Broader Market Closes Higher
The broader market bounded higher on Wednesday as Wall Street concluded many stocks had been oversold in recent sessions, but the Nasdaq sagged on some disappointing corporate news.
The Dow Jones industrial average jumped 113.41 points, or 1.14%, to 10,059.63. The Nasdaq Composite, meanwhile, was off 10.70 points, or 0.63%, to 1,677.53. The tech-laden index was off over 45 points earlier in the session. The broader Standard & Poor's 500 index was up 9.54 points, or 0.89%, to 1,086.46.
The earnings parade continues on Thursday. Among some of the companies expected to report results are Calpine (CPN ), a power generator, and EchoStar Communications (DISH ), a cable and pay television services provider.
On the data front, Wall Street will get reports on weekly jobless claims as well as on factory orders and inventories in March. The number of workers filing for first time unemployment benefits for the week ended April 27 is expected to decline to 415,000 from 421,000 in the previous week, according to Standard & Poor's economic research unit MMS.
Meanwhile, U.S. factory orders in March are seen increasing 0.1% vs. a decline of 0.1% in February. Factory inventories are seen declining 0.8% vs. a 0.4% dip in the previous month.
On Wednesday, economic data reports showed the U.S. is not recovering from its slump as quickly as Wall Street had hoped.
A gauge of U.S. manufacturing activity showed the sector still expanded in April -- but not as robustly as economists had forecast. The Institute of Supply Managment's (ISM) manufacturing index registered a reading of 53.9 (economists had forecast a reading of 55) in April, down from 55.6 in March. Any number over 50 indicates an expansion.
Meanwhile, the construction sector, which had held up remarkably well during the downturn, also showed signs of slipping. Construction spending in March fell 0.9% in March, which was less than the 1.4% drop that economists had predicted.
The Dow Jones industrial average was led higher by Coca-Cola (KO ), SBC Communications (SBC ), Procter & Gamble (PG ), and General Motors (GM ). The giant automaker reported robust demand for its products in April.
Pressuring the Nasdaq was news from the likes of Michael Dell, the chief executive of Dell Computer (DELL ), who said the PC maker is not experiencing a rebound in the technology sector.
And computer server maker Sun Microsystems (SUNW ) announced that President and Chief Operating Officer Ed Zander is retiring from full-time duties.
Earnings news in general was mixed. Adobe Systems (ADBE ), the publishing software maker, said it was on target to meet profit forecasts, citing strong initial sales of its updated Photoshop software.
Kroll (KROL ), the corporate security firm, posted nearly five times higher first-quarter profits, citing a restructuring and a jump in demand after the terrorist attacks.
Drugmaker Gilead Sciences (GILD ) reported a narrower than expected first-quarter loss because of growing sales of its newly approved HIV drug.
Meanwhile, cable TV system operator Comcast (CMCSA ) said first-quarter sales rose to $2.67 billion from $2.23 billion but it lost $89 million in the quarter from spending to upgrade systems.
Internet search service company Overture Services (OVER ) said its pact with AOL Time Warner Inc.'s America Online unit ended and that 2003 profit will miss expectations by as much as 40%.
In merger news, a Delaware court cleared the way for Hewlett-Packard's (HWP ) acquistion of Compaq's (CPQ ).
Treasuries moved higher after the weaker manufacturing activity numbers were released. However, a substantial rebound in stocks and firm auto sales triggered profit-taking pressures that pared the advance. The Treasury announced that $22 billion in 5-year notes and $11 billion in reopened 9-3/4-year notes would be auctioned, no bond buybacks would be ordered next quarter, and that it would not shift to a monthly rotation on slaes of 5-year notes.
London's FTSE 100 closed off 40.10 points, or 0.78%, to 5,125.50 even though the CIPS index of manufacturing climbed to 53.4 in April from 50.6 in March, the fastest growth in 2-1/2 years and the third consecutive monthly gain.
Markets were closed in Germany and France in observance of the May Day holiday.
Asian stocks finished higher. Japan's Nikkei 225 Index was up 60.25 points, or 0.52%, to 11,552.79 led by shares of banks and companies with strong earnings prospects. Hong Kong's market was closed in observance of Labour Day.