NEW YORK – Shares of major U.S. companies with asbestos liabilities climbed Friday on growing hopes that the U.S. government may intervene in an attempt to limit the extent of any future exposure to asbestos settlements, money managers said on Friday.
Among those companies with liabilities that are gaining in afternoon trade on the New York Stock Exchange are Halliburton Co., Georgia-Pacific Corp., both up more than 8 percent, and USG Corp., which shot up more than 21 percent.
``There are rumors that the president is going to discuss asbestos and talk about liability limitations,'' said Seth Tobias, a money manager for Circle T Partners, referring to President Bush's State of the Union address on Tuesday. Tobias said that nearly 40 percent of the Dow Jones Industrial Average has asbestos exposure.
White House officials declined to comment specifically on talks of asbestos, saying that the president's comments on Tuesday are expected to focus broadly on the war on terrorism, homeland security and ways to lift the economy out of recession.
Shares in building materials company USG jumped $1.49 to $8.54, forest products company Georgia-Pacific rose $2.13 to $23.88, oil driller and services company Halliburton rose more than a $1 to $14.42, packaging company Crown Cork & Seal Co. Inc. gained more than 6 percent to $4.70, and Dow Chemical Co., the No. 2 U.S chemical company rose about 4 percent higher to $29.09.
``The thing driving some gains today is the rumor that Bush is going to cap asbestos litigation,'' said portfolio manager Uri Landesman. ``It's kind of been rocking the market.''
An explosion of asbestos-related legal claims is battering many of the most recognized manufacturing names in the United States, and threatens to push some into bankruptcy, said money managers.
Industry experts said today's rebound is also a reaction to being heavily oversold on indiscriminate asbestos fears.
``Now that investors have had a chance to look at this in the sober light of day and listened to the year-end conference call ... the asbestos problem appears to be contained,'' said Tom Escott an analyst at SunTrust Robinson Humphrey.
``It's not going away, it is serious, but at least the problem appears to be contained.''
Money managers and industry experts place the blame for these fears related to asbestos claims squarely on class-action lawyers, who have clouded the outlook of these companies.
``These stocks, like Minnesota Mining & Manufacturing Co., Halliburton and Georgia-Pacific, were oversold last week on lawyer-induced fears of asbestos issues. Now the stocks are coming back to reality,'' said Paul Foster, an investment strategist at Beyondthebull.com.