Key Indexes Rise on Upbeat Tech Earnings Reports
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The stock market snapped a five-day losing streak Thursday, helped by surprising strength in some technology companies’ earnings.
But war fears continued to drive the dollar lower and gold prices higher.
The New York Stock Exchange had its busiest session this year, and winners topped losers by 20 to 12 on the Big Board and by 19 to 13 on Nasdaq.
The tech-dominated Nasdaq composite index led major market indexes higher, rising 28.79 points, or 2.1%, to 1,388.27.
The Dow industrials added 50.74 points, or 0.6%, to 8,369.47 despite a plunge in shares of AT&T; in the wake of that company’s quarterly earnings report.
Stocks had tumbled over the last week as worries mounted that a U.S.-Iraq conflict was inevitable. The Dow gave up nearly 524 points, or 5.9%, in the five sessions ended Wednesday.
War fears were compounded by some disappointing 2003 forecasts from companies such as IBM, Microsoft, Eastman Kodak and General Dynamics.
But upbeat reports late Wednesday and Thursday from some technology leaders helped bolster investor sentiment, analysts said.
“Expectations in technology were lowered enough so that fourth-quarter earnings were better than expected,” James Awad, who oversees $800 million as chairman of money manager Awad & Associates, told Bloomberg News.
Chip maker Texas Instruments jumped $1.87 to $16.12 on Thursday and wireless tech firm Qualcomm gained $1.24 to $37.93 after both companies late Wednesday reported fourth-quarter results and raised their forecasts for the current quarter.
Among software firms, PeopleSoft surged $2.08 to $19.55 and Macromedia leaped $2.69 to $15.40 after both reported fourth-quarter profit that beat estimates.
A willingness to buy tech shares is “evidence that people are starting to think maybe the economy will recover this year,” said Al Goldman, market strategist at brokerage A.G. Edwards & Sons.
Analysts noted that fourth-quarter earnings reports overall were showing growth compared with a year ago. Companies in the Standard & Poor’s 500 that have reported have posted average profit growth of 9.9%, according to Thomson First Call.
But optimism about earnings has been muted in the face of war concerns. Those worries drove the euro to a three-year high of $1.075, up from $1.072 on Wednesday.
The dollar’s weakness may push more central banks to hold less of their financial reserves in dollars and more in other currencies, analysts said.
The Prime-Tass news agency in Russia quoted Oleg Vyugin, the Russian central bank’s deputy chairman, as saying that the bank may increase the share of reserves it has in euros, British pounds and Swiss francs and cut its holdings of dollars, Bloomberg News reported.
In commodities trading, near-term gold futures in New York jumped $4.80 to $364.70 an ounce, a six-year high. The metal’s price has surged $47 since Dec. 2.
Among the day’s highlights:
Tech shares moving higher included Cisco Systems, up 63 cents to $14.59; BMC Software, up $1.76 to $19.12; and Yahoo, up 60 cents to $19.08.
On the downside, AT&T; tumbled $4.83 to $20.49 after warning that sales and profit margins would fall this year. And BellSouth slumped $1.73 to $23.55 after saying fourth-quarter profit sank 25%.
Stocks of health maintenance organizations were strong. UnitedHealth Group gained $2.04 to $84.79 after reporting quarterly results that beat estimates.
Gold stocks rallied with the metal. Agnico Eagle surged 53 cents to $14.77; Newmont Mining jumped 92 cents to $29.52.
Market Roundup, C5-6