Most Stocks Close Up Despite Rebound in Oil
Stocks ended mostly higher Thursday as investor enthusiasm over a sharp drop in initial claims for unemployment benefits offset concern about rebounding oil prices.
Technology and steel stocks were among the day’s leaders on renewed optimism about the economy.
Cellular phone giant Nokia, chip-stock company Texas Instruments and steelmaker Nucor gave upbeat earnings outlooks.
The tech-dominated Nasdaq composite index rose 19.01 points, or 1%, to 1,869.65, and the blue-chip Standard & Poor’s 500 index was up 2.11 points, or 0.2%, to 1,118.38.
The Dow Jones industrial average eased 24.26 points, or 0.2%, to 10,289.10, hurt in part by weakness in drug stocks.
The market’s breadth was stronger than the performance of major indexes might have indicated: Winners topped losers by 9 to 5 on Nasdaq and by 3 to 2 on the New York Stock Exchange, as trading volume rose to the highest level in a month.
The Labor Department reported 319,000 new claims for unemployment benefits for the last week, down 44,000 from a week ago -- the largest drop in claims since December 2001.
An improvement in the nation’s job picture could boost consumer spending.
“We feel the economy is doing OK,” Chris Matlock, manager of the Lighthouse Opportunity Fund, told Bloomberg News. “A lot of anecdotal evidence [suggests] that we’re still growing at a decent rate.”
Growth prospects could be helped by lower oil prices. Crude futures had been declining in recent weeks, but they rebounded Thursday after the government said U.S. oil stockpiles fell 1.4 million barrels last week, to 286 million.
It was the sixth weekly decline and was greater than the drop of about 1 million barrels that analysts had expected.
In New York, near-term crude oil futures jumped $1.84 to $44.61 a barrel.
Federal Reserve officials have reiterated in recent weeks that they believe the economy is coming out of a “soft patch.” The Fed is expected to raise its key short-term interest rate from 1.5% to 1.75% when policymakers meet Sept. 21.
Several major companies Thursday gave upbeat assessments of their profit prospects.
Nokia raised its earnings and revenue forecasts for the current quarter, citing growing mobile phone sales -- the first glimmer of good news in months for the world leader in mobile phones.
Nokia shares surged $1.06 to $13.77.
Texas Instruments helped to stoke demand for depressed semiconductor shares after it said third-quarter earnings would come in above the middle of its previous estimates, even though it also said that demand was weaker than expected.
TI shares jumped $1.94 to $20.77, and the SOX index of major chip shares leaped 5.4%.
In the steel sector, Nucor said higher steel prices would lift third-quarter earnings to as much as $4.60 a share, from a previous high estimate of $3.40. The company also said it would split its shares 2-for-1 and raise its dividend 24%.
Nucor stock zoomed $6.13 to $88.43, a record high.
In other market highlights:
* Tech shares rising with Nokia and Texas Instruments included Motorola, up 96 cents to $16.06; KLA Tencor, up $1.63 to $38.79; and Corning, up 94 cents to $11.09.
* Among steel stocks, U.S. Steel jumped $1.96 to $39.96, International Steel Group gained $1.82 to $33.57 and Reliance Steel was up $1.38 to $40.74.
* Allstate and other insurers fell. Hurricane Ivan, packing winds of 150 mph, moved across the Caribbean on a path that might make it the third hurricane to hit Florida in a month. Allstate lost $1.04 to $46.50 and Hartford Financial slipped 56 cents to $61.84. But many analysts don’t expect heavy losses for insurers.
* Rising oil prices helped lift an index of energy shares 1.3%. Exxon Mobil rose 41 cents to a record $47.48. ChevronTexaco advanced $1.28 to $101.08.
* U.S. Treasury yields gained after results of the government’s auction of 10-year notes were weaker than expected and drew almost no private demand. The notes yielded a higher-than- expected 4.20%. Yields on existing 10-year notes rose to 4.20% from 4.16% Wednesday.
The auction is the last of two this week by the Treasury totaling $24 billion to help finance a record budget deficit. The Treasury sold $15 billion of five-year notes Wednesday.
