Consumer Confidence, Oil Prices Boost Stocks
A late-day rebound gave stocks a moderate advance Tuesday as lower oil prices and an unexpected jump in consumer confidence soothed investors’ unease over a batch of mixed earnings.
The market struggled for much of the session after disappointing profit reports from United Parcel Service and 3M renewed concerns about the economy.
But companies including Altria Group, AT&T; and Lockheed Martin impressed analysts with their quarterly results.
Share prices jumped in the final 90 minutes of trading as buyers returned. The Dow, which had surged 182 points Monday, ended with a gain of 52.66 points, or 0.5%, to 11,103.71, a two-week high.
Wall Street found support from the day’s economic news. Consumer confidence rose this month despite soaring gasoline prices, the Conference Board said, and a separate report of a modest slowdown in existing home sales last month also brightened hopes of a soft landing for the economy.
The back-to-back market rallies Monday and Tuesday encouraged some analysts.
“I think there was some degree of relief when the market was able to hold to the lows and not follow the pattern of the past couple of months: following up days by giving everything back,” said Russ Koesterich, senior portfolio manager at Barclays Global Investments.
Winners topped losers by 2 to 1 on the New York Stock Exchange and by 3 to 2 on Nasdaq.
The Standard & Poor’s 500 index rose 7.97 points, or 0.6%, to 1,268.88, and the Nasdaq composite index gained 12.06 points, or 0.6%, to 2,073.90.
Oil prices renewed their decline as energy traders awaited developments in the conflict between Israel and Hezbollah militants in Lebanon. Near-term crude futures in New York sank $1.30 to $73.75 a barrel.
Treasury bond yields inched up as the economic news appeared more upbeat than some bond traders had expected. That could dim hopes for a pause by the Federal Reserve in its credit-tightening campaign.
The 10-year T-note yield rose to 5.07% from 5.04% on Monday.
Among the day’s highlights:
* UPS plunged $8.20 to $71.80 on its earnings report and a downbeat 2006 forecast. Higher fuel costs took a toll on results. That hurt other transportation stocks, including Burlington Northern, which fell $2.30 to $67.50, and FedEx, which lost $1.13 to $109.31.
* 3M slid $3.58 to $68.11 after posting second-quarter earnings at the low end of its already reduced forecast. It also said earnings in the current quarter might miss estimates, in part because of higher expenses.
* On the plus side, Altria Group, the parent of cigarette maker Philip Morris, said its quarterly profit edged up 2%, and the company boosted its full-year forecast. Altria climbed 56 cents to a record $80.05.
* AT&T;, the country’s largest telephone company, and Texas Instruments, the world’s biggest maker of mobile-phone chips, also boosted optimism with their earnings reports. AT&T; jumped $1.17 to $28.95 and Texas Instruments added $1.11 to $28.95.
Elsewhere in the tech sector, SanDisk shot up $5.91 to $46.11. The maker of data storage products said second-quarter profit excluding costs for stock options and other items was 58 cents a share, topping the 44-cent average estimate of analysts.
* Lockheed Martin, the world’s largest defense company, rose $1.69 to a record $78.47 after the company reported higher second-quarter results and raised its 2006 forecast. The company said it expected earnings per share of as much as $5.30 for the year, up from a previous forecast of as much as $4.85.
Also in the defense sector, Boeing gained $2.31 to $83.75, General Dynamics added $1.37 to $69.38 and Northrop Grumman was up $1.02 to $66.90.
* Pasadena-based Jacobs Engineering soared $6.55 to $78.25. The company late Monday said quarterly profit jumped 38% on a 33% increase in revenue.
* Capstone Turbine sank 22 cents to $1.90 after the Chatsworth-based power-systems producer said its chief executive had resigned.
