Major stock indexes closed higher Tuesday, ahead of Federal Reserve Chairman Alan Greenspan's testimony Wednesday. The gains of broadcasters helped boost the market, and shares of Circuit City (CC ) also shot up after the consumer electronics retailer said it received a buyout offer.
On Tuesday, the Dow Jones industrial average gained 46.19 points, or 0.43%, to move to 10,837.32. The broader Standard & Poor's 500 index finished up 3.98 points, or 0.33%, to 1,210.12. The Nasdaq composite index added 6.30 points, or 0.3%, to 2,089.21.
Looking ahead to Wednesday, investor attention will be focused on Greenspan's testimony before the Senate Banking Committee at 10 a.m., to be followed Thursday by an appearance in front of the House Committee on Financial Services.
Data on housing starts in January will be released Wednesday morning. Economists are expecting 1.925 million housing starts, down from 2.004 million in December, according to Action Economics.
Also Wednesday, the index of industrial production is expected to show that in January industrial production increased 0.4%, after increasing 0.8% in December.
Among the companies reporting earnings Wednesday are Coca-Cola Co. (KO ) and Hewlett-Packard (HPQ ).
In economic news Tuesday, the National Association of Housing Builders reported its index fell to 68 from 70 in January. Earlier, the Commerce Department announced that retail sales for January fell 0.3%, after a 1.1% increase in December. Economists had been expecting sales to fall 0.4%. Excluding vehicle sales, sales were up 0.6%, compared to a 0.3% gain in December, thanks in part to post-holiday sales and gift-card redemptions, according to Action Economics.
Also on Tuesday morning, the New York Fed's monthly survey of manufacturers came in weaker than expected. The Empire State index dipped to 19.19 in February, down from 20.08 in January, which was lower than the 20.0 reading that economists were expecting.
Crude oil futures settled 0.3% lower, at $47.30 a barrel.
In corporate news, consumer electronics retailer Circuit City said Tuesday that it had received an unsolicited offer from private investment firm Highfields Capital Management to buy the chain for $17 a share. The cash bid, totalling about $325 million, represented a 20% premium to Circuit City's closing Monday share price of $14.26. The company's shares closed up 16.5%.
The broadcasting sector was boosted by the news that Warren Buffet's Berkshire Hathaway (BRK.A ) doubled its stake in Comcast Corp. (CMCSA ) to 10 million shares in the fourth quarter, while Soros Fund Management bought 2.6 million shares of Time Warner (TWX ) in the fourth quarter. Comcast's shares finished up 3.4% and Time Warner's closed up 1.5%.
The Wall Street Journal reported that merger talks between competing department-store chains Federated (FD ) and May (MAY ) were broken off last week over a disagreement about the price Federated would pay for May. Federated's shares gained 1.3% and May's finished up slightly.
In earnings news, Qwest Communications (Q ) Tuesday beat analyst's expectations by posting a smaller net loss in the fourth quarter, thanks to cost-cutting. The Denver-based local and long-distance carrier posted a loss of $139 million, or eight cents a share, while in the same period last year the loss was $407 million, or 23 cents a share.
Reynolds American (RAI ), the second-largest U.S. cigarette maker, reported a fourth-quarter profit, after a loss in the same period last year. In the fourth quarter, the company posted a profit of $76 million, compared to a loss of $176 million last year when it took restructuring charges.
At the end of the Tuesday's session, Treasuries were mostly lower in price as traders looked forward to Greenspan's testimony Wednesday. The closing yield on the 10-year note was 4.10%.
European stock markets closed higher Tuesday. In London, the Financial Times-Stock Exchange 100 gained 17.10 points, or 0.34%, to close at 5,058.90. British Gas was among the gainers, after reporting better than expected fourth-quarter results.
Germany's DAX index was up 15.63 points, or 0.36%, to close at 4,402.03, its highest point since July 2002. The index was pushed higher by Wall Street's rally.
In Paris, the CAC 40 index added 18.34 points, or 0.46%, to close at 4,030.45. Boosting the index were gains from French Telecom and Vivendi.
Asian markets closed mixed Tuesday. Japan's Nikkei-225 index gained 14.29 points, or 0.12%, to close at 11,646.49, after Credit Suisse First Boston raised its industry rating for technology stocks from underweight to neutral.
Hong Kong's Hang Seng lost 21.40 points, or 0.15%, to close at 13,995.83.