(Corrects paragraph 11 to show UPS is on Dow transportation
index, not Dow industrials)
* Windstream rallies; set to spin off assets into REIT
* Pfizer, Merck rise as results beat expectations
* Herbalife shares tumble after it cuts sales outlook
* Indexes up: Dow 0.34 pct, S&P 0.24 pct, Nasdaq 0.55 pct
By Rodrigo Campos
NEW YORK, July 29 U.S. stocks rose Tuesday on
news about a spinoff in the telecommunications sphere that sent
most stocks in the sector soaring and on better-than-expected
results from Pfizer and Merck.
Windstream Holdings jumped 18.2 percent to $12.45 in
its most brisk trading on record after the company filed to spin
off assets into a tax-efficient publicly-traded real estate
The strategy triggered bets on long-term advantages for
peers and the S&P telecoms sector index rose 3.9
percent with AT&T up 4 percent to $37.09, Verizon
up 2.4 percent at $52.82, CenturyLink up 9.2 percent to
$41.18 and Frontier Communications up 18.2 percent to
The Windstream spinoff's long reach boosted shares in other
network owners and operators, with Comcast and Time
Warner Cable up more than 2 percent each, lifting the
S&P consumer discretionary sector 0.6 percent.
"The market to some degree has been locked into a range and
struggling to find leadership of late, so the movement in
telecoms is important in that regard," said Gordon Charlop, a
managing director at Rosenblatt Securities in New York.
Dow components Merck and Pfizer reported
better-than-expected quarterly results. Merck's new drugs offset
declining sales of ones facing generic competition and Pfizer
was helped by growing sales of its cancer medicines.
Merck shares were up 1.5 percent
at $58.85 and Pfizer added 0.4 percent to $30.22.
The Dow Jones industrial average rose 58.51 points or
0.34 percent, to 17,041.1, the S&P 500 gained 4.66 points
or 0.24 percent, to 1,983.57 and the Nasdaq Composite
added 24.35 points or 0.55 percent, to 4,469.26.
U.S. consumer confidence jumped in July to a high not seen
since October 2007 but single-family home prices fell 0.3
percent in May on a seasonally adjusted basis, falling short of
"The data has been unremarkable, there's nothing in there to
cause the market to deviate from its current trajectory," said
Charlop. "Unless we have earnings surprises I don't see anything
that will derail the move to the upside."
The Federal Reserve began a two-day meeting on monetary
policy. The Fed could make subtle yet telling changes to its
policy statement due Wednesday, as it plans how and when to
eventually raise interest rates.
Weighing on the Dow Jones Transportation Average,
shares of UPS fell 3.3 percent to $99.32 after the
world's biggest courier company slashed its earnings forecast
for the year due to spending to boost capacity.
The index was down 0.8 percent.
Shares of health insurer Aetna fell 2.7 percent to
$82.54, even as it reported a higher second-quarter profit
helped by last year's acquisition of Medicare and Medicaid
provider Coventry Health Care.
Herbalife cut its sales outlook for the year after
raising it three months earlier, following billionaire investor
Bill Ackman's latest round of accusations against the company
last week. Shares of the weight-loss and nutrition products
company slid 11.9 percent to $59.44.
(Editing by Bernadette Baum)