Market Snapshot May 18, 2009, 4:35PM EST

Banks, Homebuilders Lead Stock Rally

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In economic news Monday, the National Association of Home Builders' survey index rose 3 points to 16 in May from 14 in April and 9 in March. It hit a low of 6 in January. Confidence improved in three of the four regions covered, with only the Midwest holding steady. The 6-month ahead outlook index improved to 27 from 24 last month, revised from 25 previously; it was at a low of 15 in February and March. The index of prospective buyer traffic was steady at 13 compared to April, which revised from 14 previously, and compares to a 7 print in December.

In company news Monday, Buffett's holding company, Berkshire Hathaway (BRKA), raised its stake in Wells Fargo to 302.6 million shares from 290.2 million, and its holding in US Bancorp to 69 million shares from 67.6 million.

In addition, Berkshire upped its stakes in Johnson & Johnson (JNJ), Nalco Holdings (NLC), and Burlington Northern Santa Fe (BNI), and reduced stakes in CarMax (KMX), ConocoPhillips (COP), and UnitedHealth Group (UNH).

CF Industries Holdings (CF) said its board of directors has rejected Agrium's (AGU) latest revised offer to acquire all outstanding shares of CF. Following review of Agrium's latest revised offer with management and its legal and financial advisors, CF's board concluded that the offer continues to substantially undervalue the company and is not in the best interests of CF and its stockholders. Furthermore, the board concluded CF's proposed business combination with Terra Industries (TRA) will deliver superior value to CF stockholders.

IDM Pharma (IDMI) agreed to be acquired by Takeda Pharmaceutical Co. Terms: $2.64 cash per IDM Pharma share.

In earnings news, Lowe's Companies posted first-quarter earnings per share (EPS) of $0.32, vs. $0.41 one year earlier, on a 6.6% same-store sales drop and a 1.5% total sales drop. Wall Street was looking for EPS of $0.25. Lowe's sees a second-quarter same-store sales drop of 4%-8% with EPS of $0.51-$0.55 EPS, and a fiscal 2010 same-store sales drop of 4%-8% with EPS of $1.13-$1.25.

Dillard's Inc. (DDS) posted first-quarter EPS of $0.10, vs. $0.04, as improved gross margins, lower advertising and selling, administrative and general expenses offset 13% lower same-store sales and 12% lower total sales.