Wal-Mart outlook
gives stocks a lift

NEW YORK » An improving sales outlook at Wal-Mart Stores Inc. sent stocks higher yesterday as investors, also cheered by a jump in factory orders, looked past another uptick in the price of oil.

Wal-Mart raised its sales projection for June to the highest level since May 2004. That means "2 percent of the economy is coming out and saying their sales are better than forecast," said John Lynch, chief market analyst at Evergreen Investments. "That's the best news of the day."

Investors also latched on to the strongest increase in factory orders in 14 months. Although most of the gain reflected demand for airplanes and parts, the data also indicated that June orders may have been stronger than May.

The Dow Jones industrial average rose 68.36, or 0.75 percent, to 10,371.80.

Broader stock indicators were also higher. The Standard & Poor's 500 index gained 10.55, or 0.88 percent, to 1,204.99, and the Nasdaq composite index rose 21.38, or 1 percent, to 2,078.75.

Stocks may be helped by "a developing consensus on Wall Street that the market is poised to have a better second half of the year," said Tim Connors, chief investment officer for value equities at Delaware Investments in Philadelphia. Investors are predicting the end of the Federal Reserve's yearlong run of interest rate hikes and a move by international central banks to stop increasing interest rates, he said.

Bonds declined, with the yield on the 10-year Treasury note rising to 4.10 percent from 4.04 percent late Friday. The dollar hit a 13 1/2-month high versus the euro, but retreated after that. Gold prices were higher.

Wal-Mart's news was particularly comforting to Wall Street because the retailer and a number of other discounters had partly attributed sluggish sales gains to higher gas prices that limited consumers' ability to spend on non-necessities. The upbeat outlook allowed investors to shrug off oil's higher price.

Crude oil futures rose on persistent fears that the heating oil supply would run short this winter and that aging refineries will have to push production levels to the limit. A barrel of light crude settled at $59.59, up 84 cents, on the New York Mercantile Exchange.

Stocks fell in recent sessions as crude hit new highs, but some analysts say investors are putting too much emphasis on oil prices.

"Energy is 10 percent of business costs," Lynch said. "Wages are a bigger concern; they're 70 percent of business costs."