News Column

Daily Wrap: Dow hit new record; Goldman sees happy days ahead

July 14, 2014

By Jim Gallagher, St. Louis Post-Dispatch

July 14--TODAY'S INDEXES -- Dow Industrials 17055 +112

S&P 500 1976 +9

Nasdaq 4440 +25

SMILES ON THE STREET: The Dow Jones industrial average hit yet another record today, jumping 112 points to 17,055.

Traders cheered even nasty news. Citigroup shares rose 3 percent despite news that it will pay $7 billion to the government to settle complaints over its mortgage behavior before the financial crisis. That took away 96 percent of its second-quarter earnings. But investors preferred to look at the bright side; its earnings beat analysts expectations, excluding the government's take.

There were smiles all around as the S&P 500 gained 0.66 percent today, regaining most of last week's 0.9 percent loss. Goldman Sachs raised its forecast for the S&P today, saying it should hit 2,050 by year end, up from its 1,900 previous target. The investment firm sees rising earnings and faster economic growth ahead.

The Nasdaq gained 0.56 percent today. The Euro Stoxx rose 0.9 percent.

ANALYST INSIGHT: Zacks, the investment firm, is saying nice things about Ameren stock. "Ameren Corporation has been witnessing rising earnings estimates on the back of strong earnings performance," says Zacks. "Ameren's focus on regulated operations is expected to provide stability to its revenue stream. Moreover, the company disburses regular dividends with a long term plan to increase the payout to a band of 55 percent to 70 percent. This will keep investors interested."

The payout ratio is the percent of earnings paid out in dividends. Ameren recently sold off plants designated to sell power into the unregulated merchant power market.

LOCAL GAINER: Mallinckrodt shares rose 2.7 percent as the firm announced a date to seal the deal on its $5.6 billion purchase of Questcor. Shareholders will meet to authorize the deal on Aug. 14.

An Irish company with big operations in Hazelwood, Mallinckrodt makes a range of specialty pharmaceuticals. Questcor is based in California and its primary product is H.P. Acthar Gel, which is used in the management of autoimmune and inflammatory conditions.

LOCAL INDEX: The Bloomberg St. Louis Index closed up 3 at 907.


FutureFuel 3.85% Relive International -3.48

Viasystem 3.74% SunEdison Semico -2.75

Mallinckrodt 2.7% Isle of Capri -2.42

THE DAY AHEAD: There should be good news for retailers. Economists expect a 0.6 percent increase in retail sales for the month of June, up from 0.3 percent for May, when results are reported Tuesday. Excluding volatile auto and gasoline sales, the total should still be up 0.5 percent for June.

Jim Gallagher is a reporter for the Post-Dispatch


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Source: St. Louis Post-Dispatch (MO)

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