By Agency reporter

Tuesday, 25 Jan 2011

United States stocks rose, as acquisitions and share-buyback plans overshadowed concern about Europe after the collapse of the Irish coalition government threw budget plans into disarray.

Bloomberg News reported on Monday, that Smurfit-Stone Container Corporation jumped by 29 per cent after Rock-Tenn Company agreed to buy the maker of material for cardboard boxes for $3.5bn.

Sara Lee Corporation gained 1.1 per cent as three people familiar with the matter said the food company received a takeover bid. Intel Corporation gained 1.2 per cent after adding $10bn to its stock-buyback plan.

About four stocks climbed for every three that fell on US exchanges. The S&P 500 slipped less than 0.1 per cent to 1,283.08 in New York. The Dow Jones Industrial Average rose by 28.11 points, or 0.2 per cent, to 11,899.95.

“It’s a tug-of-war,” said Mr. Peter Jankovskis, who manages more than $2.6bn at Oakbrook Investments in Lisle, Illinois.

“The market may look fairly valued after such a sharp run, however, corporate actions, such as buybacks and M&A, make valuations attractive. Earnings have been strong. Of course, every now and then, all that gets tempered when concerns about Europe start circulating again.”

The S&P 500 had its first weekly drop since November last week after Goldman Sachs Group Incorporated failed to beat analysts’ earnings estimates and housing slid more than forecast. The benchmark gauge for American equities rose, as much as 91 per cent since March 2009 on government stimulus measures and as companies reported higher-than-estimated profits.

More than 74 per cent of S&P 500 companies that have released results since January 10 have beaten analysts’ earnings-per-share estimates, according to the data compiled by Bloomberg.

Income grew 25 per cent in the fourth quarter and will increase 15 per cent in 2011, according to analyst projections. Sales grew 8.7 per cent for the group that has reported so far, with energy, technology and raw-materials companies showing the biggest changes, Bloomberg data showed.

A total of 128 companies in the S&P 500 are scheduled to report fourth-quarter figures this week, more than double the amount of results released so far, according to the data compiled by Bloomberg.

 

Source: Punch