Foot Locker Bids $1.2 B for Genesco

Market Update Analysis:

Author: Elena Todorova
123jump.com
Last Update: 12:06 PM EDT April 20 2007

U.S. markets continued to post gains, benefiting from stronger-than-expected earnings from Dow members like Caterpillar, Honeywell, American Express which boosted the index toward its first assault on the 13,000 mark. The Nasdaq and S&P''s 500 were both at six-year highs. In deal news, the largest U.S. shoes retailer Foot Locker made an unsolicited $1.2 billion bid for Genesco to gain footwear chains including Journeys and Johnston & Murphy.

11:30AM U.S. market averages traded record high.[/R
U.S. markets continued to post gains, benefiting from stronger-than-expected earnings from Dow members like Caterpillar (CAT: chart), Honeywell (HON: chart), American Express (AXP: chart) which boosted the index toward its first assault on the 13,000 mark. The Nasdaq and S&P's 500 were both at six-year highs. In deal news, the largest U.S. shoes retailer Foot Locker (FL: chart) rose 3.7% after it made an unsolicited $1.2 billion bid for Genesco to gain footwear chains including Journeys and Johnston & Murphy. Foot Locker offered $46 a share said it is likely to raise the bid.

Strong gains by some housing, telecommunications, and health insurance stocks also helped push the major averages in positive territory. Internet, financials and transportation stocks also contributed to the gains. Gold stocks showed considerable strength, benefiting from a notable increase by the price of gold. At the same time, the airline sector posted weakness, due to a $1 increase by the price of oil. Semiconductor stocks also mived to the downside. In midday trading, the Dow Jones industrial average was up 111.42, or 0.87%, at 12,920.05 after setting a new intraday high of 12,950.44. The Standard & Poor's 500 index was up 11.39, or 0.77%, at 1,482.12, and the Nasdaq composite index rose 18.31, or 0.73%, to 2,523.66.

9:45AM U.S. markets rallied on strong earnings from blue-chip stocks. U.S.
U.S. stock averages posted solid gains at opening Friday, with the Dow Jones hitting another record high, boosted by a sharp rebound in Asian markets, upbeat earnings at Caterpillar and Google, as well as an H&R Block deal to sell its mortgage lending unit. The Dow was sent 130 points higher by 26 of its 30 stocks. Among the most notable gainers, Caterpillar (CAT: chart) rose 5% after the company said its Q1 net income fell below the year-earlier level, but exceeded estimates. Honeywell International (HON: chart) also supported the index, rising 3.3% on stronger-than-expected earnings results.

However, Dow members Pfizer and McDonald''s posted losses. Pfizer Inc. (PFE: chart) dropped 1.4% after reporting 18% drop in its Q1 profit, reflecting restructuring costs. In other corporate news, H&R Block Inc. (HRB: chart) jumped 6% after the company agreed to sell its Option One Mortgage business to OOMC Acquisition Corp, a newly formed company affiliated with Cerberus Capital Management. H&R Block said it expects to report a 2007 loss. Clear Channel Communications (CCU: chart) edged up after it agreed to sell its television station group to Providence Equity Partners for $1.2 billion. In the opening minutes, the Dow is up 134.90 to 12,943.53, the Nasdaq Composite has gained 25.28 to 2,530.63, and the Standard & Poor''s 500 index is up 12.77 at 1,483.50.

9:30AM The FTSE advance Friday on merger activity involving Alliance Boots.
The UK benchmark index was higher by mid-day Friday. The FTSE 100 was up 45.8 points to 6,486.0.

Advancers

Alliance Boots rallied 8% as takeover speculation hit new heights. After Boots this morning accepted a 10.4 billion pound offer from private equity group Kohlberg Kravis Roberts and billionaire Stefano Pessina, Boots executive deputy chairman and largest shareholder, a rival consortium led by Terra Firma immediately issued an indicative proposal worth 10.8 billion pounds.

Barclays gained 2.4% as takeover speculation in the banking sector continued. Société Générale shares hit a record high in France on talk of bid interest from Italian UniCredit.

Vodafone rose 2% on talk that it was close to selling its 45% stake in US mobile company Verizon Wireless. Taylor Woodrow was another good performer on a report that Persimmon is about to muscle into TayWood merger plan with Wimpey.

Decliners

WPP Group lost 1.4% as the advertising group reported first-quarter revenues that were below forecasts. WPP announced that although the US had experienced a slowdown in the last few months, this had been largely counter-balanced by improvements in western Europe.

Dialight fell 18% after the traffic light sensor technology specialist warned sales are sluggish and profits will be 1.3 million pounds below forecasts.

9:15AM Asian markets advance Friday with Japan and China in the lead.
Asian markets ended higher on Friday. The 225-issue Nikkei Average ended 0.5% higher, up 80.65 points, to 17,452.62. Toyota Motor advanced 1.2% after reports that the vehicle maker will probably post record group operating profit of $18.96 billion for the fiscal year ended March 31, 20% higher from a year earlier.

Among other exporters, Canon added 0.8%. on news that the company is likely to post record net profit for the year ended Dec. 31, up 14% from the company earlier forecast and also Advantest added 2%.

Shanghai Composite Index surged 3.9% to close at 3,584.20. The Chinese benchmark lost 4.5% yesterday, as investors squared off positions in anticipation that economic data due out after market hours would point to an unhealthy acceleration in the economy, potentially triggering additional measures to cool growth.

Hong Kong Hang Seng Index finished up 1.3% to 20,566.59. China Mobile, the mainland largest wireless operator, gained 2.3%.Australian S&P/ASX 200 closed up 0.7% at 6,207.5 and South Korean Kospi index finished up 1.3% to 1,533.08. The biggest company in the country, Samsung Electronics, rose 0.7%.