Stocks edged higher on Thursday as investors toasted a positive report on the outlook for the chipmaking industry as well as a big deal in the retail industry. Trading was light as the stock market will be closed on Friday to mark the funeral of former President Reagan.
The Dow Jones industrial average finished up 42.15 points, or 0.41%, to 10,410.59. The broader Standard & Poor's 500-stock index gained 5.14 points, or 0.45%, to 1,136.47. The tech-heavy Nasdaq composite index added 9.26 points, or 0.47%, to 1,999.87.
With the exchanges to be shuttered on Friday, traders on Thursday were already looking ahead to next week, when investors will see a pickup in earnings releases. Due out on Tuesday are results from database software company Oracle (ORCL ), electronics retailer Circuit City ( CC ), and brokerage house Lehman Brothers. On Wednesday, retailer Best Buy (BBY ), tech firm Jabil (JBL ), and brokerage Bear Stearns (BSC ) are set to report. And on Thursday, results are expected from software outfit Adobe (ADBE ) .
There will also be plenty of economic data to digest next week. Among the highlights, on Monday, a report on retail sales in May is expected to show a rise of 0.8%, vs. a 0.5% decline in April. On Tuesday, a key report on inflation at the consumer level is scheduled, with the consumer price index (CPI) for May expected to show a rise of 0.4%, vs. a 0.2% rise in the prior month. Excluding volatile food and energy components, the index is expected to only rise 0.2% vs. a 0.3% rise in April. Housing starts on Thursday are seen showing a slight heating up in new home construction in May. The number of units is forecast to grow to a 1.98 million annual pace from 1.969 million in April.
On Thursday, sectors on the move included oil stocks, which gained as crude prices rose on news that the Energy Information Agency raised its demand growth forecasts for 2004 by 360,000 barrels a day to 2.1 million barrels -- the largest increase in growth rates in 24 years. Airlines and gaming stocks were lower.
The chip sector, including Intel (INTC ) and Advanced Micro Devices (AMD ), was buoyed after the Semiconductor Industry Association said is sees global 2004 sales rising 29% to $214 billion as demand for chips for computers and other applications surges.
Consumer staples giant Procter & Gamble (PG ) said it is comfortable with average estimates for its current-quarter profits and also confirmed its prior forecast for sales growth.
Air express group FedEx (FDX ) said its quarterly profits would top expectations thanks to heavy demand for its shipping services.
In merger news, Target (TGT ) said it was selling its Marshall Field's unit to May Department Stores (MAY ) for $3.2 billion.
Tax-preparation services company H&R Block (HRB ) posted 16% higher fourth quarter profit thanks to a big increase in the number of its software and online tax-preparation clients.
Meantime, the government said a report on the May producer price index, which tracks inflation at the wholesale level, has been delayed indefinitely because of calculation problems.
But a labor-market report was a bit discouraging. U.S. jobless claims for the week ending June 5 rose by a surprising 12,000 to a 352,000 level in from a revised 340,000 the week before. The number was higher than expected and also lifted the smoothed 4-week moving average to 346,000 from a 341,000 print earlier, says economic research outfit Informa Global Markets.
Treasury prices ended mixed, with shorter-dated issues posting losses while the long end of the yield curve was higher. The yield on the benchmark 10-year note fell 2 basis points to 4.79%. A well-received auction of 10-year notes helped boost prices. The bond market will be closed Friday in observance of a national day of mourning for former President Reagan.
In other economics news Thursday, U.S. import prices in May rose 1.6%, well above expectations and the largest one-month gain since February, 2003. Informa notes that the sizeable gain in May follows continued price pressure in crude energy prices (the report's petroleum component rose 10.3% in May after a 0.4% contraction in April), while other commodities remained firm as the ex-petroleum index rose 0.4% in May from a 0.3% print the prior month. Export prices rose 0.3% in May, in line with expectations as agricultural and food and beverage products continue to pick up.
European stock markets closed mixed on Thursday. London's Financial Times-Stock Exchange 100 index was off 3.40 points, or 0.08%, to 4,486.10. Imperial Tobacco was off after CSFB noted company's German branded cigarette shipment volumes are weak. William Hill was lower after CEO David Harding sold most of his holding in the company. BP was higher after announcing new oil find in Angola. WPP was lower over concern Coca-Cola will switch its advertising expenditure to Interpublic Group.
In Paris, the CAC 40 added 12.09 points, or 0.33%, to 3,711.38. Remy Cointreau and GFI Informatique were lower on poor earnings figures.
Germany's DAX index added 23.88 points, or 0.60%, to 4,021.64. VW was up after news it was to invest 540 million euros in two new engine plants in China. Infineon was lower. Bayer was up after supervisory board gives the go ahead for it to bid for Roche's OTC unit.
Asian stock markets ended higher. Japan's Nikkei 225 index advanced 126.23 points, or 1.10%, to 11,575.97, rising to a six-week high after strong machinery orders data boosted sentiment in late trade. Core private-sector machinery orders rose 11.8% month over month in April on a seasonally-adjusted basis. Japan Airlines surged after Goldman Sachs upped its rating on the stock while casual clothing shops operator Point soared after it said it planned a 1.5-for-1 share split on August 20 for shareholders as of June 30. Promise shares rose on the back of a report saying Sumitomo Mitsui was set to take a 17% to 18% stake in the company.
In Hong Kong, the Hang Seng index gained 82.93 points, or 0.67%, to finish at 12,422.87 after a weak Wall Street session on Wednesday. Newly-listed China milk producer China Mengniu Dairy surged on its first day of trade as investors piled into the company's US$176 million IPO. Yanzhou Coal Mining rose after it said its average price of coal exported to Japan for 2004 surged 71% despite lower export volume.