Declaration of a mistrial in Rhode Island's lead-paint lawsuit resounded on Wall Street yesterday as shares of Sherwin-Williams and other lead-paint makers jumped after jurors said they could not reach a verdict in the case.
Sherwin-Williams shares shot up, climbing nearly 14 percent in less than 20 minutes after Superior Court Judge Michael Silverstein announced the mistrial. At 2:50 p.m., just as the mistrial was declared, the stock stood at $25.04. By 3:10 p.m., it was up to $28.01.
The Sherwin-Williams price peaked at $28.55 before falling back a bit to close at $27.68, up $3.12, or 12.7 percent, from Monday.
The $3.12 climb represented a $470-million gain in the company's market value -- the price of the stock multiplied by the number of shares -- in one day.
The Rhode Island trial has been followed closely by Wall Street analysts worried the case could open the lead-paint makers to huge damage awards and lead to lawsuits by other states.
Efraim Levy, a Standard & Poor's analyst, said the Rhode Island suit has been a cloud hanging over Sherwin-Williams.
"It's been a concern somewhat analogous to the asbestos issue, and this was the first case that went to trial," Levy said. "So there were concerns about a precedent."
Assuming the case goes to trial again, Levy said, "I wouldn't say the cloud is gone."
Shares in other U.S. companies that are named in the suit also increased after yesterday's mistrial, but not as dramatically as Sherwin-Williams, which is primarily a paint company. The others are more diversified with operations in other industries.
ConAgra Foods stock gained 52 cents, or 2.16 percent, to close at $24.63
NL Industries shares climbed 20 cents, or 1.24 percent, closing at $16.38.
Shares in E.I. du Pont de Nemours and Co. rose 60 cents, or 1.48 percent, to end the day at $41.20.
