Market Wrap for November 13^th 2009

Stocks rallied on Friday as earnings reports boosted confidence about the economic recovery.  Reports from The Walt Disney Co. (DIS) as well as retailers Abercrombie & Fitch Co. (ANF) and J.C. Penney Co. (JCP) offset worries about a disappointing consumer confidence report.

Disney (DIS) said late Thursday that improved revenue at its cable, broadcast and movie studio units helped produce an 18 percent increase in its fiscal fourth-quarter profit.  While Abercrombie's (ANF) results were better than expected, while J.C. Penney raised its profit and sales forecasts.

The gains Friday came on the heels of an early morning sell-off after the preliminary Reuters/University of Michigan consumer sentiment index for November came in at 66.0, down from 70.6 in October.   However by midday trading, the Dow Jones Industrial average rose 77.08, or 0.8 percent, to 10,274.55, while the broader Standard & Poor's 500 index rose 6.17, or 0.6 percent, to 1,093.41.  On the technology front the NASDAQ Composite Index rose 11.60, or 0.5 percent, to 2,160.62.

Market breadth was solid with two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 373.3 million shares compared with 394.7 million shares traded at the same point Thursday.

The Russell 2000 index of smaller companies rose 1.83, or 0.3 percent, to 582.15.

FBI: New alleged investment scheme could top $1B

Scott Rothstein is suspected of misappropriating millions through a legal settlement investment scam.

According to the Associated Press Investigators say the alleged fraud scheme run by a prominent South Florida lawyer is likely to exceed $1 billion and involve thousands of investors.  Miami FBI chief John Gilles said Thursday morning that investigators want investors with attorney Scott Rothstein to come forward. Rothstein is suspected of misappropriating millions through a legal settlement investment scam. No criminal charges have been filed yet, but in a civil complaint, prosecutors accused Rothstein of concocting a Ponzi scheme that lured millions from investors. Gilles said the investigation is likely to take weeks or longer.

Biggest Gainers

3Com (COMS) surges on takeover.  3Com (COMS) surged 31 percent to $ 7.46 after the Hewlett-Packard (HPQ) offered to buy 3Com for $ 2.7 billion.

Advanced Micro Devices Inc. (AMD) jumped the most in the Standard & Poor’s 500 Index, rising 22 percent to $6.48. The world’s second-biggest computer-chip maker will get $1.25 billion from Intel Corp. (INTC US) under an agreement to end all outstanding legal disputes between the companies, including antitrust litigation and patent cross license disputes.

China Automotive Systems Inc. (CAAS) climbed 11 percent to $16.25, the highest price since January 2004. The maker of steering components for cars posted third-quarter earnings excluding some items of 22 cents a share, beating the average analyst estimate by 44 percent.

Dow Chemical Co. (DOW) climbed 7.1 percent to $28.60 after it said cost cuts and rising sales after the acquisition of Rohm & Haas Co. will boost earnings more than analysts estimate.

Playboy Enterprises Inc. (PLA) jumped 42 percent to $4.07, the biggest gain in the Russell 2000. The men’s magazine publisher is in talks to sell itself to Iconix Brand Group Inc. (ICON), according to two people close to the situation. Iconix lost 3.8 percent to $11.69.

Biggest Decliners

Aegon NV (AEG US) lost 7.6 percent to $ 7.51 its biggest decline since Oct. 30. The Dutch owner of U.S. insurer Transamerica Corp. reported a decline in third-quarter underlying pretax earnings, which exclude investment swings.

Brocade Communications Systems Inc. (BRCD) dropped 13 percent to $8.08 after ratings downgrades at Piper Jaffray Cos., ThinkEquity LLC and Lazard Capital Markets Ltd. The analysts cited the loss of a potential partnership with Hewlett-Packard (HPQ), which some investors had speculated would buy Brocade.

Green Mountain Coffee Roasters Inc. (GMCR) fell 10 percent, the most since October 2008, to $68.35. The Waterbury, Vermont-based roaster said it will probably earn 15 cents a share at most in the first quarter.

Northwest Pipe Co. (NWPX) dropped 14 percent, the most since Dec. 1, to $26.74. The steel-pipe maker delayed filing its quarterly report, citing an internal investigation of its accounting for revenue. Boening & Scattergood cut the stock to “neutral” from “outperform.”