Tech, financial stocks pull market higher
NEW YORK -- Investors are growing more confident that the bruised economy is starting to heal.
Stocks ended at their highest level in more than two months Thursday following a mix of earnings and economic reports that indicate the pace of the economy's slide is slowing.
Investors jumped into technology, industrial and consumer product stocks as they looked for bets that would pay off in an improving economy. It was the second day that stocks moved sharply higher late in trading after fluctuating for much of the session.
The Dow Jones industrial average jumped 96 points to its first finish above 8,100 since Feb. 9. Earnings from technology companies like Nokia and big banks like JPMorgan Chase & Co. fed hopes that some businesses are stabilizing.
The buying appeared likely to continue Friday, at least in tech stocks, after Google Inc. posted better-than-expected profits and shot higher in after-hours trading.
However two troubled companies, Citigroup Inc. and General Electric Co., were due to report earnings before the opening bell Friday and their results were expected to drive trading.
Although investors do not yet know how well all of America's biggest companies fared in the first three months of the year, there is a growing sense that the market and the economy may have found a bottom.
"Investors are saying Armageddon is off the table, the Cat 5 hurricane has passed," said Phil Orlando, chief equity market strategist at Federated Investors in New York. "They're starting to price in the end of the recession."
A smattering of corporate results offered more check marks for bullish investors.
Nokia jumped 11.4 percent after the world's top mobile phone maker maintained its market outlook and sold more mobile phones than analysts had expected.
JPMorgan Chase rose 2.1 percent after becoming the latest bank to report results that were stronger than predicted. Investors welcomed the news as another positive sign for the struggling industry. Goldman Sachs Group Inc. and Wells Fargo & Co. also had upbeat earnings news in the past week.
Some regional banks got a boost after Regions Financial Corp. said it expects to report a first-quarter profit, driving its shares up 34 percent. Fifth Third Bancorp rose 7 percent, while Huntington Bancshares Inc. jumped 8 percent.
A five-week rally in the market since early March has been driven in large part by growing optimism that the financial industry is on the mend.
"Things are not necessarily getting better, but they are getting less worse," said David Stepherson, a portfolio manager at Hardesty Capital Management in Baltimore.
The Dow ended with a gain of 95.81, or 1.2 percent, at 8,125.43, according to preliminary calculations.
Broad stock indicators rose even more. The Standard & Poor's 500 index rose 13.24, or 1.6 percent, to 865.30, and the Nasdaq composite index rose 43.64, or 2.7 percent, to 1,670.44.
The tech-heavy Nasdaq's gain came after technology stocks lagged the broader market Wednesday as Intel Corp. disappointed investors by declining to provide revenue forecasts going forward.
The Russell 2000 index of smaller companies rose 12.75, or 2.8 percent, to 473.88.
Four stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.6 billion shares compared with 1.5 billion shares traded Wednesday.
Another bright spot came as traders jumped on an initial public offering of shares of Rosetta Stone Inc., a maker of language learning software. The stock, which trades under the symbol RST, jumped $7.12, or 39.6 percent, to $25.12 in its first day of trading.
Illinois Tool Works Inc. rose 6.4 percent after results from the industrial products company weren't as bad as expected. Industrial companies have been hit hard by the recession so the results indicated that the economy could be stabilizing.
There were some disappointments. Southwest Airlines Co. reported a bigger-than-expected loss in the first quarter as traffic fell in what the chief executive called the carrier's toughest revenue environment ever. The stock lost 7.1 percent.
A bankruptcy filing by the nation's second-largest mall operator, General Growth Properties Inc., brought an unwelcome reminder of the economy's lingering troubles and the dearth of available credit.
Meanwhile, bond prices fell, pushing the yield on the 10-year Treasury note up to 2.83 percent from 2.77 percent late Wednesday.
The dollar rose against other major currencies, while gold prices fell.
Overseas, Japan's Nikkei stock average rose 0.1 percent. Britain's FTSE 100 rose 2.1 percent, Germany's DAX index gained 1.3 percent, and France's CAC-40 rose 1.8 percent.