Sprint Nextel Corp. plunged more than 6 percent Monday after Raymond James downgraded the shares because of the stock’s recent rise.
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Equity analyst Richard Prentiss Jr. changed the rating of stock in the Overland Park wireless carrier to “Market Perform” from “Outperform.” The stock closed at $5.18, down 34 cents.
Meanwhile, Mission Hills-based Layne Christensen surged almost 7 percent. Its shares climbed $1.34 to $20.95.
Overall, stocks mostly rose as growth in manufacturing provided more evidence that the economy may be picking up, or at least not getting any worse.
The gains came after news that U.S. manufacturing grew in September for the first time in four months.
The Institute for Supply Management, a trade group of purchasing managers, also said its gauge of manufacturing employment rose following a decline in August. That's a hopeful sign that the government may report job growth in its monthly survey of the labor market on Friday.
Also Monday, the government said U.S. builders spent more on home construction in August, the latest positive sign for the housing market.
Investors are looking for signs that workers will have more money to spend, said Jerry Webman, chief economist for OppenheimerFunds Inc. That's a “virtuous cycle” that can generate some of its own fuel for a recovery.
“If you're going to manufacture more, you're going to employ more people, and if you employ more people, you're going to pay them money, and they're going to buy some stuff,” helping the economy, Webman said.
It was still a choppy day on Wall Street. The manufacturing report came out half an hour after trading began, and sent stocks higher. The Standard & Poor's 500 index rose as much as 1.1 percent.
But market indexes gave up most of their gains in the afternoon. The decline started after Federal Reserve Chairman Ben Bernanke said the Fed needed to keep interest rates low because the economy wasn't growing fast enough to reduce high unemployment.
It wasn't clear whether investors were reacting directly to Bernanke's remarks or just taking profits from a morning where stocks showed their strongest gains in days. Monday was only the third day since Sept. 17 that the S&P 500 has risen.
The S&P climbed 3.82 points to close at 1,444.49. The Dow Jones industrial average rose 77.98 points to close at 13,515.11. The Nasdaq composite fell 2.70 points to close at 3,113.53. The Bats 1000 rose 38.43 points to close at 16,124.85.
Monday was the first day of trading of the fourth quarter, and the early gains were a welcome change of pace from the way the last quarter ended. U.S. indices fell on Friday for the fifth day out of the previous six.
Quincy Krosby, market strategist at Prudential Financial, said investors thought the news about the economy had stopped getting worse. Besides the U.S. manufacturing news on Monday, she noted that recent data from China suggested that manufacturing had improved there as well.
“The numbers were still weak, but they were not as bad as before,” Krosby said. “So that was a positive backdrop for the market.”
Goldman Sachs jumped $3.18, or 2.8 percent, to $116.86 after Barron's wrote that investors were too pessimistic on the investment bank's prospects.
Other financial stocks rose, too. Bank of America rose 13 cents, or 1.5 percent, to $8.96, and JPMorgan Chase rose 49 cents, or 1.2 percent, to $40.97.
Wendy's Co. fell 28 cents, or 6.1 percent, to $4.25 after a Janney Capital Markets analyst lowered his rating on the stock, saying there are seeing signs that the hamburger chain's revenue won't be as strong as expected.
Markets around Europe rose. An audit of 14 Spanish banks showed the lenders need an extra $77.6 billion in capital. That's roughly what was expected, and well within the amount Madrid can get from fellow European countries. A slight improvement in a survey of the eurozone's manufacturing sector also helped.
However, credit rating agency Moody's might downgrade Spain's debt to junk status this week. That's likely to limit enthusiasm in Europe until the Moody's decision is known.
Here’s the rundown on Kansas City area stocks:
Capitol Federal Financial rose 4 cents, or 0.33 percent, to close at $12.00.
Cerner Corp. rose 2 cents, or 0.03 percent, to close at $77.41.
Collective Brands Inc. rose 2 cents, or 0.09 percent, to close at $21.73.
Commerce Bancshares Inc. fell 25 cents, or 0.62 percent, to close at $40.08.
Compass Minerals fell 2 cents, or 0.03 percent, to close at $74.57.
DST Systems Inc. rose 50 cents, or 0.88 percent, to close at $57.06.
Ferrellgas Partners L.P. rose 5 cents, or 0.26 percent, to close at $19.45.
Garmin Ltd. rose 4 cents, or 0.10 percent, to close at $41.78.
Great Plains Energy fell 2 cents, or 0.09 percent, to close at $22.24.
H&R Block Inc. rose 31 cents, or 1.79 percent, to close at $17.64.
Inergy L.P. rose 19 cents, or 1.00 percent, to close at $19.22.
Kansas City Life Insurance Co. fell 18 cents, or 0.47 percent, to close at $38.35.
Kansas City Southern fell 4 cents, or 0.05 percent, to close at $75.74.
Layne Christensen Co. rose $1.34, or 6.83 percent, to close at $20.95.
O'Reilly Automotive Inc. rose 22 cents, or 0.26 percent, to close at $83.84.
Sprint Nextel Corp. fell 34 cents, or 6.16 percent, to close at $5.18.
UMB Financial Corp. rose 4 cents, or 0.08 percent, to close at $48.72.
Waddell & Reed Financial Corp. fell 29 cents, or 0.89 percent, to close at $32.48.
YRC Worldwide Inc. fell 6 cents, or 0.89 percent, to close at $6.71.
The Associated Press and Bloomberg contributed to this report.