U.S. Stocks Rise on Profit Reports; Dow Average Nears a Record
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U.S. stocks rose, pushing the Dow Jones Industrial Average toward a record, as profits that topped analysts' estimates lifted shares of retailers and computer- related companies. Costco Wholesale Corp., the largest U.S. warehouse...
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U.S. stocks rose, pushing the Dow Jones Industrial Average toward a record, as profits that topped analysts' estimates lifted shares of retailers and computer- related companies. Costco Wholesale Corp., the largest U.S. warehouse club, led chain stores higher as demand for fresh food helped boost net income. Advanced Micro Devices Inc. had the biggest gain in the Standard & Poor's 500 Index after the second-largest computer- chip maker forecast a 20 percent increase in shipments next year. Today's reports added to evidence that companies' financial results will hold up even as the economy slows. A drop in jobless claims, along with data this week showing a rebound in retail sales, signaled consumer spending will keep driving growth. ``Corporate earnings are continuing to be strong,'' said Patrick Becker, who helps manage $2.3 billion as chief investment officer at Becker Capital Management in Portland, Oregon. ``The slowdown isn't here in any major way. That's part of the reason we're seeing moves up.'' The Dow average climbed 104.31, or 0.9 percent, to 12,421.81 at 3:31 p.m. in New York. The measure last closed at a record on Nov. 17, when it reached 12,342.56. The Standard & Poor's 500 Index added 12.88, or 0.9 percent, to 1426.09, the highest since November 2000. The Nasdaq Composite Index jumped 23.64, or 1 percent, to 2456.05. All three indexes rose for a third day this week. Bear Stearns Cos. and Lehman Brothers Holdings Inc., the Wall Street firms most dependent on the fixed-income market, both reported record fourth-quarter earnings, boosted by corporate bonds and derivatives. Profit Growth Profits at S&P 500 companies have climbed more than 10 percent for 14 consecutive quarters, according to Thomson Financial, tying the longest streak since the 1950s. The earnings gain has helped send the S&P 500 up 13 percent this year, pushing it toward its best annual performance since 2003. A measure of retailers climbed 1.9 percent for the biggest gain among the benchmark's 24 industry groups. Costco, which sells everything from $200 Coach handbags to cases of Gatorade to its club members, advanced $1.05 to $54.19. The company reported an increase in first-quarter profit to 51 cents a share. That compares with analysts' estimate of 50 cents in a Bloomberg News survey. Among other merchants, department-store operator J.C. Penney Co. rose $1.60 to $80.38. Gap Inc., the largest U.S. clothing chain, added 54 cents to $20.11. Economy Watch Economic data this week suggests that consumer spending, which accounts for two-thirds of the economy, will be buoyed by a stable labor market. Initial jobless claims fell to 304,000 last week from 324,000 the prior week, the Labor Department said. Retail sales jumped 1 percent last month, the first gain since July, as shoppers took advantage of early holiday discounts, the Commerce Department reported yesterday. Manufacturing data also provided support to stocks. The Federal Reserve Bank of New York's general economic index fell less than expected, slipping to 23.1. A number greater than zero means that most factories reported business is getting better. Economists surveyed by Bloomberg expected a reading of 17.7. ``The economy seems to be on track for a soft landing,'' or a slowdown that averts both a recession and faster inflation, said Robert Doll, the chief investment officer of global equities at BlackRock Inc., which oversees more than $1 trillion in New York. ``Investors' concerns are slowly but surely dissipating and that means markets go up.'' Advanced Micro, Ciena Advanced Micro, the second-largest maker of personal- computer processors, rallied $2.30, or 11 percent, to $22.47. Company officials said shipments will rise about 20 percent in 2007, twice the rate the company expects for the market. Larger rival Intel Corp. gained 17 cents to $20.87. Ciena Corp., a maker of computer-networking equipment, surged $2.48 to $27.44 after posting its first quarterly profit in five years. Fourth-quarter net income, excluding some costs, was 16 cents
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Costco Wholesale Corp., the largest U.S. warehouse club, led chain stores higher as demand for fresh food helped boost net income. Advanced Micro Devices Inc. had the biggest gain in the Standard & Poor's 500 Index after the...
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