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Wall Street rally continues as all sectors post gains

By Hannah Kuchler in New York
Published: July 26 2010 15:26 | Last updated: July 26 2010 23:20

US stocks were lifted on Monday by better housing data than expected and a forecast earnings rise by FedEx, the delivery
company seen as a barometer for global trade.

The S&P 500 closed up 1.1 per cent at 1,115.00, the Dow Jones Industrial Average gained 1 per cent to close at 10,525.43
and the Nasdaq was 1.2 per cent higher to close at 2,296.43.

All 10 main sectors of the S&P 500 were up, continuing Friday’s rally.

Data for June showed the number of new homes bought were up 24 per cent on May to an annualised figure of 330,000.
Analysts had forecast a total of 320,000 units. Home sales had been falling since a tax credit expired this year.

The S&P 500 homebuilders index rose 3.7 per cent, with DR Horton up 3 per cent to $11.17, PulteGroup higher by 4.7 per
cent to $9.07 and Lennar rising 3.3 per cent to $15.42.

AIG, the bailed-out insurer which has units that initiate, insure and invest in home loans, advanced 6.9 per cent to $39.30.

FedEx boosted investor confidence by raising its profit forecast. It pushed up its earnings per share guidance for this
quarter to a range of $1.05–$1.25 from $0.85–$1.05. The news came after UPS reported better second-quarter earnings than
expected last week. FedEx shares rose 5.6 per cent to $83.39.

Ralph Fogel, investment strategist at Fogel Neale Partners, said “It’s interesting to note that with recent moves in the
market, both up and down, it is transportation that has led the move.”

US-listed shares in BP rose 4.9 per cent to $38.65 after it was reported that the oil company was set to announce the
departure of Tony Hayward, chief executive, in the next 24 hours. American Bob Dudley was touted as Mr Hayward’s
successor.

Shares in Anadarko Petroleum, which owns 25 per cent of the ruptured oil well in the Gulf of Mexico, rose 3.6 per cent to
$50.53.

Genzyme biotech company rose 7.7 per cent to $67.38 in early trading following reports that Sanofi-Aventis was more likely
to buy the company than GlaxoSmithKline. US-listed shares in Sanofi-Aventis rose 1.6 per cent to $29.82 and
GlaxoSmithKline’s US-listed shares lost 0.7 per cent to $36.74. The S&P 500 healthcare index was up 1.4 per cent.

On Friday, speculation that French pharmaceutical company Sanofi-Aventis might have approached Genzyme about a
possible merger boosted its share price by 15.4 per cent.

Biogen Idec, the biotech group, advanced on speculation that it was a potential takeover target, rising 8.3 per cent to
$57.89.

Shares in oil and gas producer Delta Petroleum surged 9.3 per cent to 87 cents after the company agreed to sell several
non-core assets to Wapiti Oil & Gas for $130m.

Other deals included Core-Mark Holding, a distributor of packaged goods to convenience stores, which was up 5.6 per cent
after it agreed to buy Finkle Distributors for about $43m.

After the bumper earnings releases of last week, there was a pause in the earnings season on Monday with fewer
companies releasing before the bell.

Among those that did, FMC Technologies, the provider of technology for oil and gasfields, reported earnings of 78 cents,
above forecasts of 71 cents. But the company’s revenue was worse than expected and it did not raise guidance for the full
year in spite of a strong order book. Shares were up 2.3 per cent to $61.77.

Lorillard cigarette manufacturer also rose after delivering better earnings than expected. Shares were up 1.3 per cent to
$77.25 after the owner of the Newport menthol cigarette brand said net income was $263m, or $1.73 a share, for the second
quarter, compared with analysts’ predictions of $1.61 a share.

Both Office Depot and telecoms company Sprint Nextel rose ahead of results they are due to report this week. Office Depot,
which reports today, was up 7.7 per cent to $4.73 and Sprint Nextel, which reports tomorrow, rose 7.7 per cent to $5.05.

Onyx Pharmaceuticals put on 21.2 per cent to $26.04 after it reported positive results from a study testing its experimental
drug carfilzomib.

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