The broader stock market drove higher on Wednesday on solid earnings from blue-chip names while the Nasdaq faltered as tech investors punished technology companies for disappointing results.
The Dow Jones industrial average gained 94.96 points, or 0.90%, to 10,623.62, a new 52-week closing high. The broader Standard & Poor's 500 index added 8.85 points, or 0.78%, to 1,147.62. The tech-heavy Nasdaq composite index gave up 5.53 points, or 0.26%, to 2,142.45, after closing the previous session at a high not seen in more than two years.
Thursday will be another busy day on the corporate earnings calendar. Among the companies scheduled to report results are drugmaker Wyeth (WYE), regional bell BellSouth (BLS), photographic supplies company Eastman Kodak (EK), and digital set-top box maker Scientific-Atlanta (SFA).
The economic data calender is fairly light with figures due out on weekly jobless claims and Decembers leading indicators, which provide a glimpse of the U.S. economy's srength. Last month's leading Indicators are expected to show an increase of 0.2% vs. a 0.3% increase in the previous month.
In equities news on Wednesday, brokerage Merrill Lynch (MER) reported its profit rose to a record $1.2 billion, thanks to increased investment banking activities such as stock and bond sales.
JP Morgan Chase (JPM), which recently agreed to buy Bank One, reported a quarterly profit vs. a loss a year ago as lower credit costs and investment banking activities helped improve performance.
On the economic data front, the U.S. housing sector continued to show resilience as new home construction in December was far stronger than expected. Housing starts rose 1.7% to an annualized pace of 2.088 million units vs. 2.054 million in November (revised from 2.070 million), says economic research outfit Informa/MMS. The firm says to not take the latest data too seriously. "The housing sector is surely very strong, but December starts data show large swings, as seasonal factors magnify small changes in actual starts," Informa/MMS says.
Among the tech companies disappointing investors was Motorola (MOT), which posted fourth-quarter profit that more than doubled as sales broke $8 billion mark for the first time in three years. But the wireless cellphone maker was flogged for failings, such as lagging on the roll-out of camera phones.
Telecom gear maker Lucent (UNP) reported its second quarter of profit in a row as customers continued to buy its products but investors were not pleased.
In other stocks news, mortgage financier Fannie Mae (FNM) posted a rise in fourth-quarter profit as demand for home loans increased thanks to low interest rates.
Union Pacific (UNP), North America's largest rail concern, posted higher quarterly net profit due to a rise in cargo traffic and a gain from selling a trucking unit.
Motorcycle maker Harley-Davidson (HDI) posted 21% higher profits on stronger shipments to dealers, but retail sales were lower than a year ago when demand surged because of 100th-anniversary Harley's the company was selling.
Defense contractor General Dynamics (GD) reported fourth-quarter profit rose thanks to government spending on military ground vehicles and defense technology.
Leather goods company Coach (COH) reported 53% higher profit on greater sales of its fashion accessories rose and the company increased fiscal year guidance.
AMR (AMR), the name behind American Airlines, reported an 80% reduction in its fourth-quarter loss on massive cost-cutting.
Treasuries closed modestly higher despite the rebound in the broader equities market. It was another lackluster session, notes Informa/MMS, with retail flows at a minimum. But bids under the market surfaced quickly. Comments from Treasury Secretary Snow, suggesting the recent payroll report may have underestimated employment, weighed somewhat on the market.
European stock markets closed higher. London's Financial Times-Stock Exchange 100 index added 11.90 points, or 0.26%, to 4,511.20 despite a report that the U.K. budget deficit widened and that December mortgage lending growth accelerated. The pound sterling is up at $1.8323 amid speculation that the Bank of England will hike rates at next meeting.
In Paris, the CAC 40 added 16.19 points, or 0.44%, to 3,676.38 although consumer prices rose for the fifth consecutive month.
Germany's DAX index gained 31.63 points, or 0.77%, to 4,138.04 on bargain hunting and on a report that the German BGA wholesalers and exporters' association forecasts a 2004 sales rise.
Asian markets finished mixed on Wednesday. In Japan, the Nikkei 225 index lost 100.71 points, or 0.91%, to close at 11,002.39 as the yen gained against the dollar in New York trading, causing the stock benchmarks to close lower for the first day in four pushed down by exporters.
In Hong Kong, the Hang Seng index added 180.15 points, or 1.33%, to close at 13,750.58.