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Today: With a week of strong gains, two of three major stock indexes are in the black for 2011, and the Nasdaq still has a chance to get there; analysts expect more next year. Also: SunPower (SPWRA) makes a deal with majority owner, and Hewlett-Packard (HPQ) issues patch for security flaw.
Week of gains puts stock indexes in position for yearly gains
Wall Street capped off a strong week Friday with more gains as stocks rally toward a possible gain for the year.
The Nasdaq composite index finished the week up 2.5 percent, the Dow Jones industrial average increased 3.6 percent and the Standard Poor’s 500 index rose 3.7 percent. The SP’s gain of 0.9 percent on Friday put it into the black for 2011 with just a week to go; it is now up a scant 7.7 points on the year, or 0.6 percent. With the Dow now up a solid 6.2 percent on the year, the only major index trailing its 2011 starting point is the tech-heavy Nasdaq, which has fallen 1.3 percent this year with only a week to make up that difference.
Of course, those finishing points would have seemed
far out of reach when stocks took a giant dive last summer, and it was anyone’s guess how they would finish up during the wild volatility that followed (and has somewhat continued). But before last year began, investors were looking for big gains. Now, they’re saying the same thing about 2012.
Howard Silverblatt, senior index analyst at Standard Poor’s says the SP 500 index should rise to 1,400 by the end of 2012, up almost 12 percent. Binky Chadha, chief strategist at Deutsche Bank, says the SP 500 could hit 1,500 by the end of 2012, a 20 percent gain.
Stock analysts focused on individual companies who gave price targets for the stocks in their specialty collectively predicted the SP would end 2012 at 1,457, up 16 percent. Of course, that same metric last year predicted an increase of 9 percent for the SP.
But this year’s volatility has caused caution beyond the predictions, as investors and analysts see larger issues at work that could throw Wall Street for a loop once again, even as economic analyses show the U.S. is on an upswing.
“Normally, you wonder, How will sales do? How are managements doing?” Silverblatt told AP. “Now there are so many high-level issues that affect the market.”
SunPower rises after deal to acquire major stockholder’s subsidiary
Silicon Valley’s hottest stock Friday was San Jose solar manufacturer SunPower, which worked out a deal with its largest stockholder in which it acquires a French solar company in effectual exchange for about 6 percent of its own company.
According to the news release announcing the deal, SunPower will pay $165.4 million in cash for Tenesol, a 28-year-old company with its hands in every aspect of the solar industry. Tenesol’s owner, French oil giant Total — which earlier this year bought 60 percent of SunPower — will buy 18.6 million shares of SunPower stock for $8.80 apiece as soon as the deal closes. That stock purchase, at a 50 percent premium from SunPower’s Thursday closing price, will net SunPower $163.7 million.
So Total’s stake in SunPower goes from 60 percent to roughly 66 percent, and SunPower grows and gains a respected foothold in the European market.
“We said on day one that the partnership with Total would provide strength to our balance sheet, access to new markets and investment in research and development. In six short months, we have seen these benefits accrue to SunPower,” SunPower President and CEO Tom Werner said in the news release.
SunPower stock shot up as the markets opened, reaching $6.99, an increase of 19.5 percent. The stock settled later in the session, however, and closed at $6.00, a gain of 2.6 percent. The stock traded at almost five times its normal volume, even as overall volume was light on the final Friday before Christmas.
Hewlett-Packard issues patch to ‘mitigate’ printers’ security flaw
Less than a month after a team of Columbia researchers informed the public that Hewlett-Packard LaserJet printers had a security flaw that could allow hackers to remotely take control of the flaw, the Palo Alto tech giant announced a possible fix.
The researchers found that LaserJet printers, and possibly similar devices, did not verify software upgrades contained within so-called remote firmware updates. The researchers were able to offer firmware updates that included malicious software and then take control of the printer.
On Friday, HP issued a news release reiterating that no customers have reported unauthorized access to their LaserJet printers, and offered a firmware update that the company says will “mitigate this issue.” The update is available at www.hp.com/support, in the “Drivers” category.
Hewlett-Packard stock rose 0.1 percent Friday.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Up 19.19, or 0.74 percent, to 2,618.64
The blue chip Dow Jones industrial average: Up 124.20, or 1.02 percent, to 12,293.85
And the widely watched Standard Poor’s 500 index: Up 11.33, or 0.9 percent, to 1,265.33
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, the Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.