Hopes for Profits, Jobs Lift Stocks
Anticipation of a strong earnings season and hopes for a good report on job growth sent stocks modestly higher in a late afternoon rally Tuesday, with the Nasdaq composite index closing above 2,000 for the first time since March 8.
Analysts pointed to a continuing stream of earnings outlooks, many of which promised better-than-expected results when quarterly reports start coming out next week.
A report showing a slight decline in consumer confidence failed to derail the rally. However, light volume suggested that many investors preferred to wait until Friday’s release of employment figures for March before making any big moves, analysts said.
“We’re just taking a breather here, and that’s perfectly normal,” said Bill Groenveld, head trader at VFinance Investments. “But with everything you’ve got going on with the economy and earnings, once the employment numbers come in on Friday, everything is going to rally.”
Oil prices rose sharply after Saudi Arabia, OPEC’s biggest producer, threw its weight behind supply cuts, though some cartel members appeared to be seeking a delay to ease consumer pain. Crude oil for May delivery rose 80 cents a barrel to close at $36.25 in New York trading.
Prices of U.S. Treasuries closed a touch lower, leading to faint increases in yields. The yield on the benchmark 10-year note inched up to 3.90% from 3.89% on Monday.
The euro gained against the dollar, but the yen fell against the U.S. greenback -- and 15 other major currencies -- after a report said Japan’s industrial production had its sharpest drop in three years last month.
The three major U.S. stock indexes were flat for most of the day but climbed in late trading, boosted by a report that General Motors expects improved sales results this month. GM shares rose $1, or more than 2%, to $47.60.
The Dow Jones industrial average rose 52.07 points, or 0.5%, to 10,381.70. It was the second straight day of gains for the Dow, which has advanced in three of the last four sessions.
Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 4.53 points, or 0.4%, at 1,127 and the Nasdaq composite index gained 8.06 points, or 0.4%, to 2,000.63.
Nasdaq had been in negative territory most of the day until the overall rally caught up to technology stocks. While the 2,000 barrier means little on a fundamental basis, crossing it is seen as a psychological boost for many investors who were nervous about falling prices over the last month.
Winners topped losers by 2 to 1 on the New York Stock Exchange and by 3 to 2 on Nasdaq.
Today is the final day of trading in the first quarter -- and a chance for key indexes to crawl back into the black. At Tuesday’s closing prices, the Dow was down 0.7% year to date and Nasdaq was off 0.1%. The S&P; 500 was up 1.4%.
Among Tuesday’s market highlights:
* Many industrial and commodity stocks gained on hopes for a continuing economic recovery. Briggs & Stratton jumped $1.26 to $68.43, Reliance Steel rose $1.21 to $35.95, Georgia-Pacific rallied $1.34 to $34.06 and Monsanto was up $1.12 to $36.14.
* Federated Department Stores surged $2.30 to $53.92 after brokerage Goldman Sachs raised its rating on the shares to “outperform” from “in line.” Other retail stocks rising included Nordstrom, up $1.23 to $39.90; Kmart Holding, up $1.84 to $41.84; and Ann Taylor, up $1.14 to $43.34.
* Energy stocks gained with oil prices. BP rose $1.67 to $51.12, Schlumberger jumped $2.11 to $63.47 and Nuevo Energy rallied $1.07 to $32.47.
* In the tech sector, National Semiconductor added 58 cents to $44.43, FileNet rose 42 cents to $26.86 and Adtran jumped $1.35 to $31.52, but Intel was off 26 cents to $27.43.
Internet stocks attracted buyers. Ask Jeeves soared $3.27 to $36.68 on upbeat comments from a Schwab Soundview research analyst. The stock is up 102% since the start of the year. Other winners included InfoSpace, up $2.61 to $39.43, and IPayment, up $1.08 to $31.56.
* Vascular Solutions rocketed $3.17 to $9.78. U.S. regulators said the company could begin selling a specialty bandage designed to stop bleeding in surgery and other situations.
* Accenture gained 40 cents to $24.45 after posting better-than-expected earnings. The consulting company also announced that Chief Executive Joe Forehand would relinquish his post Sept. 1 but would remain chairman of the company.
Market Roundup, C5