Stocks Close Near Highs
Better-than-anticipated profit reports from telecommunications equipment maker Ciena Corp. (CIEN ) and fiber-optics network firm Global Crossing Ltd. (GX ) sparked a rally early in the trading session that lasted all day.
Ciena reported better-than-expected results, and said it sees its business growing faster than the overall market. Global Crossing posted a narrower-than-expected loss and a nearly 43% rise in cash revenue. Shares of both stocks were trading higher.
"We're seeing a vicious rotation today," said Annette Geddes, managing director of MD Sass Investors Services, of today's rapid shift into technology issues. "We get in a day what used to take weeks to accomplish."
But traders are worried that investors will sell back today's tech purchases tomorrow, the Friday before the President's Day holiday weekend. While the general consensus on Wall Street seems to be that the market has reached a bottom, no one seems to know when it's going to start moving upward once more.
After the closing bell, Schering Plough (SGP ) issued an earnings warning.
Schering said its Q1 earnings will come in 15%, or 6 cents, below initial estimates, which analysts had pegged at 48 cents a share. The company said the FDA was looking into "deficiencies" in its production processes. Trading was halted after hours.
Hewlett-Packard (HWP ) and Dell (DELL ) reported earnings inline with Wall Street expectations. Hewlett-Packard turned in a performance of 37 cents a share for the quarter, while Dell said it had earned 17 cents a share.
The Dow finished up 95.61 points, or 0.89%, to 10,891.02. Among the Dow leaders were financials and techs, including Hewlett-Packard, Intel Corp. (INTC ) and Microsoft Corp. (MSFT ). Those gains were offset by weakness in Old Economy names, including Exxon Mobil Corp. (XOM ) and drug giant Merck (MRK ).
The Nasdaq climbed 61.51 points, or 2.47%, to 2,552.91. Meanwhile, the S&P 500, a gauge of the broader market, was higher by 10.69 points, or 0.81%, to 1,326.61.
Treasuries closed lower as traders moved back into the equity market. The yield on the benchmark bond finished higher 5.48%. Many are beginning to think that the worst of the economic downturn may be over.
On the economic data front, the Philadelphia Fed index, a measure of regional manufacturing health, rose to -30.5 in February, from -36.8 in January. Meanwhile U.S. import prices in January improved somewhat. Import prices fell 0.4% in January after falling 0.8% in December. Export Prices rose 0.2% in January after falling 0.1% in December.
Initial jobless claims fell 11,000 to 352,000 in the week ended Feb. 10 from 363,000 week before. The 4-week moving average was 345,000 compared with 333,000 the week before. Overall, while recent movements in claims are consistent with moderation in the labor market, the developments do not point to a sharp contraction, according to S&P's economic research unit.
Stocks in the News
Shares of Amazon.com Inc. (AMZN ) are down after Prudential Securities cut the online retailer to a rare rating of sell: Reuters
World Wrestling Federation Entertainment Inc. (WWF ) said its quarterly earnings dropped 25%, in part because of start-up costs associated with XFL, its new professional football league: Reuters
Biotechnology company Human Genome Sciences Inc. (HGSI ) reported a narrower fourth-quarter loss, but said it expects a wider loss for all of 2001 as research and development costs increase: Reuters
European markets were trading higher. The London Financial Times-Stock Exchange 100 index ended up 21.70 points, or 0.35%, to 6,197.90. In Germany, the DAX Index ended up 111.80 points, or 1.73%, to 6,591.67. Meanwhile, France's CAC 40 Index ended higher by 60.30 points, or 1.07%, to 5,704.54.
In Asia, the markets finished on a mixed note. Japan's Nikkei 225 Index closed up 43.33 points, or 0.33%, to 13,327.39. Earlier enthusiasm on calls for premier Mori to resign faded as the market realized he was likely to stay on a while longer. Hong Kong's Hang Seng index, meanwhile, ended down 104.05 points, or 0.66%, to 15,756.37.
California's governor endorsed the state's purchase of the transmission lines of PG&E and Edison in a bid to aid the utilities and resolve the energy crisis: The Wall Street Journal
The former U.S. President Bill Clinton has strongly defended his decision to pardon fugitive businessman Marc Rich, charged with multi-million-dollar tax evasion: BBC News
A civilian who was on the Navy submarine that struck a Japanese fishing vessel said Thursday that he pulled levers to begin the ascent drill but had a crew member right beside him: The New York Times
Japanese automaker Mitsubishi Motors Corp., its image tarnished by a defect cover-up scandal, announced its second massive recall in less than a year on Thursday, affecting an estimated 1.35 million cars: Reuters
By Heesun Wee and Amy Tsao in New York