Stocks Extend Rebound for 2nd Day With Slim Gains
Stocks ended a tepid trading session Wednesday with a moderate advance, extending Tuesday’s rebound from recent profit taking.
In commodities trading, natural gas futures prices continued to surge, reaching 19-month highs in New York.
On Wall Street, the Dow Jones industrials started the day with a loss, but finished up 14.88 points, or 0.2%, at 8,589.14.
The Nasdaq composite also recovered from an early decline to close up 5.83 points, or 0.4%, at 1,396.59.
Winners topped losers by 18 to 15 on the New York Stock Exchange. On Nasdaq, winners had a slight edge.
Blue chips were under pressure early in the session after paper and personal products maker Kimberly-Clark warned that its fourth-quarter and 2003 earnings would be below expectations. The company said fourth-quarter results would be below year-ago earnings because of heated competition in the diaper market.
However, the stock’s decline was modest: It lost $1.15 to $46.78.
After regular trading ended, Kimberly-Clark rival Procter & Gamble raised its estimate for operating earnings growth in the current quarter to the high single digits, from previous guidance of mid- to high single digits. The company cited strength in its health-care unit and in developing markets.
P&G;, a Dow stock, eased 19 cents to $87.46 in regular trading, then jumped to $89.65 in after-hours activity.
P&G;’s optimism matches the view many institutional investors have about corporate results, analysts said.
“You have an improving picture and a better story for 2003,” said Kevin Caron, market strategist at Ryan, Beck & Co.
Some market bulls say with news of corporate financial scandals dissipating, investors will be paying closer attention to the economy’s progress, which bodes well for stocks.
“My belief is that we have completed the unwinding of the [market] bubble, and the stock market will recover with the economy,” said Hugh Johnson, chief investment officer at First Albany Corp.
Still, the profit taking that slammed the market last week shows that many investors have trigger fingers, analysts said.
In other trading Wednesday, near-term natural gas futures in New York closed at $4.71 per million British thermal units, up from $4.64 on Tuesday and the highest since May 2001.
Prices have surged in recent weeks as cold weather in much of the nation has drawn down gas supplies.
In the Treasury bond market, yields eased slightly across the board. The 10-year T-note fell to 4.02% from 4.05% Tuesday.
Among Wednesday’s market highlights:
* Insurance stocks were mostly higher after MetLife said it expects operating earnings in 2003 to rise at least 10% as it cuts costs. The stock jumped $1.50 to $28.15.
Also in the sector, American International Group gained 87 cents to $61.62, CNA Financial rose $1.98 to $26.28 and Hartford Financial was up 61 cents to $47.33.
* Some gas-related stocks advanced. Nicor rose $1.01 to $32.80 and Kinder Morgan added 45 cents to $34.89.
* Health-maintenance organization shares attracted buyers. WellPoint Health jumped $1.76 to $70.80 and Oxford Health gained $1.33 to $37.45.
* Baxter International slid $1.93 to $28.78 after the medical products firm said it will sell 13 million new shares of stock to pay for acquisitions and retire debt.
* Many software stocks rallied after Lehman Bros. analyst Neil Herman said Oracle may top consensus revenue and earnings estimates when it reports quarterly results Dec. 18.
Oracle, the third-biggest software maker, jumped 60 cents to $11.30. Other winners in the sector included PeopleSoft, up 59 cents to $17.97, and Computer Associates, up 27 cents to $13.68.
