U.S. Stocks Rise, Led by Energy Companies; European Shares Gain

(Bloomberg) -- U.S. stocks rose, led by energy and mining companies, after oil gained for the seventh time in eight days and copper climbed to a four-month high.

Exxon Mobil Corp., the biggest U.S. fuel company, and Freeport-McMoRan Copper & Gold Inc., the world's second-largest copper producer, advanced. Wal-Mart Stores Inc., the biggest retailer, increased after fourth-quarter profit topped analysts' estimates. Rallies in raw-materials producers lifted Asia's stock benchmark to a two-week high, while European shares rebounded from earlier losses as insurers rose.

The Standard & Poor's 500 Index added 14.13 points, or 1.1 percent, to 1,364.12 as of 9:41 a.m. in New York. The Dow Jones Industrial Average rose 121.63, or 1 percent, to 12,469.84. The Nasdaq Composite Index gained 22.46, or 1 percent, to 2,344.26. The U.S. market was closed yesterday for Presidents' Day.

``The general earnings picture is quite good,'' said Lincoln Anderson, the Boston-based chief investment officer of LPL Financial Services, which helps oversee about $271 billion. ``U.S. stocks are sort of on sale.''

Fourth-quarter profit for the S&P 500's 412 members that have reported results dropped by an average 19 percent, data compiled by Bloomberg show. Excluding financial companies, earnings climbed 18 percent. The S&P 500 trades at 13.9 times its members' estimated 2008 profit, based on analysts' projections compiled by Bloomberg. Index members last traded at a valuation of less than 14 times historic earnings in 1990.

Weekly Gain

The S&P 500 rose last week for the third time in a month after the biggest jump in oil since November lifted energy producers, and earnings from consumer companies exceeded analysts' estimates.

The MSCI Asia Pacific Index gained 1.6 percent today to a two-week high as Rio Tinto Group said it's seeking a bigger price increase for its iron ore from steelmakers than the 65 percent obtained by a rival.

Europe's Dow Jones Stoxx 600 Index rose 0.9 percent after earlier declining as much as 1.3 percent. A gauge of insurers added 2.1 percent for the biggest gain among 18 industry groups.

 

Read more at Bloomberg

Medco profit tops estimates

(Reuters) - Medco Health Solutions Inc (MHS.N: Quote, Profile, Research) reported better-than-expected quarterly earnings on Tuesday, helped by sales of generic drugs, and the pharmacy benefit manager boosted its full-year profit forecast, sending its shares higher.

Medco, which derives more than half its profit from home delivery of generic medicines by mail, said its rosier outlook reflected confidence in its fundamentals, new business, and more generics becoming available sooner than anticipated.

Pharmacy benefit managers (PBMs), which administer prescription drug benefits for employers and health plans and operate large mail-order pharmacies, have profited from the availability of low-cost generic versions of popular drugs.

Morgan Stanley analyst David Veal said in a research note, "Another quarter of solid growth, when coupled with higher guidance, affirm our positive view of the PBM industry and should offer relief for the high level of investor nervousness around the quarter."

After a huge gain in 2007, Medco shares were down 3 percent this year through Friday's close, compared with a 13 percent drop for rival Express Scripts Inc (ESRX.O: Quote, Profile, Research). Medco shares rose 4 percent to $51 in pre-market trading on Tuesday.

Fourth-quarter net income fell 9 percent to $207.6 million, or 38 cents per share, from $228.8 million, or 39 cents per share, a year earlier.

The latest results were hurt by higher-than-expected costs tied to new clients and expenses related to two acquisitions. The year-earlier earnings were boosted by the temporary availability of a generic version of a popular blood thinner.

 

Read more at Reuters