Stocks Move Higher on Economic Reports
The strongest industrial production numbers since June 2000 and a consumer sentiment survey suggesting confidence remains steady pushed stocks higher Friday. But analysts said Wall Street still seemed guarded as investors await more proof that companies are benefiting from the improving economy.
“The economic news is making us feel a little bit better, but I think the key to the market going forward is that first-quarter [profits] need to get better,” said Nick Sargen, global market strategist at J.P. Morgan Private Bank. “We’ve got to start seeing consistent evidence that earnings have turned for the positive.”
The Dow Jones industrial average closed up 90.09 points, or 0.9%, at 10,607.23. The Standard & Poor’s 500 index rose 13.12 points, or 1.1%, to 1,166.16. The Nasdaq composite index gained 14.16 points, or 0.8%, to 1,868.30, snapping a four-day losing streak.
Winners led losers by 4 to 3 on the New York Stock Exchange and by 6 to 5 on Nasdaq. Trading was moderate, even though Friday was the quarterly expiration date for stock futures and options.
For the week, the Dow rose 0.3%, Nasdaq fell 3.2% and the S&P; 500 lost 0.2%. It was the fifth straight weekly advance for the blue-chip Dow, the longest such string since Sept. 1, 2000.
Stocks turned positive early Friday on a Federal Reserve report showing a bigger-than-expected 0.4% increase in output at the nation’s factories, mines and utilities during February.
The data was the strongest evidence yet that manufacturing is emerging from its long downturn and that the recession that began a year ago is easing.
Meanwhile, a University of Michigan report was said to show consumer sentiment at higher-than-expected levels. The consumer confidence index rose to 95.0 this month after standing at 90.7 at the end of February, according to Dow Jones News.
Investors bid financial stocks higher, including American Express, which gained $1.54 to $42.15. Manufacturing stocks also advanced. General Motors rose 85 cents to $60.75, while Caterpillar rose $1.13 to $59.79.
Drug maker Merck, which raised concerns about the successor for its popular Vioxx painkiller, weighed on the Dow, losing $3.69 to $59.75.
Tech stocks were mixed on concerns the beleaguered sector will turn around at a slower pace than the rest of the economy.
Oracle tumbled 84 cents to $12.60 after reporting disappointing third-quarter results and warning that its returns won’t improve before summer.
But Microsoft rose $1.27 to $62.49, rebounding from losses this week caused by concerns its growth would be less vigorous than hoped.
“The focus of the marketplace has moved away from technology stocks since they’re likely to be slow growers for a while,” said Todd Clark, head of listed equity trading at Wells Fargo Securities. “A year ago, if tech or telecom weren’t doing well, it was poison for the overall market. That’s no longer true.”
Meanwhile, fixed-income investors locked in longer-term yields that had reached eight-month highs. The yield on the benchmark 10-year Treasury note fell to 5.33% from 5.41% on Thursday.
Market Roundup, C4-5
