Dow Revives on Earnings Data; Yields Steady
Stocks rebounded Thursday, with the Nasdaq index chalking up its sixth record close in a row as investors cheered upbeat corporate earnings.
Bonds were barely changed.
The Dow Jones industrial average ended up 44.33 points at 7,886.76 after Wednesday’s 120-point loss.
Bellwether technology shares stumbled despite a better-than-expected profit report from Compaq Computer, but the technology-heavy Nasdaq market posted a narrow gain to a record close. Other broad-market measures were higher as well.
Analysts said the stock market turned higher as a morning dip, combined with Wednesday’s steep pullback, spurred some bargain-hunting.
“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., suggesting that traders were hesitant to take too defensive a stance before Friday’s reading on producer price levels during June. “Everyone is assuming the [data] will be benign. It better be.”
In another sign that upward pressure on wages--and prices--may be easing, the Labor Department reported 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.
Meanwhile, U.S. bonds were little changed, with yields near four-month lows, before a report today on producer prices offers investors new clues on inflation.
The yield on the benchmark 30-year Treasury bond held at 6.56%, the same as Wednesday.
Advancing issues outnumbered decliners by a 5-3 margin on the New York Stock Exchange in heavy trading.
The Standard & Poor’s 500-stock list rose 6.24 points to 913.78, and the NYSE composite index rose 3.24 points to 476.27.
Along with the Nasdaq composite index, which rose 4.30 points to 1,490.93, the Russell 2,000 index of smaller companies also set a record, closing up 1.75 points at 399.15.
Among Thursday’s highlights:
* Blue chips were again buoyed by solid earnings news, this time from General Electric, up 1.06 to 69.50, and J.P. Morgan, up 1.81 to 108.19. Georgia Pacific gained 1.06 to 93.38 after reporting earnings that beat the estimates of analysts.
The Dow also drew a boost from International Paper, up 3.06 to 58, and Wal-Mart, which rose 1.50 to 35.06.
* Technology stocks continued their torrid streak, overcoming a weak showing by computer chip bellwether Intel, which fell 2.50 to 150.13.
Apple Computer fell 0.44 to 13.25 after the company said Chairman and Chief Executive Gilbert Amelio resigned, one week before the computer maker is set to report its third-quarter results.
Weaker-than-expected earnings reports sent Seagate Technology down 1.56 to 37.50 and Pairgain Technologies down 1.69 to 16.56.
At the Chicago Board of Trade, corn for July delivery closed down 2 cents a bushel at $2.48. July soybeans closed down 10 cents a bushel at $7.79 and July wheat closed down 4.3 cents a bushel at $3.22.
At the New York Mercantile Exchange, oil prices closed mostly lower after shrugging off news that Colombian rebels had dynamited a pipeline for the second time this week and forced a halt in oil production at the large Cano Limon field.
Crude for August delivery closed down 21 cents a barrel at $19.38.
Overseas, London’s FTSE-100 closed at 4,767.8, up 5.4 points, or 0.11%. In Tokyo, the 225-share Nikkei average closed at 19,754.78, up 57.61 points, or 0.29%.
