Earnings in Tech Push Up Stocks
Stocks surged Friday as surprisingly robust profit reports from Dell Computer and other technology companies spurred buying in a beaten-down market and investors took a measure of relief from the latest United Nations update on Iraq.
Top U.N. arms inspector Hans Blix offered a muted view on Iraq that seemed to reduce the possibility of an imminent attack on Baghdad over banned weapons, analysts said. Markets in the U.S. and Europe rose as Blix spoke. Wall Street then endured seesaw trading before a late surge gave stocks their best daily gain since early January.
“Based on the comments he made, there was a sense that it probably puts off the war -- at least for the moment,” said Steve Colton, manager of the Phoenix-Oakhurst Growth & Income fund in Scotts Valley, Calif.
Tech stocks got a big lift from Dell, the world’s leading personal computer maker, which reported strong quarterly profit and said sales in its current quarter would be better than expected.
Encouraging earnings reports from video game chip maker Nvidia and tax software maker Intuit also boosted the sector, analysts said.
Among blue-chip indexes, the Dow Jones industrial average gained 158.93 points, or 2.1%, to 7,908.80, and the Standard & Poor’s 500 index rose 17.52 points, or 2.1%, to 834.89. The tech-heavy Nasdaq composite index added 32.73 points, or 2.6%, to 1,310.17.
Fueling Nasdaq, Dell rose $2.52 to $25.77, Nvidia gained $2.17 to $12.04, and Intuit climbed $2.76 to $44.43.
Winners led losers by more than 3 to 2 on the New York Stock Exchange and Nasdaq. Trading volume was moderate heading into the holiday weekend; the market will be closed Monday for Presidents Day.
For the week, the Dow and S&P; 500 gained 0.6%, breaking a four-week losing streak. Nasdaq rose 2.2% for the week.
Some analysts took a sober view of Friday’s rally, noting that stocks appeared to have been “oversold” after falling in seven of the previous eight sessions.
“A little good news goes a long way when the market is overdue for a bounce,” Colton said.
Friday’s economic news was mixed: Strong factory output was offset by a preliminary reading showing a drop in consumer confidence in the latest University of Michigan survey.
In other trading, gold fell for the seventh time in eight sessions as hopes for a delay in a U.S.-led attack on Iraq were boosted by Blix’s comments. Investors often turn to gold as a hedge during times of war.
Crude oil rose to a 29-month high Friday, climbing 44 cents to $36.80 a barrel. Instability in Venezuela along with the Mideast may be adding to worries about oil supply, analysts said.
In the Treasury market, the yield on the benchmark 10-year T-note rose to 3.96% from 3.88% on Thursday.
Among other highlights:
* Another initial public offering had a rough first day of trading as San Diego-based Accredited Home Lenders fell 75 cents to $7.25 after pricing at a lower-than-expected $8 a share Thursday night. Earlier in the week, Infinity Property & Casualty debuted with a loss, but the stock rose 18 cents Friday to $16.18.
* Krispy Kreme Doughnuts surged $2.75 to $31.15 after lifting its profit outlook for 2003, saying it is stepping up the pace of store openings.
* Universal Health Services sank $6.96 to $34.99 after the firm fired its chief financial officer, prompting concerns about the company’s financial statements. The company said CFO Kirk Gorman was replaced after a conflict with auditor KPMG.
Market Roundup, C4-5
