Stocks Gain Despite New Terror Warning
Stocks ended broadly higher Thursday as more buyers stepped up after the slump in prices for most of this month.
Key indexes rose even though oil prices stayed close to record highs, and despite a new terror warning.
The Dow Jones industrial average added 12.17 points, or 0.1%, to 10,129.24, its third straight gain.
The broader market was considerably stronger. The Standard & Poor’s 500 index rallied 5.01 points, or 0.5%, to 1,100.43, and the Nasdaq composite jumped 22.80 points, or 1.2%, to 1,881.06.
Winners topped losers by more than 2 to 1 on the New York Stock Exchange and on Nasdaq.
“We’re getting a great buying opportunity” after the decline in stocks in July, Jessica Caie, who helps manage $2 billion at Cohen, Klingenstein & Marks in New York, told Bloomberg News.
The Dow is down 2.9% this month. The Nasdaq is off 8.1%.
The market has been hit by some weaker-than-expected economic reports in recent weeks, and by some major companies’ warnings that their financial results in the second half may not meet Wall Street’s estimates.
But some money managers say the concerns are overdone.
Bill Miller, manager of the Legg Mason Value Trust stock mutual fund -- one of the best-performing funds of the last 10 years -- told clients in a mid-year update issued on Thursday that, “All in all, the environment for equities looks fine, especially with the market having declined modestly since the beginning of the year.”
He said he is “fully invested and bullish” on stocks.
In commodity markets, near-term crude oil futures in New York slipped 15 cents to $42.75 a barrel. Russia’s justice ministry lifted a freeze on the sale of property of three of the Yukos oil company’s production subsidiaries, easing a possible pinch on world oil supplies.
On Wednesday, the threat of a production halt by Yukos sent crude prices to a record high.
Stocks’ rally was interrupted late in the day, after law enforcement officials said that the FBI had warned local police agencies to be on guard against possible terrorist attacks in California and New Mexico.
But the market resumed its climb in the final 90 minutes of trading.
Wall Street is keen to see today’s government estimate of second-quarter gross domestic product growth, for a closer look at how the economy has been faring. Treasury bond yields were slightly lower on Thursday in anticipation of the report.
Among Thursday’s market highlights:
* Health insurer Aetna shot up $5.27 to $84.25 after its second-quarter earnings beat analysts’ estimates. The news lifted other health-care issues, including UnitedHealth Group, up $2.21 to $64.01, and Anthem, up $1.26 to $82.31.
* Other stocks moving on earnings reports included MetLife, up $1.23 to $35.53; online commerce firm InfoSpace, up $8.07 to $36.57; recreation-products maker Brunswick, up $3.74 to $38.68; telecom equipment supplier JDS Uniphase, up 44 cents to $3.44; and Guitar Center, up $2.96 to $45.05.
* On the downside, Whole Foods Market slumped $4.39 to $81.62 after it warned that expansion costs could hurt earnings in fiscal 2005.
Bristol-Myers Squibb slid $1 to $22.57, a 15-month low, after the drug giant reported sharply lower second-quarter earnings and said results in 2005 and 2006 might miss estimates as it faces more patent expirations.
* General Motors dropped $1.37 to $42.75 after Goldman Sachs and Lehman Bros. analysts downgraded their ratings of the stock amid worries about an inventory buildup. Rival Ford Motor eased 24 cents to $14.95.
* In the technology sector, semiconductor shares recouped some of their recent losses. The sector has been among the biggest losers this month.
PMC-Sierra rose 75 cents to $11.75, Intel gained 78 cents to $24.24, Micron Technology jumped 64 cents to $13.52 and Broadcom added $1 to $34.85.
