESTORS ON BUSH VICTORY: (sung to the alka-seltzer jingle) "Oh, what a relief it is!"
But but but the market was only poised to rise if ketchup boy was elected.
In other news: The flu shot shortage, the DIMS tried in earnest to make an issue and pin on BUSH in the campaign, is now moot because of recent news that this will be a light flu season and we may even have an oversupply of vaccines that will be wasted.
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