Stocks pared gains, but finished higher as an advance in the S&P 500 and Nasdaq to their highest levels in four and a half years inspired profit taking rather than follow-through buying, says Standard & Poor's MarketScope. The strength came as bond yields fell after the latest productivity number was revised up and unit labor costs fell, supporting a positive scenario for growth amid contained inflation, says Standard & Poor's MarketScope. Crude oil rose slightly to $59.94 a barrel, while gold edged up $1.20 to $513.80.
The Dow Jones industrial average rose 21.85 points to 10,856.86. The broader Standard & Poor's 500 index edged up 1.61 points to 1,263.7. The tech-heavy Nasdaq composite index gained 3.12 points to 2,260.76.
In economic news, U.S. third-quarter nonfarm productivity was revised up to a 4.7% rate of growth, from the 4.1% previously reported. Meanwhile, unit labor costs were revised down to -1.0% from -0.5% previously, with big downward revisions in second-quarter data too, reports Action Economics. On a year-over-year basis, productivity is growing at a 3.1% rate, from 3.0% previously. "Good news for bond holders and the Fed, hourly compensation gains remain mild at 3.7% and 5.0% year-over-year, and suggest wage inflation remains in check," says Action Economics.
U.S. factory orders climbed 2.2% in October after a revised 1.4% drop in September (-1.7% previously). The rebound was well presaged by the surge in durable orders up a revised 3.7% (3.4% previously), says Action Economics.
Among stocks on the move, Apple Computer (AAPL) rose after UBS Financial raised its target price to $86 from $74.
Sears Holdings (SHLD) climbed after the retailer posted better-than-expected 35 cents third-quarter earnings per share, vs. $5.45 a year ago, on 11% Sears domestic same-store sales drop and 2.8% drop at K mart. It cited a drop in gain on sale of assets and restructuring charges.
ConAgra Foods (CAG) fell after the company said it sees lower-than-expected 38 cents second-quarter earnings per share from operations. It cited lower-than-expected shipment volume, revenues, higher operating costs, and a less favorable environment resulting.
In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes finished higher.
In Asia, Japan's Nikkei index fell 127.93 points (0.82%) to 15,423.38 on profit taking. The Hang Seng index sank 168.21 points (1.11%) to 14,990.61.
Treasury yields fell amid the friendly set of productivity and unit labor cost revisions for the third quarter. The 10-year note yield retreated to 4.49% after probing the 4.58% zone late Monday.