U.S. stocks rise as China eases restrictions on bank investing

Citigroup Climbs

Citigroup climbed 4.4 percent to $35.79. The plan will eliminate about 1,900 jobs in the institutional clients group, New York-based Citigroup said. It’s intended to “improve overall productivity in our markets business, especially in areas experiencing continued low profitability, such as cash equities,” the company said.

Travelers Cos. climbed 2.9 percent to $72.59. The insurer said superstorm Sandy will cost the company about $650 million after tax and reinsurance and it plans to resume share buybacks.

Cobalt International Energy Inc. jumped 12 percent to $26.71 after the company announced a “significant” oil discovery in the Gulf of Mexico.

Technology shares fell 1 percent among 10 groups in the S&P 500. Apple sank 3.3 percent to $556.72.

Facebook Inc.

Facebook Inc. dropped 0.1 percent to $27.43. The largest social-networking company will join the Nasdaq-100 Index next week. Facebook will replace Infosys Ltd. before the start of trading on Dec. 12, Nasdaq OMX Group Inc. said, about seven months after the company’s $16 billion IPO.

The waiting period for entry into the index was a negotiating point with Facebook as it considered listing on Nasdaq or the New York Stock Exchange, a person with knowledge of the matter said in April.

Nvidia Corp. slid 1.2 percent to $11.95. The maker of graphics processors was downgraded to market perform from outperform at Oppenheimer & Co. by equity analyst Richard Schafer.

Costco Options

Options to protect against losses in Costco Wholesale Corp. have slipped to the cheapest level in two years as traders bet shares of the largest U.S. warehouse club will extend gains from an all-time high amid rising profits.

Puts that pay should the shares fall 10 percent cost 5.35 points more than calls betting on a 10 percent rally, down from 8.94 in August 2011, according to three-month data compiled by Bloomberg. The price relationship known as skew reached the lowest since November 2010 last week. The stock has rallied 25 percent this year and closed at a record $104.59 on Dec. 3.

Chief Executive Officer Craig Jelinek has been keeping prices low to increase store visits amid an unemployment rate that’s stuck around 8 percent three years into the economic recovery. Costco, whose profit has climbed an average 16 percent in the past three fiscal years, last month announced a special dividend of $7 a share to return cash to investors.

“It’s a good business that still has ample room to grow,” Gary Bradshaw, a Dallas-based money manager at Hodges Capital Management Inc., which oversees about $800 million including Costco shares, said in a phone interview yesterday. “In tough times, people are more conscious about their spending. There is tremendous value at Costco. The special dividend shows management has confidence they will continue to grow earnings going forward.”

Bloomberg News

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