The Wall Street Journal-20080130-Countrywide- Alcoa Gain- VMware Sinks

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Countrywide, Alcoa Gain; VMware Sinks

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Stocks sensitive to interest rates and the economy -- such as Countrywide Financial, Alcoa and General Motors -- spurred markets higher as investors hoped to have their cake and eat it too by averting a recession and getting big rate cuts.

But VMware embodied the technology sector's recent fall from favor, and Yahoo drew some skepticism ahead of its results.

Investors are waiting until 2:15 p.m. EST today "to see whether the Federal Reserve is going to give the market what it wants," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.

Countrywide Financial rose 36 cents, or 6.1%, to $6.31 after its putative acquirer stood by the home lender despite a big fourth- quarter loss amid difficulties selling mortgages in the secondary market.

Bank of America Chief Executive Kenneth Lewis said Countrywide's results were consistent with expectations and "everything is a go" with its deal to buy the lender. BofA shares rose 74 cents, or 1.8%, to 41.94.

A stock behind the Dow's 96.41-point gain was another financial- services giant, J.P. Morgan Chase, which added 1.88, or 4.1%, to 47.45.

IAC/InterActiveCorp (Nasdaq) added 48 cents, or 1.9%, to 25.65 after Chairman and Chief Executive Barry Diller dubbed Liberty Media Holding Chairman John Malone's efforts to seize control of the Internet conglomerate's board "preposterous."

General Motors rose 68 cents, or 2.6%, to 27.21 after the chief financial officer of the auto giant said it didn't expect a recession, adding that margin pressure will likely continue.

Alcoa, which makes aluminum, was another strong performer, rising 1.19, or 3.8%, to 32.66.

Network developer Clearwire rose 2.89, or 23%, to 15.34 on the Nasdaq, and Sprint added 83 cents, or 8.3%, to 10.80 after The Wall Street Journal reported the two again were considering teaming up to build a high-speed wireless network.

Still, profit reports had a mixed reception yesterday.

U.S. Steel fell 7.49, or 6.8%, to 102.58 after the steelmaker logged a decline in fourth-quarter profit even as revenue rose, hurt by pricing of an important industrial ingredient.

Weighing on the technology sector, VMware plunged 28.13, or 34%, to 54.87. The maker of "virtualization" software, which optimizes technology performance, missed the Street's expectations with its 2008 revenue-growth projection.

EMC, which retains an ownership stake in VMware, fell 1.02, or 6%, to 15.89 after the information-technology company's 2008 profit outlook missed Wall Street expectations.

Among other tech stocks, Yahoo (Nasdaq), which disappointed investors with its revenue outlook after the bell, tacked on three cents, or 0.1%, to 20.81 after falling as low as 20.05 during the session.

Health-care issues generally fared better.

Eli Lilly added 91 cents, or 1.8%, to 52.31. The drug maker said it intends to carry strong fourth-quarter growth into 2008.

Zimmer Holdings rose 8.95, or 13%, to 77.03 after the maker of hip and knee implants alleviated fears about its business with a robust 2008 revenue projection.

Trumpeting its move as an "Economic Stimulus Plan for U.S. Shoppers," Wal-Mart Stores cut prices on a range of Super Bowl desirables such as sodas, chips and televisions. Its shares rose 30 cents, or 0.6%, to 49.01.