Star-Bulletin news services
Stocks rise modestly
on investor optimism
NEW YORK >> Investors traded cautiously yesterday, pushing stocks moderately higher for a fourth day in anticipation of earnings reports later this week. Volume was light due to the Yom Kippur holiday.
Analysts said investors were optimistic following Friday's government report showing a pickup in jobs for the first time in eight months. Motorola Inc. got a boost after announcing it would spin off its semiconductor business.
"It's very quiet. Motorola has been the best stock of the day, but people are mostly waiting for earnings to come out," said Todd Leone, managing director of equity trading at SG Cowen Securities.
Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange. Volume was light, with 1.280 billion shares traded, compared with 1.950 billion shares at the same point Friday.
The Dow Jones industrial average closed up 22.67 points, or 0.2 percent, to 9,594.98, having gained 2.8 percent in the previous week. It was fourth-straight day of gains. The broader markets also closed higher. The Nasdaq composite index gained 12.89 points, or 0.7 percent, to close at 1,893.46, following a weekly advance of 4.9 percent. The Standard & Poor's 500 index rose 4.50, or 0.4 percent, to close 1,034.35, having risen 0.9 percent last week. The Russell 2000 index rose 4.45, or 0.9 percent, to 516.73.
The price of the Treasury's 10-year note closed up 5/16 point, while its yield fell to 4.16 percent from 4.20 percent late Friday. Two-year Treasury notes rose 1/16 point and yielded 1.59 percent, down from 1.64 percent late Friday.
Stocks enjoyed a boost last week after a government report showed that businesses added new jobs in September for the first time since January. But while investors are largely upbeat, many are wondering whether prices are too high.
Third-quarter earnings reports will provide the most solid evidence of whether the economy is really improving, said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. Results should "not just meet expectations, but beat expectations," for the market to move higher, he said.
Among the companies reporting this week are Alcoa Inc. today, Yahoo! Inc. tomorrow and General Electric Co. on Friday.
Motorola rose $1.22, or 9.9 percent, to $13.50 yesterday after the company said it would make its semiconductor unit a separately traded company to focus on its mobile phone and other businesses.
PeopleSoft Inc. gained 62 cents to $20.43 after the software maker said its third-quarter earnings will come in higher than its previous forecasts.
Knight Trading Group Inc. climbed $1.85, or 15.3 percent, to $13.95 after the securities-trading firm raised its third-quarter forecast, citing an improvement in trading.
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