Star-Bulletin news services
Stocks rally ahead
of tech earnings
NEW YORK >> Investors had a surge of optimism yesterday ahead of the first major fourth-quarter earnings reports, sending stocks sharply higher and carrying the Dow Jones industrial average up more than 110 points.
Wall Street managed to shake its nervousness from earlier in the week, investing heavily in blue chips and tech stocks in the hope that Intel Corp. and other major firms would come through with positive earnings results after the close of trading. Intel did easily beat earnings projections, but its first-quarter outlook appeared to disappoint the market, and it and other high-tech stocks fell in after-hours trading and raised the possibility of more selling today.
During the regular session, the Dow closed up 111.19, or 1.1 percent, at 10,538.37, more than making up for a 58-point drop on Tuesday.
Broader stock indicators also closed higher. The Nasdaq composite index was up 14.69, or 0.7 percent, at 2,111.13. The Standard & Poor's 500 index was up 9.30, or 0.8 percent, at 1,130.52.
The NYSE composite index gained 50.36, or 0.8 percent, to 6,559.81.
The American Stock Exchange composite index lost 2.62, or 0.2 percent, to 1,199.43.
Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange. where volume came was moderate.
The Russell 2000 index of smaller companies closed up 4.96, or 0.8 percent, at 586.12.
The Treasury's two-year note slipped 332 to 100 1532, with its yield rising 5 basis points to 1.63 percent. The 10-year note rose 332 to 102, with its yield falling 1 basis point to 4.00 percent.
Analysts said the market was looking to Intel in particular to see if yesterday's gains could be sustained. But while the company posted earnings 8 cents per share above analysts' estimates and boasted record quarterly revenues, its first-quarter revenue forecast of $7.9 billion to $8.5 billion apparently fell short of what Wall Street was looking for.
Intel fell 2 percent in after-hours trading after falling 20 cents to $33.39 during regular trading.
Fellow high-tech bellwether Apple Computer Inc. beat expectations by 2 cents per share, while Yahoo! Inc.'s earnings were in line with estimates. Yahoo! closed down 41 cents at $48.39, while Apple rose 8 cents to close at $24.20. Both stocks were down in after-hours trading, but high-tech stocks were generally lower, a likely response to Intel's outlook.
Earlier, investors were buoyed by positive economic data.
The Commerce Department said the trade deficit shrank to $38 billion in December, the lowest level in a year and lower than Wall Street analysts expected, while the Federal Reserve reported the economy continued to strengthen from late November to the early part of this year.
In addition, the Labor Department said wholesale prices rose by 0.3 percent in December, suggesting inflation is still in check.
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