May 10th, 2011
09:41 PM ET

Deals push stocks higher for third day

Some highlights from today's business news:

U.S. stocks rose for third straight day on Tuesday, as investors were bolstered by Microsoft's $8.5 billion deal to buy Skype, along with solid corporate earnings reports and economic data.

"There are just a lot of strong numbers, from earnings to economic data, that keep pushing this market higher," said Frank Davis, director of sales and trading at LEK Securities.

The Dow Jones industrial average rose 76 points, or 0.6%, to close at 12,761; the S&P 500 gained 11 points, or 0.8%, to 1,357; and the tech-heavy Nasdaq Composite added 29 points, or 1%, to close at 2,872.

Shares of Intel, Hewlett-Packard and Cisco were among the Dow's top performers, all rising by more than 1%, while Microsoft was the biggest drag on the blue-chip index, falling 0.5%.

Leading the Dow was media giant Disney, shares of which rose more than 2% before the company's quarterly results. After the bell, Disney reported earnings of 49 cents per share, missing analyst forecasts for 57 cents a share. Disney stock fell 3% in aftermarket trading.

Investors also focused on U.S. import-export data, wholesale inventories and quarterly home prices, as well as the strong Chinese trade report.

U.S. Postal Service reports $2.2 billion loss

The U.S. Postal Service continues to hemorrhage money, with a loss of $2.2 billion in the most recent quarter.

The national mail service said Tuesday that it expects to have a cash shortfall and reach its statutory borrowing limit by the time its fiscal year ends in September. That means the agency could be forced to default on some of its payments to the federal government.

Patrick Donahoe, the Postmaster General, said the service is still seeking changes to federal laws that would allow it to change its business model and potentially save enough money to avoid a default.

"The Postal Service may return to financial stability only through significant changes to the laws that limit flexibility and impose undue financial burdens," Donahoe said in a statement.

At issue is a 2006 law requiring the service to pay between $5.4 and $5.8 billion into its prepaid retiree health benefits each year. In addition, the agency is seeking Congressional approval to eliminate Saturday mail service.

- contributing writer Ken Sweet and reporter Ben Rooney contributed to this report.

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Filed under: Business • Economy
soundoff (3 Responses)
  1. Cesar

    I use the US Post Office over UPS or FED EX. @Outsider, you are a POS. Hahahahahahaah

    May 10, 2011 at 11:03 pm | Report abuse |
  2. AbuDhabiDude

    Abu Dhabi will soon buy over Microsoft. Look what we have done to Manchester Citee

    May 10, 2011 at 11:46 pm | Report abuse |
  3. Zadoc

    This is great news! I feel better about this economy, but my optimism is cautious.
    Poll: When do you think the DOW will hit 14,000 again?,000-again

    May 11, 2011 at 3:48 am | Report abuse |