Stocks Rise for Third Day in a Row
Upbeat earnings from Google and Boeing helped lead stocks higher for a third straight session Wednesday, as investors also were cheered by the Federal Reserve’s pledge to continue going slow with interest rate increases.
In other markets, long-term bond yields held steady after the Fed’s latest rate hike, and the dollar also was little changed.
The Dow Jones industrial average added 44.85 points, or 0.4%, to 10,596.79.
The Standard & Poor’s 500 index was up 3.78 points, or 0.3%, to 1,193.19. The tech-heavy Nasdaq composite rose 6.36 points, or 0.3%, to 2,075.06.
Advancing stocks outnumbered losers by more than 3 to 2 on the New York Stock Exchange and by 4 to 3 on Nasdaq.
Stocks have rallied in six of the last seven sessions, recovering from a pullback in January.
Google and Boeing were the latest companies to earn applause from investors after topping analysts’ forecasts for fourth-quarter earnings.
Google, the Internet search giant, rocketed $14.06 to a record $205.96 on its strong profit report, issued late Tuesday. The stock traded as high as $216.80 at the start of the session.
Boeing reported lower earnings but they beat expectations. Its shares gained $1.19 to $52.23.
“We do have an optimistic feeling coming off of earnings season. A good percentage came in above expectations, and there was some ratcheting up of growth rates from a lot of companies,” said Michael Palazzi, managing director of equity trading at SG Cowen Securities.
At midday, the Federal Reserve announced that it had raised its benchmark short-term interest rate to 2.5% from 2.25%, the sixth such increase since June. The move had been expected.
More important, analysts said, was that the central bank repeated that it expected to stay on a “measured” pace with rate increases.
“The Fed is doing an excellent job at telling the market that they are going to normalize interest rates one baby step at a time,” Robert Stein, head of Astor Asset Management in Chicago, told Bloomberg News. “Investors may have other worries, but they should not be interest rates.”
The Treasury bond market also appeared to be unworried by the latest Fed move. The bellwether 10-year T-note was unchanged at 4.14%.
Shorter-term yields inched up, reflecting expectations for more rate increases ahead. The two-year T-note was at 3.29%, up from 3.28% on Tuesday.
The next potential hurdle for markets: The government on Friday will report on January employment growth.
In other market highlights:
* The euro slipped against the dollar, ending at $1.304, down from $1.305 on Tuesday. Many traders are awaiting the weekend meeting of the Group of 7 industrialized nations for signs of whether the group will allow the dollar to fall further.
* Near-term crude oil futures fell again, losing 43 cents to $46.69 a barrel after the government’s latest petroleum inventory report showed an unexpected rise in gasoline supplies even as oil inventories eased.
* Stocks rising on earnings reports or forecasts included utility company TXU, up $2.67 to $72; software firm Adobe Systems, up $4.39 to $62.29; casino operator Harrah’s, up $2.38 to $66.19; and shoemaker Skechers, up 58 cents to $15.29.
* On the downside, Cummins slumped $6.29 to $72.75 after the diesel engine maker projected 2005 earnings of $8 to $8.30 a share, below analysts’ consensus forecast of $8.55.
* Irvine-based Quality Systems rose 71 cents to a record $69.85. After regular trading ended the maker of healthcare information systems said it would split its stock 2 for 1.
* Canada’s main market index rose 0.4% to 9,303.94, a four-year high, helped by continued strength in commodity stocks.
