Lucent Bounces on Buyout Speculation

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Source: Runnymede Capital Management analysis for trading days from May 5, to May 11, 2005.Neither the Runnymede NJ-30 nor the S&P 500 could pull off a third-consecutive five-day increase; they slipped 0.1% and 0.4%, respectively. But shares of Lucent Technologies jumped more than 7% after an article in Barron?s suggested the stock had hit bottom and the company may be an acquisition target. Similarly, shares of Honeywell International rose on speculation that United Technologies had renewed its interest in buying the rival aerospace and industrial conglomerate. Homebuilder Hovnanian Enterprises announced a 25% increase in the dollar value of its net contracts for the second quarter and a 61% increase in the dollar value of its contract backlog.
Among the decliners, Merck fell after the drugmaker said it had named a familiar face rather than a high-profile outsider to replace embattled CEO Raymond Gilmartin. After Engelhard directors authorized a repurchase program for an additional six million shares, the company gave back some of the previous week?s 7.1% gain. Public Service Enterprise Group announced a 5% rise in first-quarter profit but warned that costs associated with the pending Exelon merger could reduce this year?s earnings by as much as 10¢ a share.

Five Largest Gainers

LUCENT TECHNOLOGIES 7.6%
HOVNANIAN ENTERPRISES 4.0%
HONEYWELL INT. 3.2%
AVAYA 3.0%
MEDCO HEALTH 1.5%

Five Largest Decliners

MERCK -4.1%
ENGELHARD -3.9%
PUBLIC SVC. ENTP. -3.1%
HUDSON CITY BANCORP -2.4%
CHUBB -2.3%

Source: Runnymede Capital Management analysis for trading days from May 5, to May 11, 2005.