Day 2 of Gains Breaks 6-Week Losing Streak
Stock prices rose for a second straight day Friday as bargain-hunting investors extended a broad rally in technology stocks. Adding to Thursday’s strong gains, stocks turned in a positive performance for the week, breaking a streak of six straight losing weeks.
JDS Uniphase and Commerce One were among the biggest gainers, lifting the Nasdaq composite index 64.54 points, or 1.9%, to 3,483.14. The index had fallen in nine of 10 sessions before surging 7.8% Thursday.
“We’ve had some good earnings reports and it looks like the worst is over, at least for the near term,” said Larry Seibert, who helps manage about $2.2 billion for Barrett Associates Inc. “We believe we’ll have a rally into the end of the year.”
The Dow Jones industrial average rose 83.61 points, or 0.8%, to 10,226.59. The Standard & Poor’s 500 index gained 8.17 points, or 0.6%, to 1,396.93. Honeywell International rose $10.13 to $46 after saying it was considering takeover proposals, including--according to CNBC--one from General Electric. Earlier, United Technologies said it ended talks to acquire Honeywell. All three firms are Dow components.
Four stocks rose for every three that fell on the New York Stock Exchange. Almost 1.2 billion shares traded on the Big Board. On Nasdaq, winners topped losers by 23 to 16 on volume of 2.2 billion shares--heavy but below the levels of previous days.
For the week, Nasdaq was up 5%, the S&P; 500 climbed 1.7% and the Dow advanced 0.3%. All had their first weekly gain since Sept. 1.
Nasdaq cut its year-to-date loss to 14%, the S&P;’s decline narrowed to 4.9% and the Dow’s 2000 drop was pared to 11%.
More than half the S&P; 500 companies have reported third-quarter profits, which have risen an average of 16.4% from a year ago, according to First Call/Thomson Financial. Almost 60% of the companies reporting so far have beaten profit expectations, said First Call senior research analyst Joe Cooper.
This was the busiest week for earnings announcements, with about 190 of the S&P; 500 reporting earnings. Next week, First Call expects about 120 companies to report earnings.
Despite the positive results, some money managers aren’t convinced stocks’ recent travails are over.
“I feel great today, but I must see the market close up at least two more times to show conviction,” said Frederick Sears, portfolio manager of the Investors Capital Twenty Fund. “That’ll show that fund managers and the public are coming back in” to stocks.
Sears said he was selling shares of oil companies to buy Cisco Systems, which slipped 94 cents to $57.31. Oil shares rose Friday as renewed violence in the Middle East pushed oil prices up. Crude oil futures for November rose 84 cents to $33.75 a barrel.
While Cisco eased, many buyers continued to flock back to tech leaders. Microsoft jumped $3.31 to $65.19, highest since Sept. 14. Hewlett-Packard surged $5.06 to $96, Broadcom gained $8.06 to $242.19 and Brocade Communications rose $8 to $252.44.
JDS Uniphase climbed $12.44 to $102.38. SDL, which is being acquired by JDS Uniphase, soared $49.89 to $339.02 after releasing better-than-expected earnings. Commerce One gained $6.13 to $70 after beating sales forecasts.
Among Friday’s highlights:
* Circuit City slumped $7.63, or 36%, to $13.81 after the electronics retailer said its fiscal third-quarter profit will fall because of sluggish sales and costs related to store remodeling and exiting the appliance business.
Other appliance retailers slid as well. Best Buy fell $8.44 to $40.13 and Radioshack lost $3.06 to $52.75.
* Ericsson dropped $2.31 to $11.69 and was the most active stock. The company cut profit and sales forecasts for the year because of losses in its mobile phone business. Ericsson is losing phone market share to Nokia, which Thursday predicted record profit in the fourth quarter. Nokia rose $1.06 to $39.19.
* EBay traded as high as $66.50 after saying third-quarter profit rose 13-fold on a 94% sales rise, to $113 million. But the stock closed up 88 cents at $58.06.
Among other Net stocks, Amazon.com gained $3.06 to $30.81, Priceline.com advanced 30 cents to $5.42 and Goto.com rose $1.88 to $12.94.
Market Roundup, C4-5
