Most Indexes Climb on Rally in Tech Stocks
A rally in technology shares and flat oil prices helped Wall Street close broadly higher Thursday, but the dollar slid amid new worries about foreign investors’ appetite for U.S. assets.
Most key indexes rose in the session, led by the Nasdaq composite index, which gained 20.65 points, or 1.1%, to 1,953.62 as Internet, chip and software stocks zoomed, helped in part by some upbeat earnings reports.
The Standard & Poor’s 500 index added 2.83 points, or 0.3%, to 1,106.49 as oil stayed below $55 a barrel, rising 6 cents to $54.47 in New York futures trading.
The Dow Jones industrial average was off modestly, weighed down by a slide in Caterpillar after its earnings report. The Dow lost 21.17 points to 9,865.76.
The bigger story of the day was the dollar: It sank to an eight-month low against the euro after European finance ministers said they favored a stronger currency amid rising commodity prices. Gains in the euro will ease the effect of the record price of oil, which is denominated in U.S. dollars, Dutch Finance Minister Gerrit Zalm said.
The euro ended at $1.262 in New York, and the dollar also fell sharply against other currencies, hitting an 11-year low against the Canadian dollar. One U.S. dollar now buys about $1.24 Canadian, down from $1.40 in May.
A weaker dollar helps U.S. exporters, but it also raises the risk that foreign investors could sour on U.S. stocks and bonds -- because each drop in the currency devalues their holdings.
Stocks were cheered somewhat by the Labor Department’s latest report on first-time jobless claims, which fell 25,000 to 329,000 last week, the lowest level since early September.
But there was disappointment over the latest reading of the Conference Board’s index of leading economic indicators, which fell 0.1% in September, the fourth straight decline.
In other market highlights:
* Despite concerns about the dollar’s slide, Treasury bond yields were little changed. The yield on the 10-year T-note inched up to 4% from 3.98% on Wednesday. Traders said investors might need further evidence of a slowing economy before pushing yields lower just three weeks before the Federal Reserve was forecast to raise its key short-term rate another quarter-point, to 2%.
* Computer- and Internet-related shares kept the S&P; 500 in positive territory. In the chip sector, Xilinx soared $2.23 to $30.37 and National Semiconductor added 57 cents to $17.09.
Software stocks up sharply included Citrix Systems, up $2.29 to $22.97, and Macromedia, up $3.23 to $26.66.
In the Net sector, EBay jumped $8.23 to a record $99.59 after it reported sharply higher earnings after trading ended Wednesday.
Google surged $8.89 to $149.38 ahead of its profit report. Other gainers included Yahoo, up $1.21 to $35.70, and AskJeeves, up $2.35 to $36.95.
* Caterpillar dropped $3.76 to $77.03. Its quarterly earnings more than doubled amid unprecedented demand for the company’s machinery from China, India and Russia. But analysts worried about higher raw materials costs, such as for steel.
Also in the industrial sector, Cummins lost $4.98 to $67.76 after its earnings report failed to impress investors.
* Drug company Schering-Plough swung to a profit in the third quarter, posting earnings of a penny a share, with analysts expecting a loss of a penny a share. Schering-Plough gained 26 cents to $16.98. Eli Lilly beat estimates by a penny a share, but lowered its outlook and announced additional job cuts. Lilly was down $2.46 at $52.64.
Struggling Merck slipped 14 cents to $31.26 after it missed Wall Street forecasts by 11 cents a share due to charges related to the withdrawal of its arthritis drug Vioxx from the market.
* Hershey Foods jumped $1.77 to $49.13 on its better-than-expected earnings report.