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8B Daily News – Tuesday, July 9, 2013 Stocks rise as earnings kick off; chipmakers fall NEW YORK (AP) — Cautious optimism about corporate earnings sent the stock market higher Monday. U.S. companies start reporting their secondquarter results this week, led by aluminum producer Alcoa. Other major companies that will report include JPMorgan and Wells Fargo. Analysts predict that earnings growth for companies in the Standard & Poor's 500 index will come in at 3 percent in the second quarter. While that rate would be down from 5 percent in the first quarter, earnings are still expected to reach record levels. Investors and traders will search for evidence that companies are increasing revenues, not just cutting costs to boost profits. Sales growth is predicted to fall 0.3 percent in the second quarter. ''We'll be looking to see where revenue comes in,'' said Jim Dunigan, an executive vice president of investments at PNC. The Dow rose 88.85 points, or 0.6 percent, to close at 15,224.69. The Standard & Poor's 500 index gained 8.57 points, or 0.5 percent, to end at 1,640.46. Dell was among the big gainers in the S&P 500 index. An advisory firm recommended that company shareholders support a plan to take the computer company private. Founder Michael Wall Street Dell and Silver Lake Partners have offered to buy Dell for $24.4 billion, or $13.65 a share. Dell rose 41 cents, or 3.1 percent, to $13.44. The Russell 2000 index, an index of smallcompany stocks, closed at an all-time high 1,009.25. The index past the 1,000 mark for the first time Friday and has gained 19 percent this year, a sign that investors are more willing to take on risk. The gains have outpaced those of the Dow and S&P 500, which are up 16 percent and 15 percent, respectively. In other trading, the Nasdaq composite rose 5.45, or 0.2 percent, to 3,484.83, the smallest gain of the major indexes. The index was weighed down by a slump in Intel. The chipmaker fell after a Citigroup analyst wrote that weak PC sales and waning demand for smartphones would stunt the company's growth. Intel, which makes up 2.2 percent of the Nasdaq, fell 88 cents, or 3.6 percent, to $23.18. Other chipmakers also declined. Qualcomm dropped 96 cents, or 1.6 percent, to $59.99. In government bond trading, the yield on the 10-year government note pulled back from a twoyear high of 2.74 Friday. It fell to 2.64 percent on Monday. The yield had jumped after the government reported strong U.S. hiring for June on Friday. Investors believe that the improving jobs market will prompt the Federal Reserve to ease back on its bond-buying program. The Fed is buying $85 billion in bonds each month to keep interest rates low and spur borrowing and investing. For the first five months of the year stocks moved higher, supported by the backdrop of low interest rates, a recovering housing market and increased hiring. The S&P 500 index gained 17 percent by May 21 and stood at a record 1,669. But the stock market pulled back when Fed chairman Ben Bernanke said that the central bank might consider easing its stimulus. The S&P 500 dropped as low as 1,573 on June 24, about 5.7 percent below its record close. Since then stocks have gradually recouped losses as investors appear to be getting more comfortable with higher interest rates. The S&P 500 is now 2.2 percent below its May record. ''Interest rates, even though they've risen, are still incredibly low,'' said Brent Schutte, a market strategist at BMO Private Bank. ''Right now, increases in rates are a good thing because it means the economy is doing a little bit better.'' The rising rates are still making bond investors nervous though. Investors pulled a net $900 million from U.S. stock funds for the week ending June 26, but they withdrew $28.1 billion from bond funds over the same period, according to data from the Investment Company Institute. That sell-off may boost stocks as investors look to reinvest their proceeds from bonds. In commodities trading, the price of oil was little changed at $103.14 a barrel. The price of gold rose $22.20, or 1.8 percent, to $1,234.90 an ounce. After the market closed Monday, Alcoa reported a wider secondquarter loss due to weak aluminum prices. Alcoa lost $119 million, or 11 cents per share, in the Aprilthrough-June quarter. That compared with a loss of $2 million, or break-even on a per-share basis, a year earlier. Alcoa fell 5 cents, or 0.6 percent, to $7.87 in after-hours trading. Among other stocks making big moves: Priceline rose $33.47, or 3.9 percent, to $888.60 after investment bank Morgan Stanley raised its price target for the online bookings company. Analysts at the bank believe that Priceline can climb as high as $1,010 as it continues to grow internationally and worries about shrinking profits dissipate. Fiat exercises option to buy more Chrysler stock DETROIT (AP) — Italian automaker Fiat has exercised a third option to buy a small amount of Chrysler stock, but the sale won't go through until a U.S. court settles a dispute over the price. Fiat said Monday that it offered $254.7 million for another 3.3 percent of Chrysler's outstanding equity. Fiat already owns 58.5 percent of Chrysler, with the remaining 41.5 percent held by a trust that pays medical bills for retired United Auto Workers union members. The Italian Law Office of CHERYL A. FORBES company wants to buy all of the trust's stock and fully merge Chrysler and Fiat. The price on the options will be settled by a judge in Delaware Chancery Court, and the ruling is likely to set the price for the trust's remaining Chrysler stake. For several months, Fiat has been trying to arrange financing to buy the trust's stock. Fiat expects a court ruling sometime this Hoyt-Cole Estate Planning, Wills and Trusts Probate and Trust Administration 349 Pine Street P.O. Box 1009 month. ''I hope to close (the deal) as soon as possible if they let me do it,'' the Italian news agency LaPresse quoted Fiat and Chrysler CEO Sergio Marchionne as saying at an appearance Monday in Turin, Italy, Fiat's headquarters city. Fiat now has exercised options to buy 9.9 percent more Chrysler stock. The Italian automaker has Chapel of the Flowers Funerals • Cremations • Prearrangements Red Bluff, California, 96080 TEL (530) 527-7500 FAX (530) 527-6500 816 Walnut St., Red Bluff, CA (530) 527-1174 Cheryl@AttorneyCherylForbes.com Estate Planning For Future Generations FD652 www.chapeloftheflowers.net options to buy 3.3 percent of Chrysler stock every six months until it gets another 16.6 percent. Fiat offered $139.7 million for the first 3.3 percent option on July 3, 2012, but the trust fund says the price should be $343 million. Fiat raised its offer to $198 million for the second 3.3 percent on Jan. 3 of this year. Morgan Stanley, in a July 5 note to investors, estimated that it would cost Fiat $2 billion to $5 billion to buy the trust's entire stake. The options are part of the deal in which Fiat and Marchionne were appointed to manage Chrysler in 2009 by the U.S. government. The government bailed out the struggling Chrysler and funded its trip through bankruptcy restructuring. MOULE'S TEHAMA COUNTY GLASS IT'S SCREEN SEASON Enjoy the Fresh air without Bugs New Window & Door Screen Re-screen your existing screens 515 Sycamore St., Red Bluff • 529-0260