Market Focus with Tom Hudson – Monday, Mar 12, 2012

SUSIE GHARIB: And how stressed would your bank be if the U.S. were hit
with another major recession? We’ll find out later this week, as we
mentioned earlier with Stu, when the Federal Reserve issues the results of
its latest bank stress test. Late today, we got some details about what those stress tests will
look like. The nation’s 19 largest banks were tested for what’s called a
severe recession scenario. That’s unemployment at 13 percent, a 50 percent
plunge in stock prices and a 21 percent drop in home prices. The results
are expected after the market closes on Thursday.

Well, concerns about those stress test results weighed on the market
today. But the Dow still closed higher, extending the recent mini-rally to
four days. Let’s take a look in tonight’s “Market Focus”.

Investors were seeking safety today. They were primarily
interested in defensive plays, with utilities, consumer staples and telecom
on many shopping lists.

The utilities sector was the strongest group in the S&P 500, up over
1 percent. Constellation Energy and Exelon were the standouts, after
Constellation agreed to pay $235 million to settle a probe of its wholesale
power trading. The payment clears the way for its merger with Exelon.
Both stocks gained more than 2 percent today.

In the consumer staples area, we saw pockets of strength throughout
the sector. Looking at this chart here, you see that Hershey’s was among
the sweetest, rising nearly 2 percent. PepsiCo and cosmetics queen Estee
Lauder rose each more than 1 percent as well.

Exxon Mobil was the top performing stock in the Dow today. The oil
giant and a major Turkish energy company reportedly are in talks to explore
for shale gas in Turkey, an area rich in recoverable shale gas. Exxon
shares rose 1.5 percent.

Meanwhile, financial stocks bucked the market’s up trend today, amid
worries about the Fed’s latest evaluation of the banking sector. Still,
some analysts are urging clients to be on the look out for dividend
increases from those banks that pass the tests.

JPMorgan Chase, Wells Fargo and Citigroup are considered among the
strongest, capable of weathering another economic crisis. But shares still
ended mixed.

Turning to a couple of foreign buyouts: shares in ZOLL Medical spiked
almost 24 percent. This is on word that it’s being acquired by Japan’s
Asahi for $2.2 billion. ZOLL will run as a separate unit, expanding
Asahi’s U.S. healthcare operations as it seeks to diversify its businesses.

China’s largest online video company Youku said today it’s buying
China’s number two online video firm Tudou Holdings for over $1 billion in
stock. Both companies had been locked in a bitter dispute over copyrights,
which recently they settled. The merger will mean cost-cutting and allow
the parties to concentrate on their video platforms.

Together, Youku and Tudou make up over a third of China’s online
video market. Shares exploded to the upside at Tudou. Youku’s shares also
got a nice boost, rising almost 24 percent.

And wrapping here, Yahoo is suing Facebook over 10 patents, including
advertising methods and systems on the web. The lawsuit filed in San Jose,
California, today is the first major legal battle between technology giants
in social media. Shares of Yahoo closed at $14.49, down 1 percent.

And that’s tonight’s “Market Focus”.

Similar Posts:

, , ,