Tech stocks lead the way
Stocks climbed Thursday despite some downbeat economic reports after better-than-expected earnings at Oracle suggested that spending on technology was holding up despite slowing economic growth.
Tech stocks led the way up after Oracle’s upbeat results poked holes in Wall Street’s recent pessimism.
“We’re finding good growth in technology,” said Michael Koskuba, a manager at Victory Capital Management in New York. “Oracle can be a bellwether in technology and capital spending in general.”
EBay and Amazon.com, meanwhile, rallied on a favorable analyst report, and shares of three tech companies that reported results after the market close rose in after-hours trading.
In the regular session, economic news appeared at times to weigh on investors, and the Dow Jones industrial average was in negative territory for a good part of the day.
The Philadelphia Federal Reserve said at midday that its index of regional business conditions showed a reading of a negative 5.7, down sharply from a positive 8.2 in November.
The report came after word that a gauge of future business activity fell last month to its lowest level in more than two years. The Conference Board said its index of leading indicators, which looks three to six months ahead, dropped 0.4% in November. The reading suggests that the economy could weaken in 2008 amid tight credit and continued troubles in the housing sector.
The Dow Jones industrial average rose 38.37 points, or 0.3%, to 13,245.64.
Broader stock indicators also gained. The Standard & Poor’s 500 index advanced 7.12 points, 0.5%, to 1,460.12, and Oracle’s results helped push the tech-heavy Nasdaq composite index up 39.85 points, or 1.5%, to 2,640.86.
The Russell 2,000 index of smaller companies climbed 11.41 points, or 1.5%, to 767.54.
Advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange.
Government bond yields rose. The 10-year Treasury note rose to 4.05% from 4.03% late Wednesday.
The dollar was mixed against other major currencies, and gold prices fell.
Oil prices edged down. Crude futures fell 18 cents to $91.06 a barrel on the New York Mercantile Exchange.
In the tech sector, Oracle rose $1.34, or 6.5%, to $22.10 after the No. 1 seller of database software reported earnings and said revenue in its current fiscal quarter would rise as much as 23%, more than analysts had projected.
EBay rose $1.70, or 5.4%, to $33.37 and Amazon gained $1.20 to $90.58 after Sanford C. Bernstein & Co. said they could grow faster than their competitors.
Google climbed $12.32, or 1.8%, to $689.69. The Internet giant won U.S. antitrust approval for its $3.1-billion purchase of Web-ad firm DoubleClick after an eight-month investigation.
Among financial stocks, Bear Stearns rose 82 cents to $91.42 even after reporting its first loss as a public company because of write-downs on mortgage holdings.
Bear gained “on the kitchen-sink belief that they threw everything out there to finish up their year and provide more of a clean slate as we go into 2008,” said Peter Boockvar, equity strategist at Miller Tabak in New York.
MBIA plunged $7.07, or 26%, to $19.95 after the world’s largest bond insurer disclosed it had insured $8.1 billion of complex securities linked to repackaged sub-prime mortgages.
In other market highlights:
* RadioShack surged $1.10, or 6.4%, to $18.22 after Bank of America analysts upgraded the stock to “neutral” from “sell,” citing sales of global positioning devices.
* Research in Motion surged $12, or 11%, to $118.99 in after-hours trading. The BlackBerry maker’s third-quarter profit more than doubled, topping analysts’ estimates.
* Also after hours, Red Hat jumped 89 cents, or 4.7%, to $19.68. The seller of Linux software named former Delta Air Lines Chief Operating Officer James Whitehurst as chief executive and said third-quarter profit rose 39%.
* Micron Technology fell 32 cents, or 4%, to $7.60 after hours. The maker of computer memory chips reported its fourth straight quarter of losses because of slumping prices.
* Accenture rallied $2.28, or 6.5%, to $37.24 in regular trading. The management consulting firm posted better-than-expected earnings and raised its profit forecast for its fiscal year.
* U.S. Steel and Alcoa led gains among raw-materials producers. U.S. Steel rose $3.50, or 3.3%, to $108.76. Alcoa added 90 cents, or 2.6%, to $35.39.
* Hess, the fifth-largest U.S. oil company, fell $2.80, or 3%, to $89.31 after Citigroup cut the stock to “hold” from “buy.”
* FedEx dropped $1 to $93.63. The package-delivery company said quarterly profit fell 6.3% as fuel expenses rose and a slowing economy cut demand for freight shipments.
* Overseas, key stock indexes climbed 1% in Britain, 0.4% in Germany and 0.3% in France. Shares edged up in Japan and fell slightly in Hong Kong.
