NEW YORK >> Stocks rose sharply today for a second straight session, lifted by positive earnings news from General Electric and a brokerage upgrade of IBM. The Dow Jones industrial average jumped 316 points to post its first winning week since August. Indexes have first
winning week in 7By Hope Yen
Associated Press"GE is really the bellwether of the market," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston. "If the company can lead us out of this, I think it will give investors some confidence."
Advancing issues outnumbered decliners more than 4 to 1 on the New York Stock Exchange. Volume was heavy. The Dow Jones industrial average was up 316.34, or 4.2 percent, to 7,850.29. Blue chips had their first back-to-back daily gains in two weeks after rising 248 points yesterday.
The broader market also finished higher. The Nasdaq composite index rose 47.09, or 4.1 percent, to 1,210.46. The Standard & Poor's 500 index gained 31.40, or 3.9 percent, to 835.32.
All three indexes recorded their first weekly gains in seven weeks with the Dow rising 4.3 percent, the Nasdaq climbing 6.2 percent and the S&P advancing 4.3 percent.
The Russell 2000 index, a barometer of smaller company stocks, rose 8.75, or 2.6 percent, to 344.93.
The price of the Treasury's 10-year note was down 1 1/32 point today, while its yield rose to 3.78 percent from 3.67 percent late yesterday. Two-year Treasury notes were off 3/16 point and yielded 1.82 percent, up from 1.72 percent yesterday.
General Electric reported a 25 percent increase in third-quarter earnings, matching analysts' expectations. The conglomerate also said it would meet its profit forecast for the year despite tough economic conditions. Shares rose $1.61 to $24.21.
And IBM climbed $6.34 to $63.92 after Lehman Brothers upgraded its stock to overweight. The news boosted other computer stocks, including Intel, which rose $1.04 to $15.22 and Microsoft, which gained $2.49 to $48.87.
Investors, meanwhile, seemed to appreciate a pair of economic reports that fell in line with analysts' expectations and shook off another showing a sharp decline in consumer confidence.
The Commerce Department reported today that consumers cut back spending in September, pushing the nation's retail sales down by 1.2 percent, the largest drop since November. Some analysts forecast a drop of 0.6 percent, while others projected the larger decline of around 1.2 percent.
Separately, the Labor Department said wholesale prices rose by 0.1 percent in September, after being flat in August. The report suggested that inflation is low and isn't a threat to the economy right now.
And the University of Michigan reported that consumer sentiment in October dropped unexpectedly to 80.4 from 86.1 in September, the lowest since the fall of 1993, according to Dow Jones Newswires. Economists had expected the index to hold about steady.
"It's certainly not great numbers, but if investors are starting to view numbers like that as positives, then you know a lot of pessimism has been built into the market," creating opportunities for some stock rallies, Forelli said.
"I think one very good sign today is that you had a big dip in consumer confidence," said Jeffrey Applegate, chief investment strategist at Lehman Brothers. "In a very bear market, you have a process where even though the news flow is still bad, the market has more than discounted the bad news to come, bottoms out and starts to go up."
Decliners included Kindred Healthcare, which fell $11.88 to $15.84, after the nursing home operator announced it would record about $55 million of additional costs for professional liability claims above its normal provision for the third quarter.
Overseas, Japan's Nikkei stock average finished Friday higher 1.1 percent. In Europe, France's CAC-40 rose 5.2 percent, Britain's FTSE 100 climbed 4.7 percent, and Germany's DAX index was up 7.2 percent.