Closing Bell: Best quarter start in years, bad news gets less bad

Posted Apr 1st 2008 4:29PM by Jon Ogg
Filed under: Microsoft (MSFT), General Motors (GM), Altria Group (MO)

Today's headlines could have read, "Rally on Financial Write-Downs, Go Figure!" Last night we saw a $3 billion preferred offering out of Lehman Brothers Holdings, Inc. (NYSE: LEH) that became a $4 billion offering. Shares were down on the news but after the dust settled the market decided this was a net-net good and shares rose almost 18% to $44.34. Even UBS AG (NYSE: UBS) rallied a sharp 14% to $33.01after it said it was going to take a $19 Billion additional writedown charge and its chairman left the company. Go figure.

The Institute for Supply Management said its index of national manufacturing activity rose to a reading of 48.6 in March, which is still a contraction but not as bad as estimates of about 47.5 from economists. There may be hope that the de-leveraging being seen by financial firms and tightened trading standards may be taking some steam out of the greatly inflated commodities. Crude oil fell $0.74 to $100.84/barrel, but briefly each barrel traded back under the $100 mark. Even gold dropped back below $900.00/ounce level after having seen north of $1,000.00 just last month. Below are the unofficial closing averages for US market index readings:

DJIA 12,654.36 (+391.47; +3.19%)
S&P 500 1,370.16 (+47.46; +3.59%)
NASDAQ 2,362.75 (+83.65; +3.67%)
10YR-TBond 3.545% (+0.113)
52-week lows, there are always some

After the quarter has now ended, we noticed how many tech firms actually performed worse than major financials.

Despite horrible industry auto sales from everyone today, General Motors (NYSE: GM) saw shares rise a sharp 5.7% to $20.15 as GM is still keeping its production targets as is despite 19% down in units.

Yahoo! Inc. (NASDAQ: YHOO) saw shares fall 1.5% to $28.50 after Microsoft Corporation (NASDAQ: MSFT) said that it will not be hiking its bid for the search laggard.

Cell Genesys (NASDAQ: CEGE) was the biotech winner after Takeda in Japan signed what may end up being a $320 million total package for its prostate cancer drug. Shares rose 31% to $3.09.

Travel Centers of America (AMEX: TA) was the "daily fugly" after along with an earnings report it filed noting lease activities that put the financial statements as "no longer should be relied upon" status. Shares didn't just do the walk of shame with another 52-week low. Shares are down more than 90% from its yearly highs and this has only been public just over a year. This closed down over 40% at $3.46.

Altria Group, Inc. (NYSE: MO) is now on a post-split basis but a downgrade this morning punished shares with a drop of -0.15% at $22.17. See full top 10 pre-market analyst calls.

Tags: CEGE, GM, LEH, MO, MSFT, TA, UBS, YHOO