Stocks Edge Higher on Mixed Reports
Stocks notched slight gains Thursday, rising for a second straight day as investors bought stocks beaten down in recent weeks. But the mood was subdued before today’s September employment report.
The market had surged more than 2% on Wednesday after a report on U.S. manufacturing wasn’t as downbeat as many investors had feared. The Dow Jones industrial average and the Standard & Poor’s 500 index posted their biggest one-day gains since June.
The rally followed a sharp pullback in recent weeks that dragged major market gauges to their lowest levels in at least a month.
In Thursday’s choppy session, the Dow edged up 18.60 points, or 0.2%, to 9,487.80, adding to Wednesday’s 194-point advance.
The technology-laden Nasdaq composite index rose 3.97 points, or 0.2%, to 1,836.22 and the S&P; 500 index climbed 2.02 points, or 0.2%, to 1,020.24.
Winners led losers by 3 to 2 on the New York Stock Exchange and by 8 to 7 on Nasdaq in moderate trading.
Reports released early in the session painted a mixed picture of the U.S. economy. One report showed new orders for manufactured goods fell in August. Another showed that although the number of Americans lining up to claim jobless benefits rose in the latest week, it remained below the key 400,000 mark.
Worries that the economic rebound may not be able to keep pace with the lofty expectations baked into the market during its sharp rise this year have been dogging Wall Street in recent weeks. Investors will be looking ahead to today’s unemployment report for more clues, analysts said, and some fear the nation’s jobless rate could rise.
Concern that the U.S. economy isn’t adding jobs helped push the yield on the benchmark 10-year Treasury note down more than half a percentage point last month. On Thursday, however, the 10-year T-note yield climbed to 3.99% from Wednesday’s close of 3.93% after Federal Reserve officials, including Robert McTeer and Michael Moskow, said economic growth would accelerate into 2004.
Gains among tech stocks were hampered by a report by Merrill Lynch analyst Steve Milunovich that said Sun Microsystems must cut spending and narrow its product focus or suffer more losses and become irrelevant. Sun lost 5 cents to $3.20 and ranked as the most active stock on Nasdaq.
The dollar rose modestly against the yen, but Japan’s currency held near its highest level in 33 months as mounting signs of Japanese economic strength overshadowed a third attempt by the central bank to weaken the currency to help the nation’s exporters.
The Bank of Japan sold yen during Tokyo trading hours after the dollar fell to 110.55 yen, said people familiar with the situation. The yen has gained 2.9% since the Group of 7 finance ministers on Sept. 20 called for less government meddling in exchange rates.
In other highlights:
* Caterpillar helped boost the Dow, adding $1.36 to $72.70. Brokerage Credit Suisse said the largest maker of diesel engines and gas turbines may win an order for as much as 1,400 megawatts of generation, adding to next year’s earnings.
* Comverse Technology, which mainly supplies voicemail software to cell phone companies, leaped $1.26 to $16.27. Lehman raised its rating on Comverse to “overweight” from “equal weight,” saying a recent decline in its shares may offer an opportunity for investors.
* Network equipment maker UTStarcom jumped $2.35 to $34.26. The firm raised its forecast for revenue and earnings for the third quarter and full-year because of better-than-expected business in China.
* Shares of Guess, the L.A.-based designer clothes maker and retailer, rose to a three-year high of $9.95 in intraday trading on strong September sales and investor hopes that sales of full-priced merchandise will drive up margins, analysts said. It ended with a gain of 23 cents at $9.05.
