Stocks Rise on Bargain Hunting
Stocks ended higher Friday as a bullish call on computer and printer maker Hewlett-Packard and a brokerage firm’s upgrade of retailer Home Depot lifted the blue-chip Dow.
Many market players spent the trading day bracing for a deluge of quarterly earnings arriving next week, when many of corporate America’s biggest names will report results. Volume was the lowest for a full trading day since May 23.
“You’re rolling into the summer doldrums weekend, and a lot of the industry is out,” said Will Porter, director of equity trading at Roth Capital Partners in Newport Beach. “Everyone’s expectations of earnings are pretty high right now.”
The Dow Jones industrial average ended up 83.55 points, or 0.9%, at 9,119.59. The broader Standard & Poor’s 500 index rose 9.44 points, or 1%, at 988.14. The technology-laden Nasdaq composite index advanced 18.07 points, or 1.1%, to 1,733.93.
Winners led losers by more than 2 to 1 on the New York Stock Exchange and by about 5 to 3 on Nasdaq.
Friday’s gains cemented a second straight up week for the three major stock indexes. For the week, Nasdaq climbed 4.2%, while the Dow rose 0.5% and the S&P; 500 gained 1.3%.
Hewlett-Packard was the Dow’s biggest percentage gainer for the day, ending up 81 cents, or 3.7%, at $22.86, after Prudential Financial initiated research coverage with a “buy” rating.
Home Depot ranked as the Dow’s second-biggest percentage gainer, ending up 74 cents, or 2.3%, at $33.17 after Banc of America Securities upgraded its shares to “buy” from “neutral.”
Wall Street’s mood got an early lift from remarks from General Electric Chairman Jeffrey Immelt, who said earnings would rise 3% to 7% this year. The forecast came after GE cut the top end of its 2003 profit forecast and said its second-quarter earnings fell 14%, in line with analysts’ forecasts. Still, GE gave up early gains to close down 7 cents at $28.12.
In economic news, surging energy costs pushed the producer price index up a steeper-than-expected 0.5%. But the core PPI, excluding volatile food and energy prices, unexpectedly fell 0.1%, the government said.
In another report, the government said the U.S. trade deficit held near record levels in May as exports struggled to show growth, underscoring the weak global economy.
In other highlights:
* Bond yields fell for a fourth day. The yield on the benchmark 10-year Treasury note slipped to 3.63% from Thursday’s close of 3.66%. The 10-year note yield closed Monday at 3.73%.
* Altria Group, parent of cigarette maker Philip Morris USA, once again was among the biggest drags on the Dow. It fell $1.39 to $41.81 on concern an Illinois court may reinstate a $12-billion deposit required to appeal a judgment.
* Intel and Dell Computer gained after analysts said the companies would benefit as spending on computers increases. Intel added 43 cents to $23.34, and Dell rose 70 cents to $33.56.
* Charter Communications, the cable television company controlled by billionaire Paul Allen, surged 23%, gaining 92 cents to $4.90, after saying it would sell $1.7 billion of junk bonds, raising cash to buy back some convertible notes and gain more time to pay debt.
* Japanese stocks tumbled more than 3% as profit taking and economic worries undercut a nearly 11-month high hit earlier in the week. European markets were higher, with key indexes up 0.7% in Britain and 1.7% in Germany.
