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"Sealing" a deal

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The major market averages are hovering near the unchanged levels on this trade-shortened Friday with sector action mixed.

Shares of Sealed Air Corp. (NYSE:SEE) $37.10 +51.55% is surging on a morning gap higher at $34.50 from Wednesday's close of $24.48 after the company said it reached an agreement with all parties to resolve asbestos-related claims and pending fraudulent transfer claims made against the company in connection with the 1998 W.R. Grace transaction. Sealed Air said the settlement deal calls for the company to contribute 9 million shares of SEE common stock and calls for payment of $512.5 million in cash plus interest, at a 5.5% annual rate.

The news from Sealed Air has had a positive impact on other stocks that have seen their shares price action weighed on by asbestos litigation with McDermott Intl. (NYSE:MDR) $3.10 +24.49%, W.R Grace (NYSE:GRA) $2.00 +19%, Georgia Pacific (NYSE:GP) $19.95 +13.5%, Halliburton (NYSE:HAL) $21.02 +9.53%, Honeywell (NYSE:HON) $25.78, which is a Dow component seeing gains.

Sector action is mixed with the Dow Jones Home Construction Index (DJUSHB) 314.60 -1.17% and Semiconductor Index (SOX.X) 377.21 -1.17% the only sectors showing losses greater than 1%. Earlier this morning, the Semiconductor Industry Association's report showed worldwide chip sales rose 1.8% sequentially in October, indicating that some demand recovery is starting to present itself.

Shares of commercial airliner United Airlines Corp. (NYSE:UAL) $2.66 -26% are the second biggest loser in today's market after the Wall Street Journal reported that UAL suffered a blow in its struggle to avoid filing for bankruptcy-court protection when its mechanics voted to reject pay cuts vital to the carrier's request for government aid. With retracement taken from the March highs of 114.33 to the recent lows of 26.95, the Airline Index (XAL.X) 43.22 -0.62% finds horizontal resistance at its 19.1% retracement of 43.63 and may have sector bulls cautious here and looking for an upside break at 46 to signal a continuation rally from the October lows.

Jeff Bailey

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