Dow soars 120 points
ahead of Intel report
NEW YORK » Stocks strode higher in a late-session buying surge yesterday, as oil prices stepped back from their highs and investors shrugged off mixed economic data, focusing with renewed optimism on the government's upcoming jobs report. The Dow Jones industrial average jumped more than 120 points.
Trading has been muted all week due to the Republican National Convention in New York and the upcoming Labor Day holiday. Investors were also looking ahead to an after-the-bell outlook from chipmaker Intel Corp. -- which came in gloomy, as expected -- and U.S. employment data scheduled to be announced today.
The markets grew increasingly more upbeat yesterday as rumors swirled among traders that President Bush would allude to bullish job growth numbers in his speech on the final night of the convention. Still, analysts were puzzled by the strength of the rally.
"Could it just be that there's no one in, volume is low, and there's nothing new negative?" asked Janna Sampson, director of portfolio management at Oakbrook Investments.
According to final results, the Dow soared 121.82, or 1.2 percent, to 10,290.28, its highest point in seven weeks.
The broader gauges also rose sharply. The Nasdaq composite index added 23.02, or 1.2 percent, to 1,873.43. The Standard & Poor's 500 index gained 12.40, or 1.1 percent, to 1,118.31. The sprint sent the S&P 500 back into positive range for the year, up 0.6 percent since the start of 2004.
The price of the benchmark 10-year Treasury note fell 34 point with its yield jumping to 4.21 percent from 4.12 percent on Wednesday.
The 2-year note fell 18 point to yield 2.46 percent.
In economic news, worker productivity rose a disappointing 2.5 percent in the spring, the smallest gain since late 2002. The reading by the Labor Department, which measures the amount an employee produces for every hour on the job, missed economists' estimates for a rise of 2.8 percent, and was down sharply from the 3.7 percent pace posted in the first quarter.
In a second report, the department said the number of new people signing up for unemployment benefits rose for the second week in a row, reflecting the lingering impact of Hurricane Charley. Economists were expecting claims to go down.
Separately, the Commerce Department said orders to U.S. factories grew by 1.3 percent in July, following a 1.2 percent advance in June. The increase was led by a big jump in demand for commercial aircraft and parts. Orders for nondurable goods, such as food products and chemicals, rose 1 percent for a second straight month.
Crude prices climbed after Russia's largest oil producer, Yukos, warned of a possible production halt following a Moscow court's decision to freeze its assets as part of an ongoing tax battle. Light, sweet crude for October delivery was up 6 cents to settle at $44.06.