Stocks Finish Higher on Economic News
Stocks finished mostly higher Monday as investors rallied around positive economic reports on manufacturing and construction.
On Monday, better-than-expected economic reports along with three weeks of stock declines helped spur buying. the Dow Jones industrial average added 56.01 points, or 0.70%, to 8,109.82. The broader Standard & Poor's 500-stock index added 4.62 points, or 0.54%, to 860.32. The tech-laden Nasdaq composite index increased 2.88 points, or 0.22%, to 1,323.79.
Investors will soon have more earnings reports to digest. Forecasts from technology bellwether Cisco Systems (CSCO ) and long-distance telephone company Sprint (FON ) are due Tuesday and Wednesday of this week.
Other big names reporting their latest quarterly results include Avon Products (AVP ), Boston Scientific (BSX ) and drugstore chain CVS (CVS ).
Investors will also be looking to Secretary of State Colin Powell's presentation of evidence to the U.N. Security Council Wednesday. He is expected to unveil evidence that Iraqi dictator Saddam Hussein possesses weapons of mass destruction.
In economic data due Tuesday, December factory orders are expected to increase 0.3%, while shipments fall 0.6%. Economic research group MMS International expects durables to remain unchanged from the disappointing data revealed in the durable goods report, with orders expected to hold an increase of 0.2% and shipments expected to echo the previously reported 1.5% drop.
On Monday, the disintegration of the space shuttle Columbia over the weekend resulted in a sell-off of shares in contractors to the space shuttle program. The largest publicly traded companies involved with NASA -- Alliant Techsystems (ATK ), Boeing Co. (BA ) and Lockheed Martin (LMT ) -- are all under pressure.
Among technology companies reporting quarterly results, Swedish telecoms equipment maker Ericsson (ERICY ) posted a higher-than-expected fourth quarter loss and warned of gloomy sales of its key product, mobile systems. The company said it expected demand would be flat to down 10% this year. Dow member chipmaker Intel (INTC ) gained ground Monday as the World Semiconductor Trade Association reported that chip sales fell 2.3% and in 2002, global chip sales rose just 1.3%. However, the Semiconductor Industry Association said it expects more "improvement across broad product sectors, positioning the industry for 19.8 percent growth in 2003, increasing revenues to $169.3 billion."
Also among Dow gainers, Eastman Kodak (EK ) logged the biggest increases as the stock recovered from sharp selling in recent weeks. The company's fourth quarter fell short of analysts' expectations.
Ford (F ) reported January unit sales rose 4% on the year. The figures suggests that demand continues to hold-up well thanks to aggressive incentives. Chrysler announced weaker than expected January sales, dropping 12% from year-ago levels. General Motors (GM ) said unit sales declined 2%, which was softer than expected. The data suggest that overall unit sales may now fall short of 16.5 million units, says MMS. Treasury Market
U.S. Treasury prices finished mostly lower Monday amid strength in stocks and data supporting an improving economy. The 30-year bond was the only issue in positive territory.
The ISM index slipped slightly in January to 53.9, but still reflects expansion. MMS International had expected little change from the surprisingly strong 55 level in December.
The December update on construction spending showed a gain of 1.2% after increasing a revised 0.9% in the previous month. The rise is better than the 0.5% forecasted and represents the fourth straight increase in spending and leaves this measure rising in eight out of twelve months in 2002, notes MMS.
European stocks finished higher. In London, the FTSE index gained 122 points, or 3.42%, to 3,689.40 after British regulators eased some of the solvency pressures weighing on insurers such as Aviva. Paris' CAC-40 index rose 19.91 points, or 0.68%, to 2,957.79. In Frankfurt, the DAX index added 4.16 points, or 0.15%, to 2,751.99.
In Asia, stocks finished higher. Japan's Nikkei 225 index finished up 160.85 points, or 1.93%, to 8,500.79. Hong Kong's benchmark Hang Seng added 18.16 points, or 0.20%, to 9,258.95.