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Dow Sets Record Closing High Boosted by Housing, Consumer Confidence

Dan Berman
Hot Stock Minute

Stocks bounced back from last week's losses with the major averages closing higher across the board. The Dow rose 0.7% to 15,409, setting a new record closing high. The rise was fueled in part by a pair of strong economic reports. The Case-Shiller housing composite of 20 cities found that single-family home prices rose 1.1% in March. That's the largest gain in almost seven years. Separately, the Conference Board says consumer confidence strengthened in May to its highest level since February 2008, leaping to 76.2 from 69 in April. Expectations had been for 71.

Tiffany & Co. (TIF) rocked it today. The stock shot up 4% after reporting quarterly earnings. The company easily beat estimates coming in with 70-cents a share on revenues of $895.48 million. Analysts were expecting 52-cents a share on revenues of $855 million. There had been concerns that the drop in the yen might hurt Tiffany's sales since Japan is one of its larger markets. But sales actually jumped 15% in the Asia-Pacific market thanks to an expansion in the region's middle class. Shares of Tiffany are now up more than 30% year-to-date.

Utility stocks were some of the weakest performers of the day. Both Exelon (EXC) and FirstEnergy Corp. (FE) shed about 7% on downgrades. The former was moved to hold from buy by Deutsche Bank and the latter was changed to neutral from outperform by Credit Suisse. Exelon has announced of series of executive reshuffles, and conditions in the power market are said to be weak overall.

Dole Food Company (DOLE) took a bruising today. Shares dropped 6% after the food giant announced it will suspend a share repurchase program indefinitely. The company had previously announced it would be buying back as much as $200 million in common stock. Dole says volatility in its strawberry business has been especially high this year. The company has announced it's acquiring three ships with special refrigerated containers at a cost of $165 million.

Call it a valiant showing as Valeant (VRX) rose 8% after the Canadian skin-care company announced a $8.7 billion dollars deal to acquire Bausch & Lomb. Bausch's current owners are an investor group led by Warburg Pincus. The deal extends a flurry of activity in the health care industry as companies struggle to increase profits. Bausch & Lomb is a leader in the $30 billion market for eye-care products and equipment. Valeant shares jumped 13% on Friday as news of the purchase started to break.

Omthera (OMTH), a small pharmaceutical company, nearly doubled in price today on a takeover bid. Astra Zeneca (AZN) announced it's buying the company for $12.70 a share. That sent shares as high as $13.50 up from a closing price of less than $6.75 on Friday. Omthera is testing a drug to treat patients with very high triglycerides. The medication is derived from fish oils and considered a complement to Astra Zeneca's cholesterol drug Crestor. Omthera just went public back on April 11th. Prior to today it had been down about 9%.