Stocks Gain Ground in Choppy Trading Session
Stocks ended with slim gains Wednesday as investors picked through a mixed bag of earnings reports and searched for signs that the U.S. economic recovery will match Wall Street’s lofty expectations.
Bright spots emerged amid the barrage of corporate America’s quarterly results, including those of Internet retailer Amazon.com, which managed to top Wall Street’s second-quarter revenue estimates.
But it was a choppy, lackluster session, and tepid forecasts from industry bellwethers Boeing and AOL Time Warner tempered investors’ enthusiasm.
“There certainly haven’t been many disappointments [in earnings], but there hasn’t been a broad feeling yet that the economy is headed to a new, higher level, which would allow stock prices to go a lot higher,” said Rick Meckler, president of investment firm LibertyView.
Investors also may have been rattled by news late in the session of a shooting at New York City Hall that left a city councilman and his assailant dead.
The Dow Jones industrial average ended the day with a gain of 35.79 points, or 0.4%, to 9,194.24. The broader Standard & Poor’s 500 index rose a fraction of a point, or 0.1%, to 988.61. The technology-laced Nasdaq composite index climbed 13.08 points, or 0.8%, to 1,719.18. It was the third gain in the last four sessions for the indexes.
Winners led losers by a slim 9-8 ratio on the New York Stock Exchange and by 8 to 7 on Nasdaq. Volume was moderate.
With second-quarter earnings season in full swing, investors were preoccupied with a slew of key profit reports.
Amazon.com’s shares surged $5.24, or 15%, to $40.11, after its solid results spurred a number of Wall Street ratings upgrades.
Boeing, the world’s largest aircraft maker, posted a quarterly net loss versus a year-earlier profit. It also cut its forecast for commercial jet deliveries next year and trimmed its 2004 revenue and profit forecast. Still, Boeing, one of the 30 Dow stocks, rose 12 cents to $32.69 after giving up more than 1% earlier in the session.
AOL Time Warner, the world’s largest media company, fell after it reported a sharp increase in its second-quarter earnings. But the company also forecast that revenue from America Online would decline this year. AOL’s shares sank $1.14 to $15.71.
Eastman Kodak, maker of photographic film and a Dow member, rose even after it reported a sharp drop in second-quarter earnings and said it would cut 4,500 to 6,000 jobs. Kodak jumped $2.27 to $26.86 and was the blue-chip Dow’s biggest percentage gainer.
Treasury bond yields fell for a second day. The yield on the benchmark 10-year Treasury note eased to 4.11% from Tuesday’s close of 4.12%. But bonds struggled after a two-year note auction failed to arouse the demand that some market participants had anticipated. Some $25 billion in new two-year notes were sold at a yield of 1.51%.
Oil prices, which fell sharply Tuesday, gained 18 cents to $29.67 in New York as the September contract became the near-month contract. The government reported that U.S. crude inventories fell more than expected last week.
Gold prices surged $8 to $358.60 an ounce as the dollar weakened against the euro.
In other highlights:
* Lucent Technologies, the biggest U.S. maker of telephone equipment, slipped 11 cents to $1.80. The company said fiscal third-quarter sales fell by a third as U.S. demand for wireless-networking gear ebbed.
* Ask Jeeves rose $2.87 to $17.67. The company, which owns the Ask.com Internet search site, posted second-quarter earnings from continuing operations of 9 cents a share, compared with a loss of 12 cents in the same period a year earlier.
* EBay rose as high as $114.60 in after-hours trading after gaining $2.97 to $114.14 in the regular session. The online auctioneer, whose stock has more than doubled in the last year, may split its shares when it releases second-quarter earnings today, analysts said. The stock has been split twice since the San Jose-based company first sold shares to the public in September 1998. Each split was announced with quarterly earnings. The shares have almost doubled from their closing price on the day prior to the last split in May 2000.
* Biotech Amgen added 79 cents to $69.72. The Thousand Oaks-based company reported better-than-expected earnings after the market closed Tuesday.
* Irvine-based Broadcom, the largest maker of chips for cable modems, shed $3 to $23.53. The company said late Tuesday that its second-quarter net loss widened to $2.87 a share from 49 cents a year earlier because of costs related to acquisitions and a stock-option exchange.
Market Roundup, C8-9
