Stocks rise as Street parses earnings
NEW YORK » Wall Street ended a choppy session with a moderate advance yesterday after a better-than-expected profit report at Boeing Co.
and a seesaw day in the energy markets.
Boeing, one of the 30 stocks that comprise the Dow Jones industrial average, reported a 38 percent jump in first-quarter earnings. The airplane manufacturer's results, along with stronger-than-anticipated forecasts at chip makers Broadcom Corp. and Anadigics Inc., appeared to buoy investor sentiment about the first-quarter earnings season.
Investors also reacted positively to Liberty Mutual's plans to acquire another insurance company, Safeco. The $6.12 billion deal -- which would create the country's fifth-biggest property insurer -- sent Safeco shares surging $20.71, or 46 percent, to $65.94.
Still, the stock market's movements were somewhat erratic yesterday, as investors concerned about inflation kept an eye on fluctuating oil prices. Oil initially pulled back but then rebounded again, as the government reported a rise in crude inventories but a drop in gasoline stockpiles.
"I think you're just going to get continued volatility," said Kevin Shacknofsky, co-portfolio manager of the Alpine Dynamic Dividend Fund in Purchase, N.Y. He cited investors' concerns not only about rising energy prices, and also the health of the financial sector.
The Dow rose 42.99, or 0.34 percent, to 12,763.22, after spiking 117 points, giving up those gains to trade down 17 points, and then recovering some ground.
Broader stock indicators also closed higher. The Standard & Poor's 500 index rose 3.99, or 0.29 percent, to 1,379.93. The technology-focused Nasdaq composite index logged a more sizable advance, rising 28.27, or 1.19 percent, to 2,405.21. The Russell 2000 index of smaller companies rose 4.40, or 0.63 percent, to 708.11.
Advancing issues outpaced decliners by about 8 to 7 on the New York Stock Exchange. Consolidated volume came to 3.95 billion shares, up from 3.81 billion shares Tuesday.
Light, sweet crude for June delivery rose 23 cents to settle at $118.30 a barrel on the New York Mercantile Exchange, while gasoline touched all-time highs. On Tuesday, May crude futures hit a trading record of $119.90.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.74 percent from 3.69 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices fell.
Boeing rose $3.53, or 4.5 percent, to $82.09 after its earnings report. Broadcom rose $3.84, or 16.3 percent, to $27.39, while Anadigics jumped $2.76, or 33.1 percent, to $11.09.
Some corporate results yesterday painted a lackluster picture, however. Bond insurer Ambac Financial Group declined $2.47, or 41 percent, to $3.56 after it said it swung to a loss of $1.66 billion from a profit of $213.3 million a year earlier. The loss came in part because of charges for bonds backed by soured mortgages.
After the market closed, Amazon.com Inc. reported a quarterly profit increase of 29 percent. The results surpassed analyst expectations, but Amazon shares fell more than 4 percent in after-hours trading, having closed up $1.40 at $81 yesterday. The online retailer's lowered operating income guidance for the year appeared to disappoint Wall Street.