NEW YORK >> An upbeat earnings outlook from retailer Sears, Roebuck lifted Wall Street out of its malaise today, sparking a broad rally across the market on hopes that profits are improving and that higher stock prices will prove justified. Sears outlook lifts stocks;
AT&T plans 1-for-5 splitBy Amy Baldwin
Associated PressThe Dow Jones industrials rose more than 170 points, the biggest gain in more than a month. But analysts were skeptical the momentum would last, noting that earnings season is just beginning and Wall Street has yet to see a preponderance of companies confirm that business is turning around.
"A rebound is a very fair label of today's action," said Scott Bleier, president of Hybridinvestors.com. "But the sustainability of it all remains ques- tionable, particularly since we are in preannouncements and earnings reports season."
The Dow rose 173.06 to 10,381.73, ending a two-session losing streak. The last time the index rose more was on March 4, when it gained 217 points. The Standard & Poor's 500 index advanced 12.66 to 1,130.46, while the Nasdaq composite index rose 24.49 to 1,767.06.
Advancers led decliners more than 2 to 1 on the New York Stock Exchange, with 2,259 up, 898 down and 199 unchanged. Volume was 1.43 billion shares vs. 1.22 billion yesterday.
The NYSE composite index rose 6.48 to 597.32, the American Stock Exchange composite index jumped 11.53 to 909.96 and the Russell 2000 index rose 8.29 to 511.30.
The Treasury's 2-year note fell 1/32 to 100 11/32; its yield rose 2 basis points to 3.44 percent. The 10-year note fell 1/4 to 97 1/4; its yield gained 4 basis points to 5.24 percent. The 30-year bond fell 1/2 to 95 11/32; its yield rose 4 basis points to 5.70 percent.
Investors bid Sears up $2.98, or 5.8 percent, to $54.18 after the retailer indicated its first-quarter results would be better than expected because of better inventory controls and other organizational changes, although revenues remain soft.
The buying momentum quickly spread across the market, including to the tech sector. Cisco and IBM rebounded despite concerns about the tech bellwethers' earnings. IBM gained $1.27 to $89.01 after sliding on a profit and revenue warning Monday. Cisco rose 73 cents to $15.55, recovering some of its loss yesterday on speculation it would reduce its forecast.
Oracle dropped 43 cents to $11.55 on ongoing speculation that the software maker's earnings would be lower than expected. Concern about disap- pointing earnings also plagued WorldCom, which fell 63 cents to $4.77.
Brokerage stocks slipped on news reports that the state of New York was expanding its investigation into alleged conflicts of interest involving Wall Street analysts. Merrill Lynch, which was publicly identified as a target of the probe Monday, fell $1.17 to $50.92. Goldman Sachs lost 11 cents to $84.49.
There were other reminders that the market's difficulties are not over. Xerox slid 34 cents to $9.94 after The Wall Street Journal reported the Securities and Exchange Commission had notified two former company officials they might face civil charges for accounting fraud.
In another development, AT&T Corp. said it plans a 1-for-5 reverse share split after completing the sale of its cable- television unit later this year to Comcast Corp. AT&T shares fell 59 cents to $14.42.
AT&T's phone revenue is falling amid unprecedented competition from Verizon Communications Inc. and other companies. Soaring debt and the declining stock price forced Chief Executive Officer C. Michael Armstrong to break up the company, abandoning his earlier strategy to sell cable-TV, phone and wireless services under one roof.
After the market closed, Yahoo! said its first-quarter loss widened to $53.6 million because of costs to write down the value of assets after a change in accounting rules. The loss widened to 9 cents a share from $11.5 million, or 2 cents, a year earlier. Revenue rose 6.9 percent to $192.7 million from $180.2 million.
Yahoo's stock, which fell 2 cents to $18.44 in the regular session, was trading at $18.82 in after-hours.