Stocks Rise as Focus Changes
The stock market edged higher Thursday as investors mostly ignored bad news from Iraq, in the same way they largely ignored the fall of Baghdad on Wednesday.
The action on Wall Street continued to suggest that the war is taking a back seat to concerns about the U.S. economy and when it will rebound. Investors will be scrutinizing a report due today on consumer confidence.
Key market indexes traded in a narrow range Thursday, accelerating as the session wore on. Trading remained muted.
The Dow industrials added 23.39 points, or 0.3%, to 8,221.33 after falling 100.98 points Wednesday. The Nasdaq composite was up 8.87 points, or 0.7%, to 1,365.61. It had dropped 26.20 points Wednesday, even as television showed scenes of jubilant Iraqis in Baghdad welcoming Saddam Hussein’s downfall.
If investors generally were unimpressed Wednesday, neither were they ruffled Thursday by news of the assassination of a Muslim leader in Iraq or by a report of a suicide bombing attack against U.S. Marines.
With U.S. military success in Iraq seemingly assured, on Wall Street “the attention has shifted back to ... fundamentals,” said Peter Cardillo, chief strategist at Global Partners Securities in New York.
Investors want to see more signs that the economy is poised to pick up its pace, which would be expected to boost corporate earnings. That would provide more justification for taking stock prices higher, analysts say.
There was evidence Thursday that investors may be able to look beyond what are expected to be disappointing first-quarter results from many companies: Retail stocks mostly rallied despite some dismal March sales data. The start of the war kept many consumers at home.
Wal-Mart gained 88 cents to $54.58 even though the company reported its weakest monthly sales gain in more than two years. Other retail stocks rising included Kohl’s, up $2.55 to $58.26; Ross Stores, up $1.52 to $38.11; and Target, up $1.06 to $31.85. But J.C. Penney fell 81 cents to $18.08.
Companies are just beginning to report first-quarter results. Most of the reports will roll out in the next few weeks.
In a Business Roundtable survey reported Thursday, U.S. chief executives painted a dim picture. Fewer than 1 in 10 said they expected to hire more workers in the next six months. And more CEOs expect to cut capital spending in the next six months than raise it.
But the corporate outlook could change if consumers turn more optimistic, some economists say.
Today, the University of Michigan will report its latest consumer confidence survey. Wall Street is expecting the index to rise, indicating that consumers may begin to open their wallets again.
Among Thursday’s market highlights:
* Yahoo, which on Wednesday reported a fourth straight quarterly profit, led many Internet-related shares higher. The stock jumped $1.40 to $24.27. Other winners included EBay, up $1.74 to $88.70; Netease.com, up $1.43 to $18.93; Infospace, up 30 cents to $11.85; and Doubleclick, up 85 cents to $8.19.
But Network Associates slid $2.54 to $10.80. The maker of McAfee security software reported a first-quarter net loss of $3.69 million and said second-quarter earnings would miss analysts’ forecasts.
* Defense shares were mostly lower. Northrop Grumman slid $2.27 to $81.38, and Alliant Techsystems was off $1.49 to $48.
* Home builders rose modestly. Ryland added 48 cents to close at $48, and Centex gained 56 cents to $59.19.
* Treasury bond yields rose as stocks attracted more capital at bonds’ expense. The yield on the 10-year T-note ended at 3.94%, up from 3.9% on Wednesday.
Market Roundup, C4-5
