NEW YORK >> Another wave of positive earnings news from companies such as IBM propelled stocks higher today, giving Wall Street its fifth advance in six sessions. The Dow Jones industrials jumped nearly 240 points. Earnings give
market a liftBy Hope Yen
Associated PressAnalysts said investors were becoming more optimistic after a week of good news from General Electric to Advanced Micro Devices, despite yesterday's steep decline. A belief that stocks were oversold after hitting multiyear lows last week is adding to the good mood.
"I think economy-wise the worst days have passed," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons. "We are very likely in a phase where stocks are catching up from the bottoming of the economy several quarters ago."
Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange. Volume was moderate. The Dow Jones industrial average climbed 239.01, or 3 percent, to close at 8,275.04, more than wiping out yesterday's drop of 220 points. Since Oct. 9, blue-chip stocks have surged 989 points.
The broader market also finished sharply higher. The Nasdaq composite index rose 39.87, or 3.2 percent, to 1,272.29. The Standard & Poor's 500 index gained 19.18, or 2.2 percent, to 879.20. The Russell 2000 index, which tracks smaller company stocks, rose 11.71, or 3.3 percent, to 362.56.
The price of the Treasury's 10-year note was down 3/4 point today, while its yield rose to 4.14 percent from 4.06 percent late yesterday. Two-year Treasury notes were down 1/8 point and yielded 2.08 percent, up from 2.01 percent yesterday.
IBM rose $7.30, or 11.3 percent, to $72.20. Late yesterday, the technology giant reported third-quarter earnings that beat analysts' expectations by 3 cents a share and reaffirmed its fourth-quarter outlook, prompting Merrill Lynch to upgrade the company's stock.
Investors also took heart from a government report today showing housing construction rebounding strongly in September to a 16-year high, and shook off two other surveys indicating a dip in industrial production and a jump in jobless claims.
The Commerce Department reported that construction rose by 13.3 percent to a seasonally adjusted annual rate of 1.84 million, the highest level since June 1986.
However, the Federal Reserve said that production at the nation's factories, mines and utilities dropped by 0.1 percent in September, following a 0.3 percent drop in August. Output at factories also fell for the second month in a row, dropping by 0.3 percent.
And the Labor Department reported new jobless claims rose last week by 22,000 to 411,000, another sign of the sluggish employment market.
"Investors have only been responding to the negative numbers. Now, eyes are being open to the positive numbers," Freeman said. "What happens at major turns in markets is that investors' responses to some of the negative numbers become less dramatic."
Losers included Sears, which fell $10.75, or 31.7 percent, to $23.20, after reporting a 26 percent decline in third-quarter earnings that missed analysts' expectations. (See story C5.) The retailer also reduced its outlook for the rest of the year, citing uncollectible credit-card debt.
Overseas, Japan's Nikkei stock average finished higher 0.8 percent. In Europe, France's CAC-40 rose 3.8 percent, Britain's FTSE 100 gained 2.8 percent, and Germany's DAX index was up 5.4 percent.