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Stocks rise on positive
earnings, oil price drop
U.S. stocks rose, sending the Standard & Poor's 500 Index to its longest rally in almost nine months. Retailers including Costco Wholesale Corp. and Michaels Stores Inc. gained after earnings surpassed estimates.
Stocks were also helped by a drop in oil prices and a government report that showed the biggest increase in corporate profits in two decades and faster first-quarter economic growth than earlier reported.
"The fact that retailers are doing as well as they are says a lot of good things about this economic expansion," said Bill Thomas, head of U.S. equities at Boston-based Baring Asset Management, which has $2 billion in U.S. equities. "Earnings growth is going to be strong."
The S&P 500 added 6.34, or 0.6 percent, to 1121.28. The benchmark had its sixth consecutive increase, the longest streak since Sept. 4.
The Dow Jones Industrial Average advanced 95.31, or 0.9 percent, to 10,205.20, led by a gain in Boeing Co. The Nasdaq Composite Index rose 8.35, or 0.4 percent, to 1984.50, for its first five-day gain since January.
The price of the Treasury's 10-year note closed up 716 point, while its yield fell to 4.60 percent from 4.66 percent yesterday. Two-year Treasury notes rose 332 point and yielded 2.38 percent.
More than two stocks rose for every one that fell on the New York Stock Exchange. Advancing issues beat declining ones on the Big Board for the eighth day in a row, the first time that's happened since December. Some 1.45 billion shares changed hands, in line with the three-month daily average.
Crude oil futures in New York fell to a three-week low, losing $1.26 to $39.44 a barrel. The Organization of Petroleum Exporting Countries' President Purnomo Yusgiantoro said the group may raise its production quotas "significantly" at a meeting in Beirut next week.
The economy grew at a 4.4 percent annual pace from January through March, faster than the government's 4.2 percent estimate last month, as businesses replenished inventories, government spending rose and home construction accelerated.
Profits jumped 31.6 percent in the 12 months ended in March, the biggest increase since the first quarter of 1984, according to the Commerce Department.
Another report said the number of Americans filing initial jobless claims fell by 3,000 to 344,000 last week, suggesting halting improvement in the U.S. labor market.
Costco, the largest chain of U.S. wholesale clubs, advanced 63 cents to $38.07. Net income for the quarter ended May 9 rose 29 percent from a year earlier to 42 cents a share, boosted by higher sales of gasoline and food. That topped the average estimate of 38 cents in a Thomson Financial analyst poll.
Michaels Stores, a retailer of arts and crafts merchandise, increased $4.62 to $51.32. The company said it had fiscal first- quarter earnings of 42 cents a share. That's more than the average forecast of 37 cents in a Thomson survey.
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