Sector Snap: Casinos climb with broader market

Shares of casino operators rose Monday as the overall market climbed on home improvement retailer Lowe's Cos. better-than-expected profit report and optimistic outlook, while MGM Mirage gained after an analyst upgraded the stock and its majority shareholder bought more shares.

MGM Mirage said Monday that billionaire investor Kirk Kerkorian recently purchased about 14.3 million shares from a 143 million public stock offering. The stock was priced at $7 a share, according to a filing with the Securities and Exchange Commission.

MGM also got a boost from an upgrade to "Overweight" from "Neutral" by JPMorgan's Joseph Greff.

MGM's stock rose 70 cents, or 9.1 percent, to $8.37 in afternoon trading. The shares have traded in a range of $1.81 to $53.67 over the past year.

Bernstein Research's Janet Brashear was a bit more cautious on MGM, saying in a client note that the Las Vegas-based casino operator "has consistently disappointed from a returns perspective" and will likely be weighed down by a long and drawn-out market recovery. She reaffirmed an "Underperform" rating and $7 price target.

While other casino operator's stocks were mostly up as well Monday, Brashear said the shares were probably rising with the broader market.

Investors picked up stocks across several industries, pushing the Dow Jones industrial average up more than 160 points and erasing nearly half the losses it suffered last week. Lowe's, the nation's second-largest home improvement chain, reported a first-quarter profit that handily topped Wall Street's estimates. The retailer also lifted its full-year earnings forecast _ an encouraging sign for the market that activity in the housing industry could be improving.

Shares of Las Vegas Sands Corp. added 53 cents, or 5.7, percent, to $9.76, while Wynn Resorts Ltd.'s stock increased $2.26, or 6 percent, to $40.16. shares of Ameristar Casinos Inc. climbed $1, or 5.3 percent, to $19.76.