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CNBC ON DIGG

Stock Pop From Philly Fed Starts to Fade

Published: Thursday, 17 Sep 2009 | 11:43 AM ET

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By: CNBC.com

Stocks got a quick pop Thursday from the Philadelphia Federal Reserve report on regional manufacturing but the gains began to fade as weakness nagged at the market.

United Technologies, Bank of America and General Electric were the biggest percentage gainers on the Dow.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

The Philadelphia Fed said its manufacturing gauge rose to 14.1 in September from 4.2 in August, registering its first back-to-back monthly gain since October and November of last year.

FedEx [FDX Loading... ()] shares skidded after the economic bellwether reported earnings in line with estimates but said revenue fell 27 percent and fuel costs took a toll on earnings. The package-delivery giant also said it will raise rates by about 6 percent.

In the day's economic news, initial jobless claims unexpectedly fell last week, dropping by 5,000, but the number of people remaining on benefit payrolls continued to rise.

Meanwhile, housing starts and permits rose in August to their highest level since November amid an increase in multifamily homes.

Homebuilders rallied after the housing report, withy Hovnanian [HOV Loading... ()] up about 15 percent and Beazer [BZH Loading... ()] up around 10 percent.

FOR INVESTORS

General Electric [GE Loading... ()] is having its analyst meeting today. Shares finished at $17 Wednesday as buying momentum on the stock has picked up since it broke through $15.

Kodak [EK Loading... ()] said it plans to raise $700 million, including a commitment from private-equity firm Kohlberg Kravis Roberts, to boost its balance sheet and free up cash for investments.

Oracle [ORCL Loading... ()] hit its earnings target in a report after the bell Wednesday but sales fell short of expectations as businesses remain a little gunshy on tech spending.

Citigroup [C Loading... ()] shares rallied once again. The stock bounced back Wednesday after a sharp selloff in the previous session following news that the government may withdraw some of its 34-percent stake in the firm and that Citi might launch a $5 billion secondary offering.

US Bancorp [USB Loading... ()] got a boost after Rochdale analyst Dick Bove raised his rating on the stock to "buy" from "neutral," saying the bank could gain market share from struggling competitors.

"Competitors are weakening as they deal with loan problems. This is creating a vacuum in the market allowing banks with bold programs to grab market share," Bove wrote in a note to clients.

Immunogen [IMGN Loading... () ] said it licensed its technology to develop anticancer drugs to Amgen [AMGN Loading... () ]. Immunogen will get a $1 million payment up front and milestone payments of up to $34 million on future royalties. Immunogen shares jumped 10.6 percent in premarket trading.

Nasdaq futures overall were slightly below fair market value.

Elsewhere, Synovus [SNV Loading... () ], a Columbus, Ga.-based bank holding company, priced a public stock offering at $4 a share and expects proceeds of $600 million, nearly double an estimate from earlier this week. But the loss of premium from Wednesday's closing sent shares down 6.8 percent premarket.

Meanwhile, the probe into the financial crisis begins in earnest Thursday as a fact-finding panel will hold its first meeting. The Obama administration will be closely watching the panel’s findings in the hope of gaining ammunition to use for its push to tougher regulation.

And the first sale of toxic assets to a private entity took place, in a test of the government’s program to clean up bank balance sheets by selling troubled loans. Texas-based mortgage servicer Residential Credit Solutions is the first buyer of a stake in a portfolio of residential mortgage loans from Franklin Bank, a Texas bank that failed last year, according to the Federal Deposit Insurance Corp.