Stocks close higher on strong earnings
NEW YORK » Wall Street was mixed yesterday, recovering from an early loss as investors shrugged off disapp- ointing housing and consumer confidence data to focus on stronger-than-expected quarterly earnings. The Dow Jones industrials set a new trading high, and resumed their trek toward 13,000.
Robust first-quarter earnings reports have been driving the market higher over the past week, allowing the Dow to approach 13,000, and there were more upbeat results cheering the market on yesterday: from U.S. military contractor Lockheed Martin Corp., Dow industrials AT&T Inc. and Dupont Co., and chip maker Texas Instruments Inc.
The Dow's strong gains in afternoon trading were driven by a few companies, notably International Business Machines Corp. and Honeywell International Inc., which both made dividend announcements.
The Dow was up 34.54, or 0.27 percent, at 12,953.94. The index set a new intraday high of 12,989.86, less than 11 points away from 13,000.
Broader markets were mixed. The S&P 500 index was down 0.52, or 0.03 percent, at 1,480.41, and the Nasdaq rose 0.87, or 0.03 percent, to 2,524.54.
The Russell 2000 index of smaller companies was down 1.19, or 0.14 percent, at 826.36.
The Nasdaq is slightly above the halfway point to its record close of 5,048.62, while the S&P is just 3 percent below its record close of 1,527.46. Both records were reached in March 2000, at the end of the dot-com boom.
Investors weren't buying with abandon: Declining issues outnumbered advancers yesterday by about 3 to 2 on the New York Stock Exchange, where volume came to 1.65 billion shares, roughly flat with Monday's turnover.
"Everyone is remembering where we were a year ago, when we were all talking about Dow 12,000, and then the market ended up tanking in May," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.62 percent from 4.65 percent late Monday.
The dollar fell against other major currencies, with the euro close to its record high of $1.3667. Gold prices also fell.
Oil prices declined, with a barrel of light sweet crude down $1.30 at $64.59 on the New York Mercantile Exchange.
In earnings news, Texas Instruments surged $2.51, or 7.7 percent, to $34.92 after its first-quarter results surpassed Wall Street expectations.
Lockheed Martin, the nation's largest military contractor, reported quarterly profit rose 17 percent from the year-ago period. However, sales were weaker than expected, and its shares fell $2.25, or 2.3 percent, to $94.82.
AT&T reported profit doubled during the first quarter to beat Wall Street projections. However, shares fell 67 cents to $39.10 as growth in its wireless business lagged.
DuPont posted a 16 percent rise in first-quarter profit on higher sales of seeds and improved pharmaceuticals. Shares of the specialty chemicals maker rose 67 cents to $49.86.
IBM rose $3.28, or 3.4 percent, to $98.49 after the company increased its dividend payout by 10 cents and authorized an aggressive ramp-up of its share buyback program.
Honeywell rose $1.67, or 3.2 percent, to $52.90 after announcing late Monday a dividend of 25 cents a share.