Stocks finished higher on Thursday as investors bought stocks that posted strong profits like Exxon Mobil (XOM ) but higher oil prices and weak employment news kept a lid on market gains.
The Dow Jones industrial average ended up 12.17 points, or 0.12%, at 10,129.24. The broader Standard & Poor's 500 index added 5.01 points, or 0.46%, to 1,100.43. The tech-heavy Nasdaq composite gained 22.80 points, or 1.23%, to 1,881.06, as semiconductors and other tech groups rebounded from recent weakness.
Looking ahead, Friday will be another big day on the corporate earnings front. Among the companies scheduled to report are American Electric Power (AEP ), ChevronTexaco (CVX ), and Edison International (EIX ).
Economics news will also be closely watched. A report on second quarter gross domestic product will get top billing with Informa Global Markets expecting growth to have slowed to a 3.5% rate in the quarter from 3.9% in the previous one.
Also of interest to investors will be a gauge of regional manufacturing activity. The Chicago Purchasing Managers' Index in July is expected to show expansion rising to a reading of 59 from 56.4 in the previous month.
On Thursday, the Dow was lifted by Exxon Mobil, the world's No. 1 oil concern, which posted 39% higher quarterly profits thanks to higher energy prices and growing production and its best refining and marketing results in 13 years.
Boosting the Nasdaq was news from fiber-optics company JDS Uniphase (JDSU ) that its quarterly loss was narrower than a year ago.
The blue chips were kept from bigger gains by General Motors (GM ) the world's largest carmaker, which slumped after being downgraded by Lehman Bros. and Goldman Sachs. Lehman said it forecast weak July sales and Goldman said it expects GM may miss earnings targets in 2004 or 2005, or both.
Economics news was also slightly bearish for stocks. New jobless claims rose by 4,000 to 345,000 in the week ended July 24 after an upward revised 341,000 reading the week before. But Informa Global Markets says the data was largely in-line with market expectations.
Meantime, crude oil closed at $42.75 a barrel, off recent highs, on NYMEX after news that Russian authorities were rescinding an order to halt Russian oil giant Yukos' 1.7 million barrel a day output. News of the proposed halt on Wednesday sent the price of crude screaming up to a 21-year high.
Bu the market seemed to shrug off a wire-service report that the FBI had warned of potential terrorist activity in at least two Western states.
In other corporate news, defense contractor Northrop Grumman (NOC ) reported stronger quarterly profits thanks to demand for surveillance and battleship equipment.
Aetna (AET ), the health insurer, posted higher quarterly profits on higher premiums and growing membership.
The No. 1 U.S. chemicals concern, Dow Chemical (DOW ), reported 74% higher quarterly profit as strong sales of farm chemicals and plastics offset higher energy costs.
One-time highflyer Krispy Kreme Doughnuts (KKD ) revealed that the U.S. Securities and Exchange Commission is conducting an "informal, nonpublic inquiry" on the company's franchise reacquisitions and its guidance on a reduction in earnings.
U.S. Treasuries had another choppy session, with prices basically flat, according to Informa Global Markets. The Street is still anxiously awaiting Friday's data, as the GDP report is expected to show strength, so the trade is expected to become more defensive, Informa says.
Elsewhere in economic news Thursday, U.S. employment compensation rose 0.9% in the second quarter, following a 1.1% rise in the first quarter, according to Informa. That took the employment cost index up 3.9% from a year ago, vs. increases of 3.8% in the first quarter and 3.7% a year ago. The trend is not all that troublesome, despite "pretty frisky" benefits costs, Informa says.
European stock markets closed higher on Thursday. London's Financial Times-Stock Exchange 100 index was up 62.50 points, or 1.43%, to 4,148.70 on reports U.K. June consumer credit rose a more-than-expected 2.1 billion pounds, July consumer sentiment rose, and a nationwide survey showed U.K. house prices surged 2.1% in July. ICI was higher after reporting higher second quarter earnings and said product demand is good. Rio Tinto Group was higher after saying first-half net income rose to $1.44 billion from $641 million.
Germany's DAX index added 82.47 points, or 2.17%, to 3,889.68 as oil futures prices declined after yesterday's surge on fears Russian supplies would be disrupted. Adva AG Optical Networking was higher after second quarter sales surged. DaimlerChrysler was up after naming Eckhard Cordes to succeed Juergen Hubbert as chief of the Mercedes Car Group. Hugo Boss was up on strong second-quarter sales.
In Paris, the CAC 40 index advanced 67.87 points, or 1.90%, to 3,643.79 as July service industry confidence rose to a 3-1/2 year high. Renault was higher after raising its full year forecast and saying first half profit rose more than expected. Bigben Interactive rose after saying second quarter sales in line with expectations.
Asian markets finished lower on Thursday. Japan's Nikkei 225 index lost 87.53 points, or 0.78%, to close at 11,116.84. Sentiment was dampened by weaker-than-expected Japanese industrial production data for June. Tech stocks trended lower on the gloomy sector outlook, with Sony down 2.3% while Advantest dropped 0.94%. Plasma TV maker Pioneer fell over 9% after it posted a 49.1% drop in group net profit for the April-June quarter. But Honda Motor rose 3.3% after it announced positive earnings on Wednesday. S&P Asian Equity Research believes there is little to get excited over Honda's first quarter fiscal year 2005 (Mar.) results, even with a 12% increase in net profit, as most of the improvement came from non-operating items (derivative gains).
In Hong Kong, the Hang Seng index gave up 137.17 points, or 1.11%, to close at 12,183.10, falling on concerns over rise in oil prices and a possible interest rate hike.