Stocks Finish Higher
Stocks managed to close higher Wednesday. Blue chips held on to solid gains as the latest data provided further evidence of economic recovery and tech stocks inched onto positive ground despite ongoing worries over valuations.
Measures of the economy have mostly been pointing toward a recovery in recent weeks. The latest data on new home sales indicate continued strength in the housing market. New home sales in February were better than expected, rising 5.3%. Standard & Poor's MMS economists expected new home sales on the month to come in at 820,000, down from 890,000 in January.
Investors will be eyeing the two biggest pieces of data for the week on Thursday -- jobless claims data and University of Michigan consumer sentiment numbers.
Buying action in technology stocks on Wednesday was tepid as concerns remain that first-quarter 2002 corporate profits will not provide the earnings power to drive stocks higher. Looming hikes in interest rates are also on investors' minds.
"I think there's still some skittishness over what we're going to see with first quarter earnings now that the quarter is coming to a close," says Alan Hoffman, senior portolio manager at Value Line Asset Management. "The market is spinning its wheels before the holiday." Markets will be closed Friday for the Good Friday holiday, making Thursday the last trading day of the week.
In corporate news Wednesday, a federal judge overseeing the Microsoft (MSFT ) antitrust case said Tuesday she wants more information about new computer technologies like handheld devices to figure out whether sanctions against the software giant should cover such items.
Coca-Cola (KO ), like Microsoft a Dow industrials component, said worldwide unit case volume will grow in the range of 4% to 5% during the first quarter. UBS Warburg raises its target and reiterates its 'strong buy' rating.
Brokerage firm A.G. Edwards (AGE ) reported a quarterly loss due to a $67 million after-tax charge to pay for technology projects and about 460 job cuts.
In other news, Dutch tech company Philips Electronics NV said it formed a $5 billion alliance to supply components No. 1 PC maker Dell Computer (DELL ).
The Dow Jones industrial average gained 73.55 points, or 0.71%, to 10,426.91. The Nasdaq Composite index was up 2.58 points, or 0.14%, to 1,826.75. The broader Standard & Poor's 500 Index added 6.09 points, or 0.53%, to 1,144.41.
U.S. Treasuries were mostly higher, with the long-bond lower, as traders were unmoved by the better-than-expected new home sales data. Market players received a $25 billion auction of 2-year government bonds in stride, S&P says.
A large offering by Morgan Stanley of $7.3 billion also flooded the bond market. Morgan Stanley aims to get its debt offering off before the Fed pushes interest rates and borrowing costs higher.
European stocks finished mixed, but mostly lower amid a holiday-shortened week. In London, the Financial Times-Stock Exchange 100 index finished up by 19.20 points, or 0.37%, to 5,214.70. In France, the CAC 40 lost 4.87 points, or 0.11%, to 4,623.20. In Germany, the DAX Index slipped 42.59 points, or 0.79%, to 5,348.00.
In Asia, the markets ended higher following Tuesday's encouraging economic data in the U.S. In Japan, the benchmark Nikkei 225 index jumped 115.76 points, or 1.03%, to 11,323.68. The Nikkei broke a four-session losing streak. Hong Kong's Hang Seng index added 200.96 points, or 1.86%, to 10,987.88.