Stocks Rise, but Tensions Hold Gains in Check
Key stock indexes rose Wednesday for the first day in three as investors nibbled at battered shares and sifted through a mixed bag of earnings news from big-name retailers. But heightened global tensions kept gains in check.
“It’s going to take the Iraq situation to begin to resolve for investors to have a clearer view of what is ahead and for economic news to matter,” said Rick Meckler, president of investment firm LibertyView. “It’s all about politics and it’s all about confidence and, for now, the picture’s too murky.”
Stocks notched mild gains much of the session, slipped after Secretary of State Colin Powell said Iraq still has not made a “strategic political” decision to disarm, then headed higher shortly before the closing bell.
The Dow Jones industrial average climbed 70.73 points, or 0.9%, to 7,775.60. Twenty-five of the 30 stocks in the Dow average settled higher, including financial services giants American Express, Citigroup and JP Morgan Chase.
The broader Standard & Poor’s 500 index added 7.86 points, or 1%, to 829.85, while the technology-heavy Nasdaq composite index rose 6.63 points or 0.5%, to 1,314.40.
The market overall was mixed. Winners outnumbered losers by 7 to 6 on the New York Stock Exchange, but decliners held a narrow edge on Nasdaq. Trading was lackluster, continuing the recent trend that has seen investors sitting on the sidelines while they await the outcome of the Iraq-U.S. standoff.
Earlier Wednesday, the Federal Reserve published its “beige book,” an anecdotal summary of economic conditions around the country.
It said the U.S. economy was stuck in low gear in late January and the first three weeks of February, weighed down by a possible war.
In addition, the Institute for Supply Management index showed the U.S. services sector grew more than expected in February, but at a slower pace than in January.
Government bond yields continued their recent decline on the weak economic news. The yield on the benchmark 10-year Treasury note -- an eyelash below 4% on Feb. 14 -- fell to 3.63% on Wednesday from 3.65% on Tuesday.
Oil and gold, meanwhile, closed modestly lower as traders took some profits -- and a breather -- as they weighed the chances of war in the Middle East. And the dollar fell against the euro and yen.
In other highlights:
* Department store operator Kohl’s, which will open its first Southern California stores Friday, rose $3.29 to $49.55 after posting a 19% jump in quarterly profit Tuesday.
* In the banking sector, shares of American Express gained 38 cents to $33.14, Citigroup’s stock advanced 80 cents to $33.17 and JP Morgan Chase shares added 41 cents to $22.81.
* Oracle fell after a Lehman Bros. analyst, citing industry sources, said February was tougher than expected and that the company’s software license sales could be unexpectedly weak. Oracle’s shares, the most active on Nasdaq, slid 46 cents to $11.17.
* Petsmart fell $3.20, or 22%, to $11.05 after saying its profit during the current fiscal year may rise less than analysts had forecast, and profit during this quarter may decline.
* After the regular session ended, shares of ImClone Systems jumped after the biotech company said it received a $60- million cash payment from Bristol-Myers Squibb. ImClone, which gained $1.16 to $15.27 during the regular session, climbed to $16.16 after hours. The payment from Bristol-Myers was under the companies’ amended March 2002 agreement to develop the experimental cancer drug Erbitux, Imclone said.
* In other after-hours action, General Dynamics advanced to $56.46, after falling $1.61 to $56.39 in regular trading. The defense contractor said it would raise its quarterly dividend to 32 cents a share from 30 cents, an increase of 6.6%.
Market Roundup, C7-8