Stocks finished with solid gains Friday, following declines in the past few sessions. Technology stocks led the way higher amid some upbeat comments from Intel (INTC) and Nvidia (NVDA).
The Dow Jones industrial average gained 113.3 points, or 1.33%, to 8,604.6. The broader Standard & Poor's 500-stock index was up 13.14 points, or 1.43%, to 933.41. Meanwhile, the tech-heavy Nasdaq composite rose 30.46 points, or 2.04%, to 1,520.15.
"The market is moving up on internal dynamics, which is always good," says Larry Wachtel, market analyst at Prudential Securities. "Coming off three slack days, this is nice."
The tone and sentiment of the stock market seems to have improved over the past month or so, notes Michael Farr, president and chief investment officer at Washington, D.C.-based investment firm Farr, Miller & Washington LLC. "The market seems to be moving higher with the war behind us now, and price of oil is below $30 now, and earnings news and gains have passed," Farr says. "A lack of bad news allowed the market to move higher."
Positive news in the tech sector Friday helped spark the cheery mood. A top executive from Intel told a German newspaper that the company expects a "slight" recovery in the personal computer industry.
Nvidia shares jumped nearly 35% after the company issued a bullish second-quarter revenue outlook. The graphics chipmaker posted first-quarter earnings per share of 12 cents, vs. 47 cents a year ago and a penny above the consensus forecast. Revenue fell 31%, partly reflecting slower shipments into Xbox video games, but the company forecasted second-quarter sales to rise as much as 18% from the first quarter.
Activision (ATVI) reported a fourth-quarter loss per share of 13 cents, vs. EPS of 17 cents, on a 24% revenue drop. The video game maker raised its first-quarter guidance to $140 million in revenues and a penny per share loss. For its second quarter, it sees $130 million in revenue and 5 cents in EPS.
In the telecom area, Qwest Communications (Q) rose on a report in The Wall Street Journal that it is in talks with the Securities and Exchange Commission to settle potential fraud charges regarding "swaps" of fiber-optic capacity with other telecom companies.
Among Dow components, Coca-Cola (KO) shares gained after Bear Stearns upgraded them to outperform from peer perform. Traditional cyclicals Caterpillar (CAT) and United Technologies (UTX), along with financial services outfit American Express (AXP), also helped support the Dow.
Next week, there are plenty of key economic reports to watch, including an update on the trade balance on Tuesday, retail sales for the month of April on Wednesday, and producer price index, weekly jobless claims, and industrial production and capacity utilization on Thursday. On Friday, there's a heavy dose of data including the consumer price index, housing starts, and University of Michigan consumer sentiment.
After a week of robust gains following the Federal Reserve's reference to deflation risks on Tuesday, Treasuries had a small hiccup Friday as stocks turned the tables, but quickly recovered from their shallow corrective dip, says MMS International. The yield on the benchmark 10-year note edged up to 3.70%.
The dollar traded mixed Friday-- it was weaker against the euro, but stronger against the yen amid rumors that the Bank of Japan was covertly massaging the dollar higher. Treasury Secretary Snow reiterated that he favors a strong dollar policy, but says that he has no dollar target in mind and the U.S. does not intervene as a general rule.
European markets were higher Friday, helped by gains in U.S. equities on some favorable high-tech news. London's FTSE 100 index was up 40.5 points, or 1%, to 3,969.4, even though UK Manufacturing fell 0.4% in March, the largest slide in five months. In France, the CAC 40 index rose 28.72 points, or 0.98%, to 2,967.89.
In Germany, the DAX index gained 70.51 points, or 2.44%, to 2,956.59, despite news that German industrial output fell more than expected 1.1% in March. BMW shares rose after Morgan Stanley raised earnings estimates for the automaker.
Asian markets finished higher. In Japan, the Nikkei index gained 120.61 points, or 1.50%, to close at 8,152.16. The market was lifted partly because the U.S. dollar recovered against the yen from the previous day's level. Also, Prime Minister Koizumi announced that he would hold a meeting with economic-policy-related ministers sometime next week.
In Hong Kong, the Hang Seng index rose 183.11 points, or 2.06%, to close at 9,084.16.