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Earnings lift market
By Hope Yen NEW YORK >> Investors sent the Nasdaq composite and Standard & Poor's 500 indexes to their highest levels in three months today after better-than-expected earnings boosted optimism that corporate profits are improving.
Associated PressAnalysts said investors were also reassured by President Bush's comments indicating that Federal Reserve Chairman Alan Greenspan would likely be reappointed.
"If one pulls the camera back and sees the magnitude of growth and earnings reported thus far, it's relatively impressive against the backdrop of an economy that had effectively stalled while waiting for Operation Iraqi Freedom," said Charles G. Crane, strategist for Victory SBSF Capital Management.
Advancing issues outnumbered decliners 11 to 3 on the New York Stock Exchange. Volume was moderate.
The Dow Jones industrial average closed up 156.09, or 1.9 percent, at 8,484.99, having dipped 8.75 yesterday. It was the average's highest finish since March 21, when the blue chips closed at 8,521.97.
The broader market also rose sharply. The Nasdaq advanced 26.99, or 1.9 percent, to 1,451.36, the highest since Jan. 14. The S&P 500 index gained 19.36, or 2.2 percent, to 911.37, the best level since Jan. 16. The Russell 2000 index rose 5.86, or 1.5 percent, to 391.16.
The price of the Treasury's 10-year note was unchanged, while its yield fell to 3.98 percent from 3.99 percent yesterday. Two-year Treasury notes were up 1/32 point and yielded 1.65 percent, down from 1.69 percent yesterday.
Investors have been carefully watching this week's earnings news as they await reports due out Friday on the gross domestic product and consumer confidence. Analysts say investors are looking for clear signs the economy will rebound by year's end.
"What we're seeing is hope and expectations building for the second half of the year," said John Caldwell, chief equity strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.
But he added, "We just hope to caution that we're looking at a modest growth rate. ... Companies are reporting earnings that beat already lowered expectations, and we're not seeing a whole lot of guidance for future periods."
Everest Re climbed $10.25, or 16.7 percent, to $71.70 after the reinsurer posted a jump quarterly earnings and raised its 2003 earnings estimate, citing improved conditions in the casualty market. The results boosted other insurance companies, including American International Group, which rose $2.41 to $56.91.
Lockheed Martin rose $3.30 to $48.55 after the defense contractor posted quarterly profits that beat analysts' expectations; it also raised its outlook for 2003. The results boosted other defense stocks.
Kimberly Clark gained $2.65 to $49.90 after the maker of Kleenex and Huggies diapers reported first-quarter profits that beat expectations by 3 cents per share; it also reaffirmed its full-year outlook.
Overseas, Japan's Nikkei stock average finished 2.2 percent lower. In Europe, France's CAC-40 advanced 0.6 percent, Britain's FTSE 100 rose 0.7 percent and Germany's DAX index gained 2.1 percent.
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