Stocks Recover, Helped by Latest Economic Data
Stocks rebounded Wednesday, recovering from the previous day’s losses, as investors latched on to encouraging economic news and bet on solid fourth-quarter corporate earnings.
But there were concerns about today’s session after three technology giants late Wednesday reported quarterly results that disappointed investors.
Stocks rallied amid a number of favorable economic reports, including tame wholesale inflation in December and a decline in the nation’s trade deficit.
The Dow Jones industrial average closed up 111.19 points, or 1.1%, at 10,538.37. The broader Standard & Poor’s 500 index climbed 9.30 points, or 0.8%, to 1,130.52.
The technology-dominated Nasdaq composite index gained 14.69 points, or 0.7%, to 2,111.13, just below the 30-month high reached on Monday.
Winners beat losers by more than 2 to 1 on the New York Stock Exchange and by 3 to 2 on Nasdaq in active trading.
Some earnings reports and forecasts helped stoke optimism. Rockwell Collins, an aviation electronics maker, jumped $2.39 to $32.36 after raising its 2004 profit forecast.
Plantronics, a maker of telephone headsets, soared $5.56 to $40.75 after reporting sharply higher results in its recent quarter and issuing an upbeat long-term forecast.
But fourth-quarter earnings reports issued by Intel, Yahoo and Apple Computer after regular trading ended appeared to be weaker than some investors had hoped. All three stocks fell in after-hours trading.
“The Intel report is one of the top five reports in any given earnings season,” said Brian Pears, head of equity trading at Victory Capital Management.
Intel reported strong quarterly results but its sales forecast for the current quarter did not meet some analysts’ targets.
Also, Southland-based chip maker Qlogic was unchanged at $50.36 in regular trading, then slumped to $46 in after-hours trading following its quarterly earnings report. The company said profit was up 27%, but its 20% rise in sales fell short of some estimates.
The stock market got some help Wednesday from Treasury bond yields, which hovered near the three-month lows reached Tuesday. The bond market’s rally Tuesday followed comments from top Federal Reserve officials, including Chairman Alan Greenspan, suggesting that the central bank feels no need to raise interest rates soon.
Wall Street also may have been cheered by the dollar, which rallied against the euro. The latter ended at $1.267, down from $1.275 Tuesday.
In other highlights:
* Some aerospace issues got a boost from Rockwell Collins’ gain. United Technologies rose $2.45 to $95.85 and Moog jumped $1.73 to $53.73. Northrop Grumman was up $1.20 to $98.75.
* AT&T; Wireless Services rose $1.44, or 17%, to $9.99 after sources said that Cingular Wireless’ interest in acquiring AT&T; Wireless had intensified and that it had the backing of its two parent companies to fund a purchase. The Amex telecom index rose 1.7%.
* Gold stocks fell as the metal’s price pulled back slightly. Barrick Gold lost 77 cents to $21.26 and Newmont Mining fell $1.90 to $44.65.
* Delta Air Lines reported a narrower fourth-quarter net loss as revenue edged higher and it cut costs. Delta shares ticked up 1 cent to $12.15 after rising as high as $12.85.
* Crude oil for February delivery rose 7 cents to $34.50 a barrel after the government said U.S. inventories are at their lowest level in a decade. On Monday prices reached $34.72, the highest since the Iraq war.
* Wednesday marked the fourth anniversary of the Dow’s all-time closing high of 11,722.98 in 2000. The index would have to rise about 11.2% to reach a new high.
