Dow Revives on Earnings Data; Yields Steady
U.S. stocks were broadly higher Thursday, lifted in part by some healthy corporate earnings reports and by strength in smaller shares.
The Dow Jones industrials, down 119 points Wednesday in a late sell-off, gained 44.33 points to 7,886.76.
In the broad market, winners topped losers by 18 to 11 on the New York Stock Exchange and by 22 to 19 on Nasdaq.
While the Dow remained below its record of 7,962.31 set Tuesday, indexes of smaller stocks hit new highs. The Standard & Poor’s index of 600 small-cap shares rose 0.84 point to a record 164.14. The Nasdaq composite gained 4.30 points to a record 1,490.93, the sixth consecutive new high.
“It’s still a very resilient market. It doesn’t seem to be willing to give up much ground,” said Michael Metz, chief investment strategist at Oppenheimer & Co. in New York.
Bonds provided a solid underpinning for stocks, as yields were steady ahead of today’s government report on June wholesale inflation. Economists expect the recent benign inflation trend to continue.
That was reinforced by the Labor Department’s report Thursday that the number of U.S. workers filing first-time claims for jobless benefits unexpectedly shot up by 40,000 last week to the highest level in more than a year--implying a slowing economy.
The yield on the Treasury’s benchmark 30-year bond was unchanged Thursday at 6.56%.
With second-quarter corporate earnings reports rolling out, investors are looking for healthy growth to support stock prices, and so far the numbers have been impressive. (Stories, D3.)
Among Thursday’s highlights:
* Stocks reacting favorably to earnings reports included General Electric, up $1.06 to $69.50; J.P. Morgan, up $1.81 to $108.19; Georgia-Pacific, up $1.06 to $93.38; and Marriott International, up 69 cents to $66.
* On the downside, stocks falling on earnings news included Abbott Labs, down 44 cents to $66; PairGain Technologies, down $1.69 to $16.56; and Exabyte, down $1.13 to $12.88.
* Among retailers, Wal-Mart surged $1.44 to $35.06 after saying June sales at stores open at least a year rose 6.4% from a year ago.
* In the industrial sector, International Paper leaped $3.06 to $58, continuing to gain after its announcement this week of a major restructuring. Other industrial winners included Reliance Steel, up $1.63 to $27.56; Union Carbide, up $1 to $50.63; and Caterpillar, up $2.13 to $112.81.
* Wells Fargo recovered $6.63 to $267.25 after tumbling $18.38 on Wednesday after warning of weaker-than-expected second-quarter results.
* SunAmerica rose 50 cents to $53.56. After the market closed, Standard & Poor’s announced that the financial services firm will be added to the S&P; 500 index.
* Pacific Sunwear slumped $1.88 to $28.25. An investor group led by money manager Jeff Vinik said it cut its stake in the firm to 390,100 shares after selling 295,000 shares between June 11 and July 9.
In London, stocks closed marginally higher after the Bank of England raised its benchmark short-term interest rate to 6.75% from 6.50%, in an effort to restrain consumer spending and contain inflation.
In Frankfurt, the benchmark DAX stock index tumbled 63.48 points, or 1.6%, to 3,992.38, one day after crossing the 4,000 mark for the first time.
Hans Tietmeyer, president of the German central bank, said he expected the battered mark to stop weakening against the dollar. But the dollar remained strong in Thursday trading.
In Southeast Asia, most stock markets continued to slide in the wake of fears of regional devaluation of currencies.
