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Dow, S&P 500 Rise Ahead of Earnings Season

Dan Berman
Hot Stock Minute

Stocks moved higher today as the unofficial start of earnings season gets underway after the close. The Dow and S&P 500 rose roughly 0.5% and the Nasdaq moved 0.1% higher. Today's gains add to the positive momentum from Friday when the Labor Department issued a stronger-than-expected jobs report for June. It showed 195,000 new jobs created when expectations were for roughly 165,000 new jobs.

Shares of Dell (DELL) rose 3% on news that a buyout offer from company founder and CEO Michael Dell is now more likely to be approved. Proxy advisory service Institutional Shareholder Services, also known as ISS, says it's backing Dell and Silver Lake Partners which are jointly offering $13.65 a share in a $24.4 billion proposal. Today's rise follows a 2% drop on Friday when word leaked out that Dell was refusing to sweeten his offer despite the recommendation from a special company committee. Billionaire Carl Icahn has been trying to put a competing bid on the table for shareholders.

Facebook (FB) rose more than 1% today after the social network said it will expand the beta trial of Graph Search to all U.S. users. The tool combs through a user's network to come up with search results. You may recall Mark Zuckerberg using an example where Graph Search could help a person find a good sushi place. Graph Search promises to deepen user engagement but still faces several challenges. So far it doesn't work on Facebook's mobile apps, it doesn't incorporate info from third party apps like Yelp, and it can't find information in status updates.

Shares of Natus Medical (BABY) plunged more than 13% today after the company lowered its preliminary revenue outlook for the quarter. Natus now says it will have sales between $81 million and $82 million when previous guidance was for $86 million to $90 million. Natus sells a variety of health care equipment designed for the screening and treatment of babies. It says weakness in Europe and other overseas markets led to an unexpected drop in sales.

Disney (DIS) rose 1% despite delivering a bomb at the box office over the holiday weekend. The Lone Ranger performed so badly he would probably be afraid to show his face. The masked man and his friend Tonto got took in just $49 million. That might not sound too bad, but it cost the mouse house $250 million to make the movie. The film made little more than 1/3 of what Despicable Me 2 did, even though that film sold more tickets at a discount for children. The sequel, which comes from Comcast's Universal Pictures (CMCSK) opened with an impressive $142 million. Me 2's showing was in fact strong enough to make this the top-grossing July 4th weekend ever.

DaVita HealthCare (DVA) climbed nearly 2% on a report that Berkshire Hathaway has upped its stake in the company by 4.3%. Bloomberg says Berkshire took advantage of a 6% drop in the stock price last Tuesday and grabbed almost 640,000 shares in two days. Now if you're wondering what caused the DaVita drop, it was a proposal to cut Medicare payments for dialysis by more than 9%. But Buffett may be betting there will still be plenty of profits as the number of people with diabetes climbs. DaVita hit an all-time high of more than $131 back in May. It's currently trading about 10% below that.