Stocks End Up, Led by Blue-Chips

Investors focused on a better-than-anticipated report on the service sector, and positive economic comments from Greenspan

Blue-chips closed solidly higher on Wednesday, as investors focused on a better-than-expected report on the service sector and some positive comments from Federal Reserve Chairman Alan Greenspan that the economic recovery is on track.

Technology shares, meanwhile, were lower for most of the regular trading session, but managed to finish with modest gains. The sector was helped by news that Oracle (ORCL ) CEO Larry Ellison reaffirmed the software giant's fourth-quarter earnings per share guidance of $0.12.

The Dow Jones industrial average climbed 108.96 points, or 1.12%, to 9,796.80. The tech-heavy Nasdaq composite index added 17.15 points, or 1.09%, to 1,595.27. The tech-laden index's modest gains were offset by losses in the telecom and computer sectors.

Meanwhile, the broader Standard & Poor's 500 Index was up 9.24 points, or 0.89%, at 1,049.93. The biggest contributors included financials like Morgan Stanley Dean Witter (MWD ) and Merrill Lynch (MER ), system software makers like Microsoft (MSFT ), general merchandise retailers like Wal-Mart (WMT ) and Target (TGT ), and network equipment companies like Cisco Systems (CSCO ).

In economic news, the Institute for Supply Management's non-manufacturing index jumped to 60.1 in May from 55.3 in April. New orders actually dipped in May, however, to 56.8 from 59.0 (reflecting growth at a slower pace), while prices paid fell to 55.5 from 59.5. New export orders surged to 61.5 from 52.5.

On Tuesday during a panel discussion with other central bankers, Greenspan said America's economic prospects were looking brighter, but cautioned that economic growth in the coming months will slow from the January-March pace.

Among the stocks in the news Wednesday, discount retailer Wal-Mart Stores (WMT ) on Wednesday said sales at stores open at least a year -- same-store sales --rose 6.2% in May compared with a year earlier, according to wire reports.

Meanwhile, shares of energy company Williams Cos. (WMB ) dropped after the Federal Energy Regulatory Commission (FERC) threatened to revoke the company's power trading license for failing to properly respond to the commission's probe of Williams' energy trading practices in the western U.S.

Treasury Market

U.S. Treasuries ended lower, as equities showed some strength. The market was also weighed down by the better-than-expected ISM non-manufacturing report.

Looking ahead to the end of the week, reports on May unemployment and wholesale inventories and consumer credit for April were due June 7.

World Markets

European markets closed mixed. In London, the Financial Times-Stock Exchange 100 index closed down 96 points, or 1.89%, to 4,989.10, trading for first time this week after rising 44 points Friday, May 31, off 86 points to 4999 level as May CIPS manufacturing index fell to 52.9 from 53.2. There was little reaction to a report noting UK house prices rose 4.2% in May and are up 18.5% over past year.

In France, the CAC 40 finished higher by 13.63 points, or 0.34%, to 4,079.51, on short covering despite a report that the French PMI fell to 54.9 in May from 55.5 in April.

And in Germany, the DAX Index lost 1.48 points, or 0.03%, to 4,624.31, on some short covering. The markets were restrained a bit by a report that German April PMI fell to 49.1 from 52.0.

Meanwhile in Asia, the markets ended with gains. The Nikkei was up 10.80 points, or 0.09%, to 11,663.87, as hopes for an economic recovery were diminished in the wake of lower-than-expected capital spending for the first quarter. In Hong Kong, the market added 89.83 points, or 0.79%, to 11,402.38.

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