U.S. Markets Look Past Negatives To Close Up

U.S. stocks overcame disappointing guidance from Caterpillar and an unexpected dip in existing home sales to finish higher Monday. Energy and materials stocks led the markets higher, rebounding with the price of crude oil and precious metals in commodities trading. Healthcare and consumer stocks also turned around from early declines to end moderately higher. Most other industry sectors in the S&P 500 finished narrowly higher although utilities failed to make up enough ground before the close.

Catepillar (CAT) -- often viewed as a bellwether for the global economy -- helped establish a negative tone when the heavy equipment maker missed Q1 EPS and revenue expectations and cut its FY13 revenue forecast by at least $3 bln to a new range of $57 bln to $61 bln. CAT also trimmed its EPS EPS guidance, now projecting earnings this year of around $7 per share, compared to its prior guidance looking for earnings of $7 to $9 per share.

But CAT turned around late and finished nearly 3% higher, benefiting from its plans to buyback another $1 bln of its shares over the next year. Company executives also said they were seeing an upswing in China during their conference call with analysts and the media, also helping over initial pessimism over the company's expectations of a decline in the global commodities business.

U.S. Housing
Traders responded similarly to existing home sales last month, with shares of several homebuilders initially falling after Monday's report found existing home sales slid 0.6% during March to an annualized rate of 4.92 mln homes. That lagged analyst expectations looking for a 1% rise and a 5.03-mln annual pace.

But helping stem any declines were surprising strong financial results from Halliburton (HAL) and Hasbro (HAS). HAL, the oilfield-services company was able to overcome a 1% decline in North American revenues in its Q1 ended last month with brisk activity in the Middle East and Asia and the company beating analyst projections by $0.10 with a $0.67 per share quarterly profit.

HAS also surprised by posting a 2% year over year increase in sales during its traditionally slow Q1 for the toy-maker to $663.7 mln. Adjusted net income of $0.05 per share also topped estimates by a penny.

Revenue increased 2% to $663.7 mln, also topping the analyst consensus by $24.9 mln in what traditionally is a weak quarter for HAS following the holiday gift-giving season in the prior quarter.

Stocks also got a boost over the past weekend when central bankers attending a G-20 summit in Washington, D.C., in a surprise move, did not criticize Japan's aggressive stimulus efforts. European stocks also were bolstered by indications that Italy may soon form a new government after President Giorgio Napolitano agreed to serve a second term.

Commodities
Crude oil and precious metals ended higher, helping lift energy and materials stocks to solid gains. Crude oil for May delivery settled 75 cents higher at $88.76 per barrel. June gold also settled higher, climbing $25.70 to $1,421 per ounce while May silver rose 36 cents to finish at $23.32 per ounce. May copper slipped 2 cents, ending at $3.13 per pound. May natural gas also declined, ending 14 cents lower at $3.27 per 1 mln BTU.

Here's Where The Markets Stood At Day's End

• Dow Jones Industrial Average up 19.66 (+0.14%) to 14,567.17
• S&P 500 up 7.25 (+0.47%) to 1,562.50
• Nasdaq Composite Index up 27.49 (+0.86%) to 3,233.55

• Hang Seng Index down 0.14%.
• Shanghai China Composite Index down 0.12%.
• FTSE 100 down 0.10%.

• (+) AIM, Aceepts $39-mln buyout offer from aircraft parts-maker TransDigm Group (TDG), which will pay $7.75 per share in cash for each AIM share.
• (+) ABIO, Announces an agreement with Medtronic, Inc. (MDT) to collaborate on the treatment of chronic diseases, including cardiac rhythm disorders as well as working together on ARCA's upcoming clinical trial of its lead developmental drug, Gencaro.
• (+) PWER, Agrees to a $1-bln buyout offer from Switzerland's ABB, which will pay $6.35 a share in cash for each PWER share.
• (+) MPR, Receives $210-mln buyout offer from CECO Environomental (CECE). The offer will pay $7.25 in cash and $6.50 in CECE stock in exchange for each MPR share.
• MPR shareholders will receive $13.75 a share - including $7.25 in cash and $6.50 in CECE stock

• (-) NVR, Homebuilder reports Q1 net income of $6.84 per share, down 75% from the prior-year period and trailing analyst expectations by $1.21 per share. Consolidated revenues rose rose 28% to $770 mln, also lagging estimates by around $70.9 mln.
• (-) HMX, Gives back about half of Friday's 14% advance that followed the Mexican company announcing plans to sell its stake in prison projects.
• (-) RL, Settles bribe probe, agreeing to pay $882,000 penalty and give back about $734,000 in improper profits by a subsidiary in Argentina accused of offering bribes and gifts to government employees.
• (-) FABK, Announcing plans to delist from the Nasdaq Stock Exchange on May 10 and become a privately held firm.