Blue chips retreated from session highs but finished solidly higher Thursday, while tech issues couldn't keep earlier gains to end lower.
Investors focused on upbeat earnings reports from telephone giant WorldCom Inc. (WCOM ) and software maker PeopleSoft Inc. (PSFT ). "That's kind of boosting optimism that other earnings will rebound," Joseph Belew, who manages the Firstar Stellar Relative Value Fund/A, told Standard & Poor's research unit. Shares of WorldCom and PeopleSoft ended higher.
Earnings aside, Wall Street was still basking in the afterglow of Wednesday's report on advances in new home sales, laying to rest for now fears about a recession. March's monthly advances of 4.2% for new home sales and of 4.8% for existing home sales left the "recessionistas" at a loss for words, notes Kerryn Fowlie of Moody's in London. Granted the March results on home sales are unsustainable, but first-quarter 2001's 15% annualized increase by total home sales from the fourth quarter in 2000, and the category's 2.3% yearly increase for the first quarter in 2001 refute the presence of a recession, Fowlie added.
But there was plenty of bad news too. After the closing bell Wednesday, tech bellwether Qualcomm Inc. (QCOM ) reported quarterly earnings that matched Wall Street's expectations. But the wireless tech company warned third-quarter earnings would land short of estimates in a weak global economy. Shares of Qualcomm shed more than 7%.
Other stocks in the news included Kellogg Co. (K ). The cereal maker said first-quarter earnings fell, meeting estimates, as the company prepared to integrate its acquisition of Keebler Foods Co. (KBL ).
The Dow Jones Industrial Average gained 67.15 points, or 0.63%, to 10,692.35. The Nasdaq Composite index slipped 24.84 points, or 1.21%, to 2,034.96. Meanwhile, the broader S&P 500 was higher by 5.78 points, or 0.47%, to 1,234.53.
U.S. Treasuries finished higher. In economic news, the government reported new jobless claims jumped to 408,000 in the week ending Apr. 21 from an upwardly revised 390,000 in the prior week, well above the 390,000 median forecast. The data clearly leaves loosening in the labor market intact, according to Standard & Poor's research unit. Additionally, the first quarter Employment Cost Index rose 1.1%, as expected. On Friday, the focus will be on the gross domestic product, or GDP, report for the first quarter.
European markets ended up. In London, the Financial Times-Stock Exchange 100 index added 40.80 points, or 0.70%, to 5,868.30. In Germany, the DAX Index gained 8.47 points, or 0.14%, to 6,123.66. In France, the CAC 40 was up 73.89 points, or 1.37%, to 5,481.73.
In Asia, the markets finished higher. The Nikkei gained 145.53 points, or 1.05%, to 13,973.03. Bank and brokerage stocks extended gains amid signs the new prime minister will promote reform. In Hong Kong, the Hang Seng added 43.56 points, or 0.33%, to 13,293.11.
By Heesun Wee in New York